Wills & Trusts Outline - Fall 2006 - McCouch

Intro: Death-Time Transfers: Intestate Succession • No will or preparations for what to do with the property. • Rigid system with fixed rules. Probate • The process of proving and deciding the validity of a will. • Each state has its own separate probate statutes governing matters of intestate succession, wills, and administration of decedent’s estates. • Administration of the estate generally falls into three basic stages: o Collecting assets of the estate o Paying expenses, creditors’ claims, taxes, and other charges o Distributing the remaining assets to the decedent’s successors. • Property transferred during decedent’s life does not pass by will and generally is not subject to probate administration. • Has been given a bad name over the years b/c cumbersome, tedious, expensive. Will: • Written set of directions for what is to be done with property at death. • Gives testator control and freedom. • Can designate fits, guardians for children, what’s done with remains, etc. Wills Substitutes: • Avenue for avoiding the probate system. • Differs from a will in three main ways: o (1) Most will substitutes are asset-specific.  E.g.: life insurance proceeds, bank balance, mutual funds shares o (2) Avoids probate  Financial intermediary usually takes place of probate court in affecting the transfer. o (3) The formal requirements of the Wills Act are not complied with.  E.g. Attestation • Will substitutes are not well suited to clearing title and protecting creditors, but changes in business practices of creditors has diminished the importance of those functions. • Four main will substitutes: o Life Insurance  No will necessary b/c the beneficiary is designated in the policy itself.  No need for executory b/c insurance company fulfills administrative role.  Death certificate sent to insurance company – that’s all that’s needed. o Pension Accounts o Joint Accounts o Revocable Trusts  Trusts: an arrangement for holding and managing property.  Three necessary parties: • (1) Settler: person who originally owned property • (2) Trustee: person who holds legal title to the property o Someone trusted. Very important. Usually family, banker, etc. o Subject to fiduciary obligations (loyalty, diligence, avoids conflicts of interest, generally make trust property productive, etc.). • (3) Beneficiary: person who benefits from the property.


Wills & Trusts Outline - Fall 2006 - McCouch

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Nearly perfect will substitutes: the trust instrument specifies what happens with the trustproperty. Instead of going to executor, the trustee has already designated and is capable of turning it over to the beneficiary or hold it over time. Functions like a will b/c settler can retain full control during life. Can do almost anything you can do with a will.

Why does it matter if its probate or not? • Probate has restrictions on methods, ownership rights, etc. that affect an owner’s absolute right to deal with property as she chooses. Basic Theme: If you’re trying to transfer property, there are numerous ways to go about doing that: • The planner should achieve the result: o Reliably o Minimal transactional costs. • Using probate or not, or use them in tandem. The planner should know what the best route is. Sources of Law: • CA Probate Code • Intestacy Provisions • Uniform Probate Code (UPC) o Response to a number of scandals b/c of book called “How to Avoid Probate.” o Main goal was to standardize and reform probate codes. o Streamlined and simplified the probate process. o Has had limited success – about 15 states. • Statutes o There are often no statutory provisions for probate (most laws are creatures of court). • Constitutional Provisions o Rights of ownership – if the state interferes, it will generally have to pay compensation to comport with DPC. Case: Hodel v. Irving: (pg. 22) Tribal lands – property on undivided interests were fractionalized at each generation. After a few generations, the land partitions were unmanageable and uneconomical for the beneficiaries. Congress determined that the owners of de minimis could no longer leave the interests by will or intestacy. The small interests escheats to tribal ownership. • Sup Ct: The escheat provision of the Act unconstitutional as a taking without just compensation. • O’ Conner: “Complex inter vivos transactions like revocable trusts are not an adequate substitute for rights taken.” o Revocable trusts aren’t complex. Why aren’t they adequate? • Intestacy and Will: property will be dispersed to the rightful owners with clear title. • Revocable trust: trustee would transfer the property to the beneficiary. • A competently drafted will substitute does the same thing as probate. It is adequate. o What property rights are being taken without just compensation? • Congress did note say they will lose property at death – only by will or intestacy. • Every other avenue for passing property is intact (JT, trust). o If the ‘taking’ requires compensation, and owner could do an equivalent transfer via another route, the “just compensation” is infinitesimally small. • Bottom Line: her reasoning re: “adequate substitute” and “just compensation” does not add up. The Hodel Decision: • Beneath the surface of this unanimous decision was brewing controversy: o Scalia: property can be fragmented, and if any rights are compromised, that is a taking and the state must provide compensation.


Wills & Trusts Outline - Fall 2006 - McCouch

Brennan: should look at context and see how intrusive the taking is. Weigh it on a case-by-case basis depending on totality. • Where do we go from here? Congress realized the problem and tried to revise the Act: o Kept basic trigger mechanism (small parcel calculations) but allowed owner to leave land to any other person who already owned a parcel in the land. o Advances the purpose of consolidating lands. • Ginsburg says it fares no better than the original statute. o Ideally, would like a formula that leaves land to their kids. o Kids in the normal course will not already own interest in the same land, so they aren’t naturally in the scope of this “less restrictive” measure. • Congress tried again: o Now permits the owner of a small interest to leave property ot another person who already holds interest in same parcel, or to any other dependent or “Indian Person” (member of the tribe). o Opens up the same problem or fractionation. Does nothing to further consolidation but is clearly constitutional. o Testamentary Freedom: Ways to make gifts of property: • Outright Gift: o One owner hands over complete control. No strings, no conditions. • Testamentary Gift: o Same thing, but as long as the testator is living, the beneficiary only has an expectancy. o Gift (or transfer) takes effect at death. • Gifts in Trust: o Person creates it, trustee holds it for beneficiary. o Extremely flexible – it can last for years or be very short. o Common purpose: to impose conditions or standards that will either self-adjust to circumstances, or conditions which are designed to affect the conduct of the beneficiary.  E.g. A gets income from property as long as A remains in school. o When its inter vivos, the settler and beneficiary can agree that times have changed. They can change the terms of the trust or re-write it if they agree. • Testamentary Trusts: o Once the settler is dead, the terms of the testamentary trust are set in stone. o The terms may become less suitable to the needs of the beneficiary. o The problem with DEAD HAND control when a trust becomes irrevocable (especially at death). Testamentary Conditions: • Courts traditionally uphold the conditions and limitations. • It is up to the settler to decide when and how she wants to give it. o Beneficiary can disclaim, waive, or refuse to accept the interest if she doesn’t want to comply. • Children have no enforceable legal right to inherit from parents. o They can cut children off completely if they want to – for any reason or no reason. Three typical areas: • Most of the litigation from testamentary conditions has to do with attempts to control behavior: o Marriage. o Religion: trying to nudge their children embrace or steer clear from different faiths. o Education/Career Choices. Conditions Against Public Policy:


32) Condition on daughter’s inheritance that she didn’t marry a Catholic man or become Catholic before age of 32. • (2) Civil Rights Action: Discrimination o Same as constitutional argument – not implicated in relations between parent/child. then it does NOT violate PP. Overall Goal: Promoting family security and stability. o Some question as to whether this is true after Shelley v.g. Case: US Nat’l Bank v. it is an un-winnable battle. o If the will is framed in terms of prohibiting marriage. but to provide for her support in the event of a divorce. Kramer. She makes three arguments: • (1) Constitutional: Freedom of Religion. Became a live question when she became 32 and trustee has to disperse property (if he makes a distribution mistake. • Destruction of Property: o Provisions that call for the destruction of property are some other “capricious act” are not enforceable. this kind of provision makes sense. whose own interest would be reduced if he gave such consent. the $ goes to X. A only gets $ if she marries someone approved by X. At age 25.  If there is enough of a potential pool of people to marry.McCouch • Total Restraint on Marriage: o A condition calculated to induce a beneficiary to remain single is against policy and is void. it is almost per se unreasonable.Wills & Trusts Outline . Conditions NOT Against Public Policy: • Partial Restraint on Marriage: o A condition in partial restrain which merely narrows the choices is NOT against public policy.Fall 2006 . it is reasonable. Snodgrass: (pg. not to restrain remarriage. o Must look at the motivations behind the testator’s provision. • (3) Public Policy o Basic standard (restatement): restriction must be reasonable.  If it rules out the bulk of the population and makes the opportunity to marry very small. named person is valid. o Court: This is not a state action. which held that the courts enforcing restrictions make them a state action. or to provide for her if the marriage ends. • Commission of Crime or Tort: o A provision is unenforceable if it tends to encourage the commission of a crime or tortious act. • E. • Divorce for good reason: o McCouch alludes that if a child is married to spouse that is abusive. is void. • Remarriage: o A trust provision that terminates the interest of a surviving spouse if she remarries is valid. he is liable to the rightful beneficiary). she married a Catholic. o A condition tied to a beneficiary NOT marrying a particular. 4 . • Encourage Divorce: o A condition whose purpose is to induce a beneficiary to divorce is against public policy. o A gift conditioned on marriage with the approval and consent of another beneficiary. o Free alienability of land is socially important. it is unreasonable. and would be net benefit for child to get out of the relationship. o The purpose of such a provision is to provide support while single. Pretty brightline. If A does not marry someone approved by X. o If engaged (not yet married) at time conditions are imposed. • In the event of Divorce: o If the condition is not to induce beneficiary to divorce. There would be no way to administer private gifts if they must meet the same standards the state has to. If the court constitutionalized the terms of every condition.

• Carves back significantly on testator’s ability to impose conditions. o Even if a will is regular on its face. that is enough to get it admitted without calling live witnesses. o Did the decedent have a will? Is it effective? o The court will set a hearing date where people can contest. o Other courts use it as a means to intrude more. etc.” • Gives the courts a lot more scope to aid the beneficiary’s interests in autonomy. assistants. it is a legal nullity. o CA – 120 days. Original Will is Missing: 5 . etc. o No authentication required. attach it to a petition for probate (proof of death. the less likely it is that the condition will remain reasonable. • Took the approach that PP can override testator’s directions.General Probate System (1) Narrower Meaning: The Probate Process: • A will has legal consequences ONLY after it has been admitted to probate.Fall 2006 . known heirs. if its never offered for probate.Particular aspects of the probate process. o The will must comply with the formalities – witnesses. the phrase that the “witnesses are signing under oath” is in there. • The issue wasn’t litigated until 2000. etc. we don’t know if the condition disappears or whether it goes to alternative beneficiaries. the period to contest is short. so we have civil rights legislation. o The MD Sup Ct decided the condition was invalid. o The hospital was desegregated for 40 yrs and counted on the money.) and submit it to the probate court. • Purpose of probate system is to figure out what to do with those affairs and organize it. if a court strikes down a condition on grounds of public policy. Timing: • Once its offered for probate.Wills & Trusts Outline . Probate Process: Two Meanings: • Narrower . • Generally. Self-Proving Affidavit: • Testator and witnesses sign the will. and notice has been giving to all parties. o Witnesses are often paralegals. R3d doesn’t indicate. • Broader . • Someone must come up with the original will. contestants are barred. May be hard to track down. signatures. Home for Incurables: racial restrictions on a bequest.McCouch Restatement of Trusts: • Concern with dead hand control: The longer the time and more intrusive the condition. • The affidavit recites all the elements of due execution and serves as a substitute for live testimony. but allowed the Home to take the bequest despite the testator’s alternative bequest. • If the contest is not brought promptly. • The R3d test defines reasonableness flexibly: o “A restraint contravenes public policy if unnecessarily punitive or unreasonably intrudes on personal decisions or interests of the beneficiaries. o Some courts say they are using the R3d but it seems like they are using old standards. • Notice to beneficiaries and those left out. o In CA. and then they sign a sworn affidavit.

o Asset Collection  Assemble all assets and appraise their value. o Even a picture of the will is not the same as the original. o Administrator: appointed by the court o Personal Executor: named in will. creditors have at most ONE YEAR from date of death to file claims against estate. known creditor.Wills & Trusts Outline . o Would have to go through and prove the terms adequately to give them effect.  Time-consuming and burdensome. torts. o Car accidents. o Dealing with Creditors:  Legal obligation to send notice to each reasonably ascertainable.  Monitor decedent’s mail. dentist. Why have a will? • If uncertain about intestacy laws. or know you want your property to go another way.Fall 2006 . o If the determination is no will – then must go through intestacy. • A well-advised testator will only make one original document (no duplicates).g. malpractice if doctor. • Clears up uncertainties. OR • Do nothing and creditors are subject to self-executing one-year from the date of the death. (2) Broader – General Probate System: • Must determine if there is a will or not.McCouch • Presumption: if the original will can’t be found.g. competent performance of the administrator.  Identify other creditors that might be more elusive: • Outstanding litigation o E.  Two Options: • File notice via administrator and give them 60 days. it was with the intent to revoke.  Collects into a list and puts into inventory filed with probate system. • Breaks dead-locks of guardianship • Designates an executor/can have independent administrator • Gives directions on administration Why go through probate? • All surviving members pay off creditors and want to handle it yourselves? 6 . • If estate has no administration. o Must prove that it was never intentionally revoked.  Creditors have limited time to file a claim. beneficiaries. 60 days to file claim. lawyer. • E. • No person has any legal authority to deal with someone’s assets unless appointed as a PR. • The will must be an original document and in writing. • What does the PR do? o Send out notice of his appointment:  Interested persons.  Mortgage lenders have live-enforceable liability against the property. creditors o Fiduciary bond:  A guarantee of the honest. Personal Representative: • Often there is a need to administer an estate.

Bears too heavily on small estates. Small ways around probate: • Small estates: $100. DMV for car registration.Wills & Trusts Outline .McCouch • • • • Can’t prove good title when its still in decedent’s name. Disagreements about terms of wills.000 or less. Surviving children or spouse – probate helps claim allowances promptly.Fall 2006 . o You then assume full responsibility for paying off creditors for that property. • No probate opened. • Rationale: administering a decedent’s estate almost always includes lawyer and PR fees. etc. that is enough to let the person in charge of property off the hook. bank where savings are. o CANNOT apply it to real property owned solely by decedent • For larger estates. If you want to bar creditors. o Under a statutory procedure.g. opening probate bars them promptly. 7 . and 40 days since death. collection by affidavit will not always work. Can submit one-page affidavit saying owner is dead and you’re sole heir.  E.

and o (2) during the marriage by gift. o In most cases spouse takes ½. the intestate share of the surviving spouse is the one-half of the community property that belongs to the decedent under §100. CA Probate §6401(c): As to separate property. sister. brother. will. Property owned by husband and wife. either because o The will was successfully contested. preferences. CA is a community property state: • The salary of either spouse (and acquisitions therefrom) are CP. o They get priority. o The estate of the decedent and the spouse become TIC of each piece of property. o The decedent’s ½ goes to his wife by intestacy – she owns BOTH halves. o (B) Where the decedent leaves one child and the issue of one or more deceased children. owned ½ by each spouse.Wills & Trusts Outline . other ½ belongs outright to his wife. the intestate share of surviving spouse or domestic partner is as follows: • (1) The entire intestate estate if the decedent did no leave any surviving issue. or o The will was not properly executed • (3) the decedent’s will did not make a COMPLETE DISPOSITION of the estate.§6401: • In almost every state. spouse gets 1/3. CA Probate §6401(a): As to community property. parent. Intestate Succession Rules apply when: • (1) the decedent left NO WILL • (2) the decedent’s will is DENIED PROBATE. • All community property ends up with surviving spouse via intestacy. • When one spouse dies while the marriage was intact. o (B) Where the decedent leaves NO issue but leaves a parent or parents or their issue or the issue of either of them. fixed rules based almost entirely on statute • Don’t take into account desires. o If he dies with a will – he can leave it to whoever he wants.McCouch Intestacy: Intestacy Laws: • Rigid. Who owns the property? o ½ belongs to decedent’s estate. or issue of a deceased brother or sister.g. o (C) Where the decedent leaves issue of two or more deceased children. o Where the decedent leaves more than one child. • Separate property consists of property owned: o (1) by either spouse before marriage. or inheritance. • (4) may be involved in questions involving a pretermitted spouse or child. • (2) ½ of the intestate in the following cases: o (A) Where the decedent leaves only one child or the issue of one deceased child. • (3) 1/3 of the intestate estate in the following cases: o (A) Where the decedent leaves more than one child. resulting in partial intestacy. • E.Fall 2006 . the community is terminated and each item is split by operation of law 50/50. and whatever is left is devised among other blood relatives. • No close family members = spouse takes everything • Where there is some other survivor = spouse will have to share. Husband dies. WORKSHEET: 8 . the first share goes to the surviving spouse. (1) Intestate Share of Surviving Spouse .

she is free to leave decedent’s property outside of his family. • Says nothing about property that passes outside of probate (JT’s. 9 . pension. • One parent. but descendant of grandparents takes first. two siblings: o Spouse takes ½. o Both 5 degree relatives. • Have same rights and responsibilities of spouses. Intestate share of D’s separate property of the spouse and other relatives. or opposite sex if at least one of them has reached 65.) • Spouse only gets all intestate property if no other near relations. child takes ½. all relatives in equal degree share the remaining 1/2. etc. • Opposite sex cannot register as domestic partners (unless over 65) – just same sex. siblings split other ½. The CA statutes don’t take into account other relevant factors: • Doesn’t make spouses share depending on length of marriage. never married. o Either they must be same sex. the prior spouse might lose benefits. • Probate code generally includes surviving domestic partnerships. • A maternal great-aunt and paternal first-cousin o Both 4 degrees. they take equally (rather than nephews splitting their ½). o They are from another deceased child. o All same degree of kinship. This is an attempt to preserve benefits and still allow someone to enter a domestic partnership. • If spouse re-marries. CP treatment). and two grandchildren (children of deceased son): o Spouse takes 1/3 – daughter takes 1/3 and grandchildren split final 1/3. He gets all. • A great-grand-aunt and first cousin once removed (grandchild of D’s great grandparents).g. All survive 12.McCouch 1. • One parent. – a domestic partnership is NOT recognized as a marriage.) D. §6401-§6402. o Narrow group of opposite sex so that lawmakers can say “this isn’t just same-sex. insurance.Fall 2006 . dies intestate survived by relatives. o Cousin is descendant of great grandparents. one child: o Spouse takes ½. • One parent. o Cousin takes all. §6402(f). one daughter. • For federal purposes – tax. o For SS. • One niece (the child of deceased sister) and two nephews (children of deceased brother): o Spouse gets ½. • Marriages terminate by divorce or by death. but it is technically different status. survived by a spouse and by various relatives. Valid Marriage: • License and ceremony. 2.” Elderly become potential supporters. no matter what state law says. Proper distribution under §6402: • D’s mother and D’s paternal grandfather o 100% to mother • One maternal aunt and two paternal uncles o 1/3 to each. etc. if claiming retirement and then re-marries. social security.hours. CA – Domestic Partner • CA gives rights that are substantially equivalent to spousal rights (e. • A great-grand-aunt and second cousin o Great-grand-aunt takes all. • Treated the same.) D dies intestate.Wills & Trusts Outline . parent takes 1/2 • Two siblings o Spouse takes ½.

then they have given thought to an individualized plan. • If two people die at the same time. o Protects the innocent party that got married in good faith. o Presume that he survived as to his property. or the entire intestate estate if there is no surviving spouse or DP is as follows: 10 . Neither left a will. and survival by an instant for other forms? • §220 – survival by an instant: If they’ve gone to the trouble of drafting a will. Rationale: §220 and §6403: • Why does it make sense for the 120 hrs for intestacy. o They may consider drafting around the statute. • If no clear or convincing – property of husband and wife are distributed as if they survived each other. o It would go through a second probate estate and to other successors. But not in CA. • For the purposes of intestacy §220. you’re assumed dead. • Putative Spouse: one party to a purported marriage believes in GOOD FAITH that the marriage was valid. o Wouldn’t protect husband if he knew that his first marriage was still intact. o §220 also applies to every other form of succession. we might recognize. • Rationale: an “instant” is not enough to justify taking his entire estate and letting her successors have it. (2) Intestate Share of Heirs Other Than Surviving Spouse . the property of each person shall be administered/distributed as if that person had survived the other. Common Law Marriages (CA): Doesn’t exist. • §6403 – 120 hours: would give a person with impending death an opportunity to change the disposition of the property. CA Probate Code §6403: A person who fails to survive the decedent by 120 hours is deemed to have predeceased the decedent for the purposes of intestacy. And visa versa. If contracted validly somewhere else. then she is entitled to the rights of a putative spouse. [Rule does not apply if the rule would result in escheat. C’s estate is distributed to her surviving heirs as though S predeceased her. • All that §220 says if you can’t show you’ve survived by an instant. any subsequent marriage is void.§6402: The part of the intestate estate not passing to the surviving spouse or domestic partner via §6401. • Requiring clear and convincing cuts down on the amount of litigation.Fall 2006 . o It would go to whatever his will says or whoever is next in line. o They both died. o Not quite as good as fully legal spouse. o “I leave to my souse if she survives me. it doesn’t make sense to require multiple probate proceedings. it is deemed that the person failed to survive the required period.” Does that override the statutory default rule? Risk getting into litigation about the potential conflict. o NOT an attempt to grab more property for CA. and she survived as to hers. o The 120 hours does NOT apply if it would result in escheat. o Example: C and S are both killed in a car accident. Reconciling §220 and §6403: • When do we apply 120 hrs and when do we use survival by an instant? o §6403 is just INTESTATE succession. but she will be able to share the CP with legal spouse. Uniform Simultaneous Death Act §220: If the title to property or the devolution of property depends upon priority of death and it CANNOT be established by CLEAR and CONVINCING evidence that one of the persons survived the other.Wills & Trusts Outline .McCouch • If first marriage is validly intact. Not diametrically opposed. why give his entire estate to her heirs if she dies within 5 days afterward.§6402: CA Probate Code . If it cannot be established by CLEAR and CONVINCING evidence that a person who would otherwise be an heir has survived by 120 hours.] • A person must survive the decedent by 120 hours in order to take as an heir or beneficiary. its just another hoop.

Wills & Trusts Outline . or issue of a parent. B. If no surviving issue or parent. B. nieces/nephews. • Each living person takes an equal share – shares combined and then divided equally among the next generation. See Worksheet!! Table of Consanguinity: Pg.  Avoiding the “laughing heirs. issue of a parent. Per Stirpes: • Still widely used – and can be invoked by will. to the decedent’s parents. • Next of kin (or kin of predeceased spouse)… In every state. • The division of shares is always made at the child level. 53: • Collateral relatives are blood-relatives who are neither direct-descendants nor ancestors. If no surviving issue. those claimed through nearest ancestor is preferred. o Person closest in degree takes. If no issue. grandparent. or issue of a grandparent. the system abruptly shifts and abandons parentellic. it goes to “next of kin. parent. If no surviving issue.Fall 2006 . cousins. to the grandparents or the issue of those grandparents. then go down. regardless of whether there are any living takers at that level.  Take A. there is NO DIFFERENCE between per capita with representation and a classic per stirpes distribution. parent. o Ex: Three pre-deceased children of decedent that all have kids:  Divide the estate into 3 shares (for each dead child).” • CA doesn’t distinguish between paternal and maternal sides (different from UPC). then ignore that whole layer. • Persons in the same degree of kinship to the decedent always take equal shares. o Most states follow – move up generation on table. • Skips generations with no surviving takers. o Unusual – most states are concerned only with blood relatives. grandparents and their descendants.  UPC – after first 3 lines of blood. etc. • The property is divided into equal shares at the first generational level at which there are living takers. then to the issue of a predeceased spouse. o Descendants of grandparents take first from other less-related blood relatives. • CA §6402(e): If no one in first 3 lines of blood relatives. • §240: divided into as many equal shares as there are living members of the nearest generation of issue. o “When there are 2 or more in equal degree. 11 . to the issue of the parents or either of them. the estate escheats. UPC and CA: Per Capita with Representation: • Descendants take per capita at each generation. • Parentellic System: parents and parents’ descendants. then the issue of predeceased spouse takes. C are all dead. o If A. o After 3 lines of blood relatives. Note: If there is at least one living taker at the first generational level. o Decedent’s step-children. o Siblings. taking equally if they are all of the same degree of kinship.McCouch • • • • • To the issue of the decedent. the issue almost never have to share with anyone except surviving spouse.” • CA §6402(f): If there aren’t step-children or near relatives.” o The number on the corner of box on table – represents degree of relationship. and C’s shares and re-divide among next generation.

adoption). Original UPC: • Similar results to the facts of Donnelly. the intestate succession matters for procedural reasons. • If Faith died. the child is NO LONGER entitled to inherit from its natural parent. Extensions of the court’s reasoning: • If Kathleen was already dead and only identifiable relative is JL – under the court’s reading. marries Faith and they have child.Fall 2006 . the court has to sift through thousands of potential heirs to determine who is most closely related. 75): Grandparents John and Lilly. • (2) Two-way Street o Inheritance is not always reciprocal. JL still would have been barred from inheriting. and then each subsequent descendant from the common ancestor to the claimant. Case: In Re Estates of Donnelly: (pg. dies and Faith re-marries Richard. • All collateral relatives have at least one ancestor in common and are either whole or half to you. • The adopted child and her issue can inherit from the adopting parents and from the adopting parents’ kin. Jean Louise. Jr. Jr. 67): Over 1. blanket rule that WA court announced (still good law). JL would have taken through intestacy by representation of her deceased father. Becomes child of the adopted parents and their relatives for the purposes of the law.g. and his parents) would be severed. • It is absurd.’s death. Amended UPC 12 . Adopted Children: An adopted child has the same inheritance rights as a natural child. What affect does adoption have for JL? Can an adopted child inherit by intestate succession from natural grandparents? • Once a child has been adopted.Wills & Trusts Outline . • Court: JL’s rights of inheritance have been completely cut-off. In order to determine who has standing. The fight is over who has “standing” to contest the will. • (1) Is the child-parent relationship intact? o Most common scenario is adoption o If a child is adopted out of the original family. o The relationship with the subsisting natural parent (Faith) would remain intact.McCouch Case: In Re Wendell’s Will: (pg. but a real problem with the bright-line. • If adoption was done by a step-parent. it might include severance from natural mother. o There are times a parent is barred from inheriting from or thru the child. two siblings that share only one parent. Jr. the general rule is that child is no longer treated as a child of its natural parents. count each person in the chain of ascent to the common ancestor. Illustrates the problem of deciphering relatives. • Whole-blood: all lineal descendants and ancestors.g. • Even if there is a will. is JL entitled to inherit from her mom? If the statutes are taken literally. Richard adopts JL so she is now his legal daughter. • To compute degree of relationship. Have children Kathleen and John Jr. At Sr. the relationship with the non-custodial relationship (Jr. o Half-blood: E. Children and Intestacy: Difficulties arise when the parent is hard to prove or there are law-proceedings (e. Treatment of Whole/Half-blood Relatives: • General Rule (CA): Half-Blood are treated the SAME as Whole-Blood relatives.600 claimants appeared.

Fall 2006 . EXCEPT for a wholeblood brother or sister of the adopted person or the issue of that brother or sister. • Distinction of the natural parent of the spouse adopting and the other natural parent. An implicit part of the bargain (getting rid of his existing support bargains) he also gives up his right to inherit.Wills & Trusts Outline . Then Chloe dies. whom they give up at birth to another couple for adoption. we don’t even get to (a)(2). Half-bloods would not be treated the same way. • But the would not allow Jr. nor did father die after she conceived but before she was born. • Jr. survived by Fred and Chloe. by step-parent). then presumably both parents have to consent to adoption (e. 13 . and his relatives would be barred from inheriting from JL. • Does Chloe inherit from Martha? o §6451(a): is there a parent-child relationship? Is Chloe still the child of mother/father?  No – because there was no family relationship (neither parent lived with child as parent-child). OR o The natural parent was married to or cohabiting with the other natural parent at the time the person was conceived and died before the person’s birth. • She counts as legal child of adopted father. • The one place where whole-bloods and half-bloods aren’t identical: o E. if JL had another sibling from F and J’s marriage to each other. CA Probate Code: §6451(a): An adoption severs the relationship of parent and child between an adopted person and a natural parent of the adopted person UNLESS BOTH of the following requirements are satisfied: • (1) The natural parent and the adopted person lived together at any time as parent and child. • Note: statute says nothing about divorce. • If satisfied. Unless the adopting is by the spouse or surviving spouse of that parent.g. the adopted child maintains a legal relationship with BOTH natural parents and relatives. the parent ought to expect to forfeit the right to inheritance. inherits from or through the adopted person…. stranger.g. CA Probate Code §6451(b): Neither the natural parent nor a relative of a natural parent… inherits from or through the adopted person… UNLESS the adoption is by the spouse or surviving spouse of that parent. or his parents to inherit from adopted child (ONE-WAY street). o If we don’t meet (a)(1). • Does Fred inherit from Chloe? o No. AND • (2) The adoption was by the spouse of either of the natural parents OR o After the death of either of the natural parents. o If we have a child up for adoption. That whole-blood sibling was not adopted. survived by Fred. • Whole-bloods do get preferential treatment here. but Faith and her relatives would not be. her relationship was severed. o OR married/co-habiting at time conceived and DIED before child’s birth. Worksheet: Martha and Fred are natural parents of Chloe. and other natural parent. • ONE-WAY street. and is still able to inherit from JL. • Don’t want to deprive child when it wasn’t their choice/fault.  By step-parent. natural mother. • If it ended up in divorce instead. o OR adopted after death of either natural parent.McCouch • Permits JL to have inheritance rights from all three parents. AND • Adopted by step-parent. or relative – as long as after one parents’ death. CA Probate Code 6451(b): Neither a natural parent nor a relative of a natural parent. Martha dies intestate. Requirements: • Parent either lived with child and had parent-child relationship. When it comes to ONE-WAY streets – does that make sense? Is there some reasoning? • Child has no say in what the parents do – they are a passive participant.

they can’t inherit from her. Later C dies intestate. Although C can inherit from them. 14 . • Do A and B inherit from C? o Neither can inherit – 6451(b):  Both natural parents and their relatives are barred from inheriting through the child. They lived together as a family until F’s death. Duke left $ in trust for D.  Not F’s spouse who did the adoption. then her parents can’t either.Fall 2006 .  Some states preserve the rights of the blood relatives involved. • Does C inherit from Martha? o 6451(a)(2): requires the adoption be after the death of EITHER natural parent. • Does C inherit from F? o 6451(a): They lived together as a family. nor F or her relatives. D never had biological issue. o She has 4 potential lines of inheritance (her natural and adoptive parents). so his relatives cannot inherit from C. that meant that for inheritance. as long as after one natural parent died. Anything other than step-parent adoption after death is the same as if it were an out-of-family adoption. She can inherit indirectly eventually through her parents. M is still their child. Legally.  F died. They will inherit as her parents. K was D’s daughter and entitled to inherit an intestate estate. M then gave up C to another couple for adoption. • M’s rights from C? o If she can’t inherit. but did adopt a friend Kendra in her 30’s. lived together until M and F divorced. M and F are naturals. o But it does sever C’s relationship with and thru M. o M and C will then be whole-blooded siblings -. C went to live with M’s parents. a relationship with both natural parents might be intact – but legal adoption under the statute severs the relationship with them. o She can’t inherit from F. who adopted C.Wills & Trusts Outline . and then M gave her up. M dies intestate. not step-parent. then they are wholeblood sibs. they are her new parents. • Does B inherit from C? o 6451(b): Relatives don’t inherit through the adopted person on the basis of a parent-child relationship. survived by F’s brother B. then they had a falling out. and adopted by family. o Even though parents were alive when she was adopted. she can inherit from EITHER natural parent. M then remarried her new husband H. Later. survived by C. C dies intestate.g. F dies intestate. Lived together as a family until M and F were divorced.If they both have the same parents. survived by C.  CA doesn’t have this special rule. unless the adoption is by the surviving spouse of that parent. o If they die. She can disinherit via will. o She can inherit through F and M.  Functionally.McCouch • She can’t inherit from them. o If she was adopted by her maternal grandparents.  They draw a distinction between the relatives of the natural parent.  Doesn’t matter who did the adoption. are entitled to inherit. F dies intestate. survived by her aunt A (M’s sister) and her uncle B (F’s brother). Mr. Later C dies intestate survived by M and M’s parents. o E.  Neither M or her relatives. M and F are natural parents of C. • Does C inherit from F? o 6451(a): both parents were still alive (not at death). M and F are natural parents of C. After the death of C’s adoptive parents. CA Probate Code §6451: Defines who are parents: • CA statute says nothing about the difference of adopting adults or minors. who legally adopted her. survived by C.

• If there is an agreement (written. Child gets benefit but foster parent does NOT. • The child is raised by someone else (like a foster parent situation). o Equitable Adoption: Agreement either express or implied where natural parent gives up child to someone else. rather than to his collaterals. and create a synthetic p-c relationship. there is NO RESTRICTION at all. Mr. treat the adoption as if it had actually taken place. • Even if foster parent does all the right things in caring for child. • If the child is the only known heir of the FP estate. express) that the new parent is taking over all of the responsibilities taking in the child and will: o (1) Treat the child as her own. but one NP refuses. there are statutes that deal specifically with this. and collateral relatives are counting on the inheritance. Equitable Adoption: CA • CA Sup Ct held that you need DIRECT expression of intent to adopt. • Pretty harsh rule. The child will inherit.  Cannot be used to manipulate inheritance. • ONE WAY STREET o The adoptive parent should have adopted but didn’t – essentially breached. but there was no direct expression to adopt. o He could create an instant heir that would pre-empt all those other distant relatives when contesting a will. o Look for enforceable contractual agreement or expression of intent (not necessarily in writing). o In CA. o They failed to adopt. Not married. • The courts will. unless one of the natural parents is dead. o “Informal” situations are not enough to give rise to equitable adoption. o Intestacy. in equity. o People use this device (marry or adopt beneficiary) in order to keep relatives from inheriting or contest the will. o Normally. and then dies without adopting. implied. under her father’s will. could K inherit from the trust estate that D’s father left her? o Her dad. The “child” becomes the beneficiary. Problem: If the child is given to foster parent. • Gives child right to inherit if meets BOTH requirements: o (1) parent-child relationship must have begun during child’s MINORITY and continued throughout joint LIFETIME of parent-child. both would have to consent. does she inherit? 15 . oral. once the parent-child relationship was made. as in many states. then statute allows child to inherit. but ONLY if adopted in minority (not as an adult).Fall 2006 . • Even if adoption never becomes complete. child is treated as if adoption happened and entitled to inherit.McCouch The question was. o (2) Foster/step would have adopted but for a LEGAL barrier. o CA – if you have an adoptive child.: express understanding that they will raise as own. and FP agrees to adopt. CA Probate Code: §6454: Equitable Adoption • Foster parents and step-parents. adult adoptions are allowed. and o (2) Will go through an adoption procedure. o CONSENT from either natural parent is the classic legal obstacle.g. Property owner has an intimate friend who he wants to leave everything to. • If the adoption would have occurred but for the legal barrier.Wills & Trusts Outline . • Useful in a number of situations: o Sizeable estate. the child has no intestate rights against the estate. • The second requirement makes the statute difficult to meet. Duke – did he mean to include her adoptive issue? • These days in CA and UPC. • E. • Not just shown up and they decided to take in and not thought about it. they are treated as a child for a W&T instrument.

the child will be allowed to inherit. • All focus on father’s conduct or involvement during his lifetime. etc. mom and dad live together and both believe that they are parents.  Child can only inherit. when he would have had an opportunity to contest or acknowledge paternity. DNA. o NO inheritance under statute – equitable adoption still available. Modern Law: • Tremendous diversity in state’s treatments. • Determining Parentage: o (1) Married  Generally presumed to be child of husband. CA have interpreted restrictively: o Legal barrier should last as long as both parent and child are alive. o Sup Ct said sufficiently related to state interest to withstand strict scrutiny. • Became a Constitutional question: Sup Ct. Gordon: o A statute that allows NO means of proving fatherhood for inheritance purposes denies equal protection. Lalli: If child declared by judicial order during father’s lifetime to be his father. Children Born Out of Wedlock: Common Law: • A non-marital child deemed a child of no one. • Much more lenient than required by Const. o Requires someone to go into court and get formal court order declaring paternity. • No restriction of kinds or timing of proof offered. Still restrictive. o Problem: When there isn’t a factual dispute between the parents. o Dissent: this is almost as bad as the old CL rule. • Only the child’s spouse and issue could inherit from the child. the order would be sufficient to prove paternity and the child eligible to inherit from father (5-4 decision). 16 .  Even after the father is dead and not in position to contest paternity. CA Probate Code §6453: For the purposes of determining whether a person is a “natural parent:” • A natural parent and child relationship is established where that relationship is PRESUMED and NOT REBUTTED. UPC is fairly representative of many statutes. o The legal barrier goes away once child reaches majority – could she inherit then? Statute says nothing about how long legal barrier lasts. UPC 2-109: Recognizes child’s relationship to either natural parent regardless of marital status. • Proof: mother’s conduct. that statute no longer applies. if parents not married. o State could NOT require that parents be married to each other as a condition for allowing a child to inherit.Wills & Trusts Outline . o (2) Adjudication before father’s death o (3) Parentage established after death by clear and convincing proof. No inheritance rights from either parents or ancestors. o If the child reaches majority.Fall 2006 . o Heading in direction of strict scrutiny – not substantially related to an important state purpose. family evidence. in Trimble v. Most states began to amend statutes • Lalli v. why would one go to the court?  E.g. • Most states have moved beyond this. The FP/AC statute doesn’t apply once no legal barrier.McCouch • • • • o Adoption never took place because there was a legal barrier. if someone can show with c&c proof that the decedent was child’s father. Just that parent/child relationship must commence during minority and continue through joint lifetime. if there is court order declaring dad.

 Vague standard. and father has extrinsic actions that would raise presumptions of paternity. three ways of proving paternity: o (1) Court order entered during father’s lifetime declaring paternity. o (2) Clear and convincing evidence that father has openly held out the child as his own. neglect – unless there’s a particular statute indicating otherwise.g. o (2) Father takes child home and openly holds child out as his own. o (3) Impossible for father to hold out child as own. o (2) The parent or a relative of the parent contributed to the support or the care of the child. then paternity is presumed. court order for child support.  Allows all kinds of evidence as to the father’s conduct during life. or father never had interest in child. then the child’s birth relates back to the time of conception. • If a child is born out of wedlock. neither a natural parent nor a relative of that parent inherits from or through the child on the basis of the parent and child relationship between that parent and the child UNLESS BOTH of the following requirements are satisfied. Not defined. the parent can inherit.g. o Reason: causal link.g. Most bad conduct has no effect on inheritance rights: • E. o Neither route presents too many difficulties. o Under the UPC. but subsequently get married. • Statute prevents a dead-beat dad from inheriting from child.Wills & Trusts Outline . and was conceived during decedent’s lifetime. I should inherit. There is such a close link between the bad deed and the inheritance.    Problem: seems to create a blanket restriction for the child to come in after death and say “this was my dad. CA – that presumption is hard to rebut (maybe impossible).  E.g. child never known to father. Unborn Relatives of Decedent: Common Law: • As long as child ultimately born alive. CA Probate Code §6452: Inheritance from or through child born out of wedlock.  E. Even if not married when child born. abuse. the mother’s child is presumed to be child of husband.” Even by clear and convincing evidence. but paternity established by c&c evidence. ANY parent that fails to support child is barred. he died before the child was born. but not CA Probate. • E. • If NO presumed father. can’t inherit? • ONE WAY street situation. o (1) The parent or a relative of the parent acknowledged the child. • CL court’s used to qualify by saying: “IF its in the child’s best interest to do so.” CA Probate Code §6407: Relatives of the decedent conceived before the decedent’s death but born thereafter inherit as if they had been born in the lifetime of the decedent. incompetent. was in coma. Behavior is a facts and circumstances test. the court felt no reluctance in stepping in. If they are met. o Is that constitutional? Simply b/c not married to child’s mother. and prevents his relatives from inheriting. Problem: How would the court rule if child was born alive and died 60 hours later? 17 .McCouch • Presumption of paternity: o (1) Parents married If married at the time conceived or born.Fall 2006 . o CA rule – only the unmarried parent is barred. • EXCEPTION: killing the source of the inheritance. • UPC would allow it.

• Mass. Court: If this child would be allowed to inherit under Mass laws. the person who was designated to have control has to give notice that the material is out there and they are at least thinking of using it. • The burden of establishing that a lifetime gift was NOT an advancement is on the party so contending. etc. intestacy is still important because of survivor benefits. o §6407 requires conception before death and doesn’t cover this issue. Not going to tack on the 120 rule on top of the conception rule. etc o UNLESS person with genetic material waives rights to use it. Period is presumed to be reasonable to make decision and conceive. Bars to Inheritance: Advancements: Common Law: • “Bringing gifts into hotchpot” – where the parent makes a gift of property to a child. • Most likely outcome: the 120 rule is to cut off the determination of survivors. trustee distributing assets. o Resulted in a lot of litigation for things that could not be conclusively proven (arguments about valuation. • The rule was based on the assumption that a parent would want to treat all his children equally. then the person will also be treated as surviving child for social security benefits. etc.Fall 2006 .Wills & Trusts Outline . subjective intent. CA Probate Code: §249. she is deemed to have predeceased the decedent for intestate succession. o Any lifetime gift to a child was PRESUMED to be an advancement of the child’s intestate share. • Statute puts a 2 yr moratorium on any beneficiaries: o No one is entitled to get distribution until it is known if child will come into existence. o Important to always ask if there is any possibility that more children will come into existence. • (2) Written direction must designate someone to control the material o Within 4 months after death. insurance company paying proceeds. o The gifts get off-set against the child’s share (but they get to keep it). and parent dies intestate. PROVIDED: • He actually consented to their conception (oral. but doesn’t require. o Prohibits bank holding assets. but can’t take away from any lifetime gifts (see handout). a child of the decedent conceived and born after the death of the decedent shall be deemed to have been born in the lifetime of decedent. if the child proves by clear and convincing evidence ALL of the following: • (1) Written direction of the decedent o Permission to use the sperm to conceive after death.McCouch • §6403: if person fails to survive decedent by 120 hours. the child would have to add in their lifetime gifts to make sure they didn’t get a bigger share than the other children. o Have 2 yr window to get viable fetus. • The 120 hour assumes. o Often takes several tries. o The Court came up with this TEST:  The children will be treated as children of deceased father. the person to already be in physical existence. Children CONCEIVED after parent’s death: • Is sperm (or any human material) an item of property you can leave in a will? o If there is a will. writing.5: For the purposes of determining rights to property. • (3) Child must be in utero within TWO years after determination of father’s death.) 18 . o Lifetime gifts are irrevocable – have to divide shares between issue as equally as possible. Doubtful that the requirement is born alive and survived 120 hrs.) AND • He agreed during his lifetime that he would support them. • Anyone’s best guess to how the court would resolve it.

the inheritance is still VALID. the heir is assigning an inheritance (or expectancy). • Courts requirements: o (1) The consideration paid for expectancy is FAIR o (2) When it matures (person dies). Equity – YES. o Anyone offering to buy in advance is likely to price pretty steeply. o They will say we have information – pay us X for this information. CL still governs. • UNLESS the written declaration says so. there is virtually no writing that people routinely execute at the time of a gift. and that will isn’t made/changed in the meantime. provided following requirements are met o Agreement that whatever is received in exchange represents liquidated advancement o If there is consideration and not unconscionable • Enforced even when no written agreement CA §6409(d): If the recipient of the property advanced FAILS TO SURVIVE the decedent. o They are taking the chance that the assignor doesn’t die before the person assigning the inheritance. The effort they expend is probably not much different from $100K estate to $10M estate. but it has also dried up application of the doctrine.McCouch UPC: (CA Probate Code §6409 follows UPC almost identically): • Lifetime gifts are treated as advancements ONLY IF: o (1) The decedent (donor) declares in a contemporaneous writing that the gift is an advancement (to be offset of the estate). o The person who purchased expectancy is entitled to claim the share in expectancy.Fall 2006 . OR o (2) The donee acknowledges in writing (at any time) that the gift is to be off-set from her inheritance. • UPC and CA probate Code have as nothing to say about release from intestate succession due to advancement Can we enforce releases under Common Law? • Courts of equity have traditionally recognized a release. • Concern: Person who assigns expectancy could be taken advantage of. UNLESS the declaration or acknowledgement provides otherwise. • UPC does not abolish CL – just imposes writing requirement. o The effect seems to be to dry up the litigation (which was the purpose). so the writing requirement will almost never happen. children take by representation. • Technically.Wills & Trusts Outline . o In advance of death (property owner still living). but the advanced property is NOT taken into account in determining the intestate share. o Short of a will. • Essentially reverses the CL rule o CL – presumption that gift accounted for. • If either the donor or donee acknowledges in writing that the gift is to be off-set from inheritance. can an heir make an assignment of expectancy? o Legally – NO. that is normally what we think of as a will. Heir Hunters: • Firms will locate missing inheritances for a fee. o If there is a writing that expresses this intent. the property is NOT taken into account in computing the intestate share to be received by the recipient’s issue. • If the donee doesn’t survive the decedent. it will be brought into hotchpot. the firms will locate them. • Probate Code has nothing to say about assignments. o Comes down to question of fairness. • Looks at probate notices and if there is an estate that has no close heirs. 6409(d) – presumes that gift not taken into account. o Advancements are for intestate estates. Slayers: Common Law: 19 .

o The majority: read the statute pretty narrowly as a targeted exception to the CL rule (in Carpenter). o Case involved a will – under a will there is no statutory command requiring will be given effect. In Re Tarlo’s Estate: Mr. even if we have to follow legal doctrine. • It is the name given to a flexible equitable remedy designed to disgorge unjust enrichment. legal title.g. Constructive Trust: • When faced with a statute whose terms are not easy to get around. and specifies the alternative takers. o The Court could look to public policy for grounds to override the written will. o Does he still inherit? o NY Court didn’t want to allow grandson to profit from own criminal misconduct.Fall 2006 . like here. Unjust enrichment – an equity court could apply its own principles.g.  Regardless of statutes on the books. It should apply to other situations of wrongful inheritance.” • Combination of making wrongdoer forfeit unjust enrichment. o He becomes a trustee for the beneficiaries that will inherit  All the burdens of ownership – management. The estate cannot be diverted from those persons and given to others without violating the statute. b/c he killed himself first. o Pretend the murdering heir is actually a TRUSTEE. o E. o E.g. end of story. so it goes through his estate and then to his beneficiaries or heirs. He still inherits. • Ignores the murderer in the chain of intestacy o Orders him to hand the property to the heirs that would’ve inherited had he not been in existence. Riggs v. still generally be allowed to inherit.  E.  Wife’s and daughter’s estate: • Wife: first to die. If her husband can’t be convicted of killing her. • It is not actually a trust. and this is absolute.” o Statute governs. Statutory Solutions: • There was a wave of statutory responses from legislatures. and o (2) Makes him pass title.  Unless it comes within the statute exception. it may have only been for those guilty of a crime. o Dissent: when the statute was made. Palmer: (NY) o Grandson poisoned grandfather b/c he was a beneficiary and didn’t want him to change his will.g.Wills & Trusts Outline . But clearly it was a reaction to Carpenter and should be a much broader repudiation of the CL doctrine.g. • You can behave as badly as you like. They could still inherit.: Carpenter’s Estate: (PA) o “Intestate laws cast the estate upon certain persons. Generally. He was never convicted b/c he killed himself. o Cannot stop the killing heir from getting legal title. etc. Unless disinherited by will. Tarlo killed himself after he shot wife and daughter. • Some required CONVICTION of intentionally and unlawfully killing the decedent. • E. Abuse or neglect.McCouch • There were no special statutes for people that killed their ancestors. Technically. CL still applies. Father gets to inherit. o (1) Lets legal title pass to murdering ancestor. the only way to circumvent a law or statute is to say: “we know under basic equitable doctrines. 20 . misconduct towards decedent are NOT bars to an inheritance. the requirements of the statute were never met. o Court can impose a judicial order through equitable sanctions. • Daughter is next: her estate would go to next of kin. he would be major heir of estate. • The CL rule was not unanimous: o E. we can order remedies that will put the parties in the right position.

• For probate: civil proceeding. so the killer has no right of survivorship. CA – no such rule. that is grounds for barring. • UPC/CA: Treat A like he predeceased D. that is not felony so would be okay. CA Probate §251: explicitly deals with JT’s. but very few would leave property to physician – but if he was a relative and left property. • Killing short of F&I will not trigger forfeiture. and probate assets and non-probate assets. 21 . they inadvertently didn’t include what happens by intestacy. it is passed as if predeceased D. physician assisted is permitted. the person who would otherwise inherit from the decedent is BARRED from inheriting. When amended. • When CA statute was originally enacted. • (a)(2) Intestacy. o The statutes distinguish accidental from intentional. it included how property is to be passed for both. o The killer will be treated as if he/she had pre-deceased the victim. All three kids get 1/3. or benefit under a will or a trust created by or for the benefit of the decedent • (2) Any property of the decedent by intestate succession. not necessarily required to be up to the standards of a criminal trial. In OR. If he’s ignored. A has sister B. trusts. o NC – one spouse abandons the other. CA §250: Problem/oversight: • (a)(1) Will or trust. B has one kid. The probate court can use their standards. How do we know if the killing was felonious or intentional? • CA §254: A criminal conviction is a conclusive finding. etc. was acquitted. • The killing is a severance of the interest of decedent. o E.McCouch UPC §2-803: Rule applies to wills. • Modeled on original UPC. and anyone that takes through A doesn’t benefit. but not particular about what happens with the property. • IF as a result of felonious and intentional killing.Wills & Trusts Outline . who died. • In the absence of a final judgment. o Defines what kind of killing and how property should be disposed of. §253 provides statutory support (catch-all). Burden on victim’s side. we assume the other’s inherit as if A was not there. Manslaughter etc. • Two possible scenarios: o A forfeits property. there is no conviction. When he killed himself first. The killer is not entitled to property. §259. • Most other will substitutes require that the beneficiary survive at least an instant – but if they are “pre-deceased” they are written out of the chain of succession. and A has two kids. o The burden is on the party seeking to establish that the killing was F&I. Example: D is killed by son A. the court may determine by a PREPONDERANCCE of evidence whether the killing was F&I. CA Probate Code §250: A person who feloniously and intentionally kills the decedent is not entitled to any of the following: • (1) any property. interest. o Do have a unique provision for ELDER abuse.g. • Killer who is insane: technically still inherits. Killing not technically considered F&I.Fall 2006 . OR o A forfeits his share. • (3) Any of the decedent’s quasi-community property the killer would otherwise require. would not bar. Related Issues: • Assisted suicide: o Generally covered by statutes. intestacy. • The property interest passes as if the killer had predeceased the decedent. D has will.

o CA Case: parent killed child.g.Fall 2006 . o Child can disclaim -. Her share goes to her issue. o If A disclaims. For tax purposes. • Could be lifetime gift or heir/beneficiary. • If disclaimer is valid. • (2) Taxes: o E. Parent (D) dies. Results in a TIC. o Slayer rule never requires him to give up his vested rights. but wants to make sure property goes to her issue. o Slayer statutes – we don’t know if its equal or proportion to contribution. Unity of interest. if her estate is big enough. 22 . and then gifts to her kids. o If parent puts in all the money. o Consult state and federal law to make sure you’re complying (especially for tax purposes). Parent leaves gift to child. o If severed during lifetime. take in equal shares. • No penalty for parent that slayed.Wills & Trusts Outline . If parent bought property. and no other recent decisions. she is treated as if PREDECEASED parent.McCouch E. the disclaimed interest passes as though the disclaimant predeceased the testator. or do they split 50/50? o Normal CL JT – any property other than bank account. and court divided property (real and bank) by each parties’ contribution. Statutes: • Sweep of statues that clean up the CL doctrine. Two frequent situations: • (1) Creditors: o E. • CA §277 – a guardian can make disclaimer on behalf of child. Child A has plenty of money. Requirements for VALID Disclaimer: (state law) • It is important to make sure the disclaimer is VALID – if you mess up its grounds for malpractice. does parent become full owner.g. o If she accepts and gives to issue immediately. • Specifies who can make a disclaimer. it is subject to estate tax. and what happens to the property. the gift immediately goes to creditors. • The beneficiary can disclaim any gift. and the will says property goes to A and B. it would be a single transfer from D to A’s kids. • They specify that you can disclaim by any source and any matter. and child kills parent. • Writing explaining the interest disclaiming. and child is bankrupt. Parent’s interest passes as parent’s OWN property. all the parent put in would go back to parent. • The rule doesn’t specify proportions of the property that is TIC. They walked off with everything.g. • Bank accounts: owned in proportion to net contribution. they can disclaim and then it goes to D’s spouse. • Case never appealed.  When D dies.g. Most likely a wrong outcome. Parent and child bought property as JT’s. • Seems contrary to slayer statutes rationale. and the other ½ passes through slayer rules. just keeps him from inheriting. Not treated as two taxable transfers. that is treated as a single transaction. o E.  The person making the disclaimer is ignored as if she received nothing. what procedures are required. technically parent is owner of account. and is not subject to creditors claims. there are tax consequences. Disclaimers: No one can be compelled to accept a gift against her will. estate passes by will to 2 surviving children in equal shares. o If D is married.the gift never comes into his hands. If A accepts her share. o Expect that the killer walks away with undivided ½ of property. A will also incur a gift tax on the transfer.

g. but they can restore enough property for most people (who don’t own real estate/significant assets). Unfair advantage. • Two Steps: o (1) Determine the generation where there is one surviving issue. o It’s as if they received the inheritance and then gifted it. • B gets ½. Medicaid Eligibility: • If patient receives inheritance. and equal shares of the will due to his disclaimer. • E. Can A increase the share that would ultimately pass to his kids from ¼ to 1/3? o The intention of the rule is to keep A from increasing his kids shares. • They are modes. o Courts have held that the disclaimer is not respected. not grandchildren’s. o Advancement: If A actually predeceased D. A disclaims. any advancements made to a will off-set A’s kids gifts.Wills & Trusts Outline . Not fixed. • CA §282: Notwithstanding general rule. or creditors will use most of what they have up. • §282(a) – he is predeceased. they come off the estate. • Public benefits is one area where you can’t work around it. Family Protection: W&T don’t matter for most people: either they don’t have enough for a will. o (2) THEN treat A as predeceased to decide who takes • Here it would go to A’s issue. o Results in a temporary disqualification from receiving benefits. A could disclaim and be treated as if predeceased D. o E. • Generally disclaiming the inheritance will NOT help them maintain that eligibility. o Without this rule. and A gets ½ (which is divided at his kids). • Must be elected. A’s issue would get their share with no effect given to the lifetime gifts. o Regardless of intestate or will. cannot occur automatically.Fall 2006 . • Shelter from probate. 23 . • The first generation is A’s generation. that can affect their eligibility. the beneficiary is NOT treated as predeceased for the purposes of deciding what generation the division is to be made. so his kids would get all lifetime gifts. B is dead. §282(b) – for this purpose.McCouch • CA §279: Filed w/in a reasonable time after disclaimant has knowledge of interest. and A disclaims: o Disclaimer: For this limited purpose.: If D made advancements to A during life.: A is alive. o What is reasonable in one situation may not be reasonable in another. Disclaimers and Advancements: • CA §282(b)(2): Beneficiary of disclaimed interest is not treated as having predeceased the deceased for 60409(d) (advancement provision). he is still ALIVE. When Disclaimer is Made: • General Rule: treated as if PREDECEASED the decedent.g. Statutory Allowances: • (1) Property Allowances • (2) Post-debt Allowances • (3) Family Allowances. • Trying to keep A from gaining an advantage to his kids.

g. it automatically belongs to both. 24 . o Unilateral gifts are not allowed. Private SS Accounts: • Due to the surplus problem. the presumption is that its CP. one spouse inherited property and the other exerted labor and added to its value. • Based on lifetime earnings. • Not public assistance – it is social insurance. more accessibility. she just gets her own SS. Prevents people from spending everything they have. there has been talk of privatizing SS. vested interest. o Unless it can be traced to a separate property source (i. • Projected that in about 2018. • No matter who owns the property. • Spouse that never worked is entitled to 50% of the benefit. Community Property: Partnership Theory of Marriage: marriage represents a partnership. General rule: During Lifetime: • Any conveyance (sale or gift) of CP requires consent of BOTH spouses. it would flood the stock system causing problems. • SS helps the elderly from falling into poverty. • Govt’ Investing o If gov’t took the existing funds and invested. title in the name of one spouse).McCouch o Protects family from creditors’ claims. SS will no longer bring in more than it pays out. Estate Planning: • (1) Social Security • (2) Private Pension • (3) Private Savings. • It is paid for by working people – half by employer. • Easier for people to withdraw. Once a partnership is established (married) the union has its resources and anything that comes to either spouse in marriage is property of that marriage. o Community Property: any property that was earned by either spouse during the marriage. o Separate Property: any property owned by either spouse BEFORE the marriage. and/or property acquired during marriage by donation (gift. • Doesn’t look outside the marriage to the individual spouse. o If she has her own income. About 2040 there will not be enough accumulated to pay $ out.Wills & Trusts Outline .Fall 2006 .e. or inheritance). • Presumption: Any property held during marriage is CP. Social Security: • Provides retirement and survivor benefits for individual workers. o Issues come up in maintaining property that was separate or inherited property o E. half by employee. Intestate Distribution: Providing for the Surviving Spouse: In nearly every state. there is some mandatory action providing for surviving spouse: • Community Property • Elective Share (Separate Property States). • Each spouse has a present. • Worker could opt-out of the system and set aside his own $ into private accounts. will. Monthly benefit in form of a life annuity. o Run into the same problem of people over-spending and being poor in retirement.

o She is still allowed to recover ½ of the gifts because we don’t look at aggregate value under the “Item Theory” of CP. o Decide which are CP and which are separate o CP presumption: anyone asserting separate rights bears the burden of showing that it’s separate. o He had a regular salary. o The weakness of son’s argument is that they already got bonuses. • Issue: How should the property be designated? Is it CP or JT? o He owned business originally before ever got married. have to divide CP and separate. or the lifetime transfer doesn’t become apparent until after donor has died. • If son’s current wife was trying to claim it was CP. • Son would argue that they weren’t unauthorized gifts: o Court: they were clearly gifts to the son b/c put into joint accounts for no consideration. he can do with his ½ of CP as he likes. if you pay all of your employees a bonus. o Husband is free to make transfers if he gets consideration in return. even a $10 check as a gift to a 3rd party would require consent of both (the only ones that actually get litigated are bigger gifts). • Joint Tenancy are not CP – traditionally a JT was by definition a separate property form of ownership. • At death. 152): Husband has son (respondent) from first marriage. o If we were looking at aggregate values – she was left more than ½. but after death the surviving spouse can only get back their ½ of the CP. o Court . Son came to work for him. o Here he left a will. But this was separate from label of bonus’. • In her husband’s will. o Earnings of business. Without the knowledge or consent of his wife. she is entitled to his compensation. o They get ½ of undivided interest. what he got back in exchange would have been CP.Fall 2006 . Whatever he gets as return during marriage is CP – including salary and appreciation of business thru his efforts. Case: Estate of Bray: (pg. Decedent also purchased Savings Bonds which were registered in name of decedent and son. • When the decedent dies. and she thinks the $$ is part of CP. Son thinks they belong to him as JT. o If there’s no will.Wills & Trusts Outline . she was left more than ½. presumably that is additional compensation for the year’s work. but he had lifetime transfers. regardless of original source. o If there is a will. what happens to decedent’s half? o Her ½ half goes to her. o Remedy is very much like fraudulent transfers. If husband folded this into year-end bonus (he performed substantially better than others) then it might’ve stood up. the decedent opened a JT savings account with son. and his ½ goes to her. o Assumption is that they will manage the property for the benefit of the community. and wants ½. the remedy becomes more strict: • Surviving spouse can still sue. • Treating it as a gift – done without consent or consideration o Her remedy is limited to getting back her ½ of the gifts that were made. and this was on top of it. Wife doesn’t know about it until he died. • At one spouse’s death.earnings from the business are CP b/c of current earnings. during the marriage are CP. • Possible consideration: his son’s service for years as an employee. In CA – if that wrongful transfer doesn’t occur until death. o If it was fair consideration. 25 . • Concealed Gifts: If one spouse takes the something from the CP and makes gift w/o telling the other one: o Remedy: the non-consenting can void (or undo the gift) and get the whole property back for the benefit of the community. the decedent’s estate becomes TIC of CP. Was this a bonus? o In general. she gets both halves. o Couldn’t pass CP with survivorship until a few years ago.McCouch o In theory.

But. what you look at is: o Was he intending to dispose of both halves of the property. • Wait until death and leave in his will the same amount of benefits from HIS ½ of community assets. o Typically. with remainder to children: • His will combines both sides of CP. that solves the problem. What happens if she elects against the will and keeps her ½ of Black? • Drafting becomes an issue if there is no back-up clause to the selection. he did not intend to allow W to take both what she’s left in the will. they become co-tenants of each item of CP. he can use that. o Most likely. • This might look like a good deal to W. Instead. and left White to W. • You can put a spouse to a forced election without saying so explicitly.Wills & Trusts Outline . she is cut out of the separate property. but the choice is hers. What if T leaves all CP in trust to pay income to widow for life. • If he can’t get consent: o If he can find any separate property that he owned. she takes her 1/2. We are not saying she has grounds to challenge it. especially if she is younger. When one spouse dies. • Obviously the clearer the election is.” o Husband has offered wife a bargain: she has her “election” to give up her CP rights for something in lieu. and he doesn’t have separate property to buy off widow • He’s essentially inviting her to exchange a remainder interest in her ½ for an income interest in his 1/2. She can recover ½ of each of those items without regard to other assets or transfers made at death. 26 . then when the wife gets her remedy. o Forced Election – he can force her to choose her CP or the alternatives. I want to leave both halves of the CP to our son. then to contradict the terms of the will by taking her ½ of the CP. he is free to dispose of his separate property and his ½ of CP any way he wants. does she have to give up the separate property left to her in the will? o Doesn’t require express language of contingency in will. the easier it is to determine. If you give up your ½ I will leave you a separate bequest from my separate assets. or that the wife has to make an election. • She would probably get a portion of that too. she’s just choosing which of two implied gifts she should take. or she can say no and keep her share of CP. a widow’s election is not a will contest. At his death.  Ex: “If she fails to accept this election. In his will. and o Did he intend to have that be linked to other provisions for the surviving spouse? • Here. can she also assert her ½ interest in Black? • If she keeps her ½ of her CP. • Rationale: to keep together all the CP and avoid it being broken up by co-tenancy interests. it makes economic sense to accept the terms of the will. H and W owned Black-acre as CP and H owned White-acre as his separate property.McCouch o Each spouse owns ½ of every piece of CP. he is explicitly trying to dispose of his interest and hers as well. and then the son gets the original amount. Widows Election: • Basic notion: when one spouse dies.Fall 2006 . W wants to know what she gets – what advice do we give her? • As long as the separate devise to W is at least equal to what she is giving up. the CP terminates and as a matter of legal right. • Could make double the un-consented gift to son. what if he says “Wife. H purported to leave all of Black including W’s ½ interest to his nephew N. • In determining intent of testator.” Handout: H and W were married for 30 yrs until H’s death. Any other way that Walter Bray could have made these gifts and protect them from wife’s claims? • If wife consents. • White would go to intestacy if the will says nothing else. If W accepts the devise of White. o He could sell business to himself for full consideration and make it separate property.

• All of the property the breadwinner earns is his unless he makes a gift of it. o She can accept what he left in his will. o If chooses elected share. o ONLY at death is the surviving spouse entitled to share of decedent’s estate. including assets titled in or owned by surviving spouse. who has property of her own worth $60K has filed a claim for an elective share. gift or earned. widow entitled to a life estate in an undivided 1/3 share of husband’s estate. At H’s death. H also created a revocable trust for the benefit of his niece. o The first spouse to die never sees a penny from spouses estate! • Surviving spouse should look to which is greater: what is left to her in the will. • In a traditional elective share. o Include the couple’s combined assets. they came up with a way to keep benefits in the will. notice. (CL jurisdictions). which may make it more valuable. W. • Doesn’t matter if before or during marriage. Elective Share Statutes: All CL jurisdictions except GA. Trust $270K to B: o UPC augmented estate -. or some lifetime gifs made shortly before death. • A surviving spouse can elect to take a statutory share of the decedent’s estate. or can elect against the will. UPC (original): Augmented Estate: • Instead of flat 1/3 of probate asset. In his will.Fall 2006 . o Upon wife’s death.not very effective: o Easy to drain property out of probate estate via lifetime gifts if he wants to disinherit spouse. OLD CL • Dower: Provision made for a widow out of the husband’s property.Wills & Trusts Outline . At the time of his death. Separate Property: The property belongs to whoever earned/acquired the property. o Only if issue were born into the marriage. or elective share. H was domiciled in a non-CP jurisdiction that follows the UPC. the only way a spouse is to get her elective share is if she survives him. • Curtesy: Husband’s interest was comparable to dower in his wife’s real property. • Rev. But she doesn’t get to control ultimate disposition of property. the trust property was worth $270K. H left $90K to his surviving spouse W and the rest of his property (worth $180K) to his nephew A. he should leave her exactly the same as the elective share. While married to W. o Not just assets in probate. o If husband wants her to have as little as possible. it might coincide with what she would’ve liked to have done. • CL Elective Share -. and allow her to make up the difference in order to add up to a full share. but also a broader set of transfers that occur either at death outside of probate. B. Gives wife stream of income If kids are common. she would have gotten the same either way o 1/3 of $180 is $90. anything for him to get rid of it. UPC). Bulk of title in his name o At husband’s death. • UPC also came up with a differentiated way to satisfy share: o Instead of having to give up all benefits in the will. or she can take the $90 that he left her. traditional.McCouch o o o o o Takes some of the friction off wife and children Keeps property together. or spouse has taken as JT. and then reaches a bunch of types of transfers.probate estate. 27 . o Typically flat 1/3 of decedent’s probate estates. Handout: Married for 30 yrs. husband entitled to life estate in ALL (not just 1/3) of her estate. they “augmented” the underlying pool of assets. • Major Difference: every elective share (dower. has to give up everything left to her in the will. o Doesn’t require wife’s consent.

o If we want to inflict an equal amount of penalty on the rest – A and B have to make up same proportion of their gift. She can leave her $60K estate to her other beneficiaries entirely. o Increments of 3% up through 10 yrs. o Look to the other assets of the augmented estate. he will not be able to collect anything from W’s beneficiaries. • A’s share is 2/5. 15+ year marriage. o In a long-term. • $90K from will and $60K from own assets . o If H survives. UPC trying to approximate the CP system: • Assuming a split of accumulated and combined assets depending on length of marriage. Husband can put to an election. • If the surviving spouse already owns a disproportionate share of the combined property. and $30K from B. get a 3% share. o 1/3 of that $600K is $200K. • Her share would be 50% of the $600K combined assets. and $270K to B = $600K. and to the extent that we need to make up the difference. Can get nasty and confusing. plus the $60K she might want to leave to other people. why? o We wouldn’t want to give a richer spouse 1/3 share of the poorer spouses assets.McCouch Revocable trust is a primary example – it is the most obvious next component of what we would look for to drag augmented property back to the estate (also. presently vested interest. Married for 30 yrs. wife has $60K of her own. That is only $150K. the UPC looks at what property the spouse gets under decedent’s will.Fall 2006 . but cannot compel her to give up her share of any property. o Here she has $90K of probate estate and $60K of her own. life insurance. • CP o Provides automatic. there would be no point to the elective share.g. • UPC has some advantages: o Implements a cut-and-dry sharing rule for a fixed portion and avoids all of the tracing and classification. W’s $60K. • So total augmented estate is the $90K to W. o Indefeasible. o Everyone will have to cough up a PRO RATA portion of what they would have gotten. If she dies first.) • Looking at the combined assets of the spouses when measuring the size of the share. Her elective share is $300K. How would we split up A’s (180K) and B’s (270K)? o A+B = $450K. o UPC (amended 1990): Sliding Scale • Major modification to the fixed 1/3.? • Elective share is only 15% She won’t claim share if its less than what she gets in the will. joint property. o If she’s already gotten that $200K through the will. value of her own assets. etc. • Once we know the amount of the elected share. $90K from B). o More than 1 yr. and B’s share is 3/5. • Each year up to 15 yrs goes up by 3-4%. If they’d only been married for 5 yrs.Wills & Trusts Outline . • $20K from A. then increments of 4%. o She has a right to another $50K of assets. Across the board 50% sharing. we don’t want that spouse to increase his net benefit while depriving other beneficiaries. equal sharing. get up to a 50% share. o If married less than a year. $180K to A.she would need to make up $150K deficit • Would get a pro rata portion from A and B ($60K from A. get very little. o But have to go back and classify as community or separate. • E. even if his elective share was $90K. it might be inequitable to say that he gets to keep everything of his own. 28 . and has all property in his own name. Handout: Same fact pattern.. but less than 2 yr marriage.

o When one spouse relinquishes rights and other walks off with no obligations. Hook: He retains lawyer to draft wills for both spouses. those rights remain unchanged. vested interest doesn’t change. or relinquishes rights intentionally so the other spouse can make a free and unfettered disposition to anyone they like. o CP doesn’t change when crossing state lines.Fall 2006 . there are often questions of over-reaching. unfairness. • If they move from NY to CA: o Protects the separate property they brought with them. etc. treated the same but it is quasi-CP. If decedent dies intestate. • Trial court concluded that the balance of power was disproportionate and the disclosures made were inadequate. o She gave up right to elective and intestate shares. Gives tremendous power in deciding which assets the souse is stuck with. o Elective share rights DO NOT apply to CP. He says “what’s yours is yours.McCouch o o o The spouse whose property it is can do what he wants with assets during life. only after death is it limited according to the sliding share.” She signs. and protecting the weaker. • CA Family Code: Spouses owe each other basic duties of fair dealing and disclosure. the terms of will are immaterial and she takes NOTHING by will or intestacy. • Faced with the question: is that agreement enforceable?? o Competing tensions: the right to contract. o CA makes exactly the same division at divorce or death as it would have for CP. • If accumulated in CA then moved to NY: o Surviving spouse is overcompensated if they got elective and CP. o CA has quasi-community property statutes. o Unless they co-mingle the property or let it dissipate. Cannot claim CP and elective share. surviving spouse gets ½ of the quasi-community property. Case: Hook v. • Prenup. less-informed spouse. Waivers: It is increasingly common for spouses to enter into an agreement regulating their property.  Whatever they bring is presumptively CP. • Their divorce wasn’t final when he died. o If she makes valid waiver. • Works well as long as people keep a good record of what is CP and what is separate. Morning of the wedding. 29 . o The assumption is that she knows what she’s giving up. Migratory Spouses: Quasi-CP: • People move from state to state. arm’s length clients. • Either restricts what they can do with their own property. what’s mine is mine. o No elective share. where she is presented with the docs to sign. A present. The rights blossom at death and bear no relation to the property rights during life. • A well-planned marital agreement with waiver: o Each party represented independently o In writing o Includes an appendix w/ general disclosure of each spouses’ assets so they know what they are getting or giving up. • Contained an anti-nuptial agreement which waives all rights to each other’s property. The Problem: Freedom of Contract: • Spouses that enter into agreements aren’t standard. so she is technically a surviving spouse.Wills & Trusts Outline . they drive to the husband’s lawyers office. look at what would be CP in CA. agreement during marriage.  Whatever they brought from non-CP state. The first to die can dictate which deeds are used to satisfy the share. as long as they keep it titled as CP.

don’t bother us. But here.” • Issue: is she entitled to at least her elective share? 30 . (1) Fair and Reasonable: • She didn’t know what she was giving up. o Do we look at the time the contract was initiated or he died?  At the time its entered into is the only time they can know what they’re getting into.  In some circumstances. and the materials on paper were disadvantageous to her.Fall 2006 . • She had the capacity to enter into the contract. then she is bound. which was fairly generous for enforcing waivers: Enforceable. Why did they say ADEQUATE on appeal? • She had enough time and opportunity to read the terms and she should have known what she was signing. then maybe fair and reasonable.  But if she’s giving up her only shares. and getting nothing in return. • No indication that she had any advice on what she was giving up. • Both spouses being treated “equally” – giving up rights to each other’s property – and each is free to accumulate anything they can (what’s mine is mine.they looked at: o What is she giving up? What would she have taken by intestacy?  If she’s getting those shares up front. o o (2) Made voluntarily with adequate disclosure: • Even if she gets nothing. that’s probably not fair. what’s yours is yours). • All that she got was: o The opportunity to read agreement o Her husband’s statement o Financial disclosure that his assets were over $60K. there is no objection to having only one lawyer.  She thought he was representing her interests.Wills & Trusts Outline . o As long as adequate disclosure. o If she wants to attack it. etc.  There was a substantial conflict of interest. Legal ethics would subject to discipline. by definition. AND if there is adequate disclosure.  Doesn’t suggest that anything less than intestate share would be inadequate. would look at time they died to see if circumstances had changed enough to make it unconscionable. IF:  (1) Fair and reasonable. they don’t worry about whether the terms were fair or not.McCouch Ohio applied the CL test. Court is basically saying: “unless no disclosure. they said it WAS adequate. OR • Not grossly unconscionable. they are entering into a negotiating contract against each other.  (2) Made voluntarily with adequate disclosure. and the agreement is demonstrably unfair. or in reciprocal rights. • The disclosure was MINIMALLY adequate (but that is enough for the court). the notion is that if the agreement is voluntary. • Should disclose: o Financial positions of each party o The terms of the agreement o That she has read agreement or opportunity to ask what was in it o What rights she was giving up. • Does it matter that she doesn’t have her own lawyer? o Where there is no foreseeable live conflict. • Disproportionate benefits . • She had minimal disclosure o On appeal. she has to show that it was substantively unfair/unreasonable AND she didn’t have the ability to find out.

it can go ahead. o (2) The agreement was unconscionable when it was executed. • §147 – Prenups aren’t subject to these requirements. • Hook: discretionary – up to the particular court. UNLESS o (1) No fair or reasonable disclosure of the property or financial obligations of the decedent. Fam. reasonable. and her sophistication. the surviving spouse should have known of the property and financial obligations of the decedent. Unable to show inadequate disclosure – so doesn’t matter what the substantive terms were. OR • Gives court chance to look back and see if circumstances have changed. o (2) Regardless of substantive fairness. o Cal. • Bright line safe harbor rules §143. • (c) The “Bond’s” amendment – after Barry Bonds’ divorce. if the disposition of the surviving spouse’s rights were fair and reasonable at the time the agreement was entered into. Fam.McCouch UPC §2-213: • UPC has basically codified • The waiver is ENFORCEABLE UNLESS: o (1) NOT voluntary  Voluntary not defined. but subject to other applicable law. Can still enforce if it flunks safe harbor. • At least a material risk the agreement would not be enforceable. • Including no access to independent lawyer. and full disclosure. • Major departure from UPC. CA Bar examiners regularly test on this. at husband’s death). Probate Code: Regular agreements between spouses. §144 provides a more discretionary determination that court can make on equitable grounds. Cal. Code §1615: • (a) A premarital agreement is NOT enforceable if the party against whom enforcement is sought proves EITHER of the following: o (1) That the party did not execute the agreement voluntarily. unless there is independent counsel. • §144: Even if you flunk §143 (safe harbor). • If no counsel. • Substantive or procedural fairness. • Even if safe harbor is not met.g. Code §1615. AND before execution of the agreement. AND  (3) INADEQUATE DISCLOSURE • Hook would come out the same way. • §143: waiver of death-time rights generally enforceable.Fall 2006 . • Can never be sure at the time agreement is drafted whether it is enforceable for sure.Wills & Trusts Outline .  (C) Party did not have knowledge of financial obligations/property of other party. OR o (2) The surviving spouse was not represented by independent legal counsel. • Hook: she could challenge the agreement. PROVIDED that it doesn’t find that enforcing the agreement was unconscionable at the time for enforcing the agreement (e. ALL of the following applied to that party:  (A) No fair.  (B) No voluntary and express wavier in writing of any right to disclosure. o UNLESS:  (2) Both UNCONSCIONABLE. Defines what “voluntarily” means in (a). it will depend on court’s discretionary determination and changing circumstances. CA Probate Code §141-and following: • Own special rules. 31 . it is enforceable if the court determines: o (1) At the time of signing.

Goff: Evidence that Granville never knew about his child or grandchildren. and the parties did not lack capacity.” (3) If one party has no legal counsel. • They probably don’t think about documenting an absence of undue influence. raises a very serious obstacle. o E. • You have your choice. o (5) Any other factors the court deems relevant. Must be done under §1615. To show that the agreement was NOT executed under those. The relatively clear safe harbor of §143 would be better. they are presumptively entitled to intestate share. Protection of Pretermitted/Omitted Children Testator can disinherit any and all children: • As long as a will is enforceable. • Provision in will that said “I am not married and have no children. must be informed of the terms and basic effect of the agreement. • Have to meet ALL FIVE FACTORS including what else the court deems relevant. • That is a HUGE burden.” 32 . “Cooling period.Wills & Trusts Outline .? • §147: if you are talking about only waivers of death-time rights. but minority of states apply it to children alive when the will was executed. o Just looks at the four corners of the will • Massachusetts-Type: Less cut-and-dry. less definite. • UPC and many states have “pretermitted child” statutes to protect kids accidentally omitted from the will. the omitted child is entitled to that intestate share. o o o o o When does 1615 apply. UNLESS the testator can show that the omission was not an error. o Mention the child specifically in the will and say you want to omit o If you’re silent. community property rights.McCouch Not voluntary UNLESS: (1) The party was represented by independent legal counsel (or knowingly waived right) (2) Mandatory 7 day period where you can’t sign. He didn’t provide in his will for his son Joe and Joe’s two children. etc. • Typically applied to any child born or adopted after execution of will. fraud. divorce. if you happen to get to §1615 and manage to satisfy those requirements. and are dealing with it NOT at death. then waivers of death-time rights can be upheld. and when does 143 etc. Two basic forms (how to interpret will’s silence toward child): • Missouri-Type: Bright line o If a child or descendant is not “named or provided for.Fall 2006 .g. that disinheritance will stand. that will also be valid/upheld.” then statutory presumption that they are entitled automatically to an intestate share. o If a child or descendant is not provided for the will. o Only disadvantage: probate is ONLY death-time rights. • Hard enough to prove there was fraud etc. o (2) Under (c). The grandkids are claiming share of estate. there are two ways to satisfy: o (1) Bring yourself into the provisions of the probate code. o Trying to carry out testator’s intent Case: Goff v. (4) The person trying to enforce the agreement bears the burden of showing that it was NOT executed under duress. o If you draft a pre-nup. allows for far more evidence as to what T intended. undue influence. If you meet those requirements. Any rational person will not try to satisfy §1615. as well as to afterborn/adopted children. no matter how clear surrounding circumstances. you don’t have the options of using the probate code. o Merely a rebuttable presumption.

but don’t want to expressly name • “Anybody not mentioned in this will” is probably NOT enough. b/c not claimed by B & C. they automatically claim intestate share.McCouch • Also purports to disinherit a person that contests the will. • Old statutes act as standing invitation for court to step in and declare child was inadvertently omitted. • If he intentionally disinherited. o The rule is only over-ridden by that amount. was he unaware they existed. o B and C would have been 1/3 beneficiaries each. and devised substantially all of his estate to the other PARENT of the omitted child. • “Any heir who would otherwise be entitled gets $1. and the rest to my nephews. but there is a GIFT intended to be in lieu of testamentary provisions. • After-born children: o Presumed entitled o Unless will specifically says ALL children or after-born are omitted. • Those born after the drafting of the will are presumptively entitled to their intestate share. o Pretty boiler-plate in wills now. • Threshold question: Assuming they are his grandkids. If don’t want to acknowledge descendants by name. not enough. o All dispositive provisions are over-ridden. Miss and Mass statutes. (clauses saying which property to which takers). o Represents a potentially disruptive influence on T’s intent. Satisfies UPC. • Holding: If a person makes his last will and dies leaving descendants not named or provided for. • That is how much they still get. if inadvertently omitted. if he died intestate.  See below.” • B and C don’t show up in will and want shares. or  (3) The omitted child gets nothing under the will. 33 . the after-born are assumed to not have been in T’s mind. Executor can argue it bars the child from intestate share.Fall 2006 . o Three exceptions:  (1) Intent to omit is intentional  (2) T has existing kids when will executed.” Still indefinite. o A gets NOTHING. They are not contesting: just claiming that under the statute they get their share as long as not intentionally disinherited. how do you deal with it? • Don’t want anyone not mentioned to take a penny (e. hidden children). • Existing children: o Assumption is that leaving them out was deliberate o No burden of proof on executor o Existing children omitted unless provided for. or did he willfully misrepresent the facts? Court: he was not aware they existed. and doesn’t have to expressly name.Wills & Trusts Outline .” o That does the trick. • “Nothing to grandchild A. T shall be deemed to die intestate as to the omitted child or descendants. they get nothing. • For an omitted descendant or spouse. his entire estate would go to his issue.g. UPC §2-302: Drastically limits the scope of protection for omitted children. and are therefore entitled. Differences between UPC and traditional Mass/Miss type statutes: • UPC limits protection to situations where child was born/adopted after execution of will. o If he died without will. o Covers existing and future children. • “Any child not otherwise provided for is intentionally omitted. • Residual 1/3 of the will is still good (goes to nephews). If EXPRESSLY disinherited? Ex: 3 grandchildren.

McCouch o See Goff: seems like court is less interested in what T wanted than to protect innocent people. • Other differences of CA Probate: o UPC – if omitted child is entitled to intestate share. other people’s recollections.” then its given effect. life insurance. • UPC narrows the protection: • Limits override to cases where it seems MOST LIKELY that he didn’t know: future children. • T might leave residuary to charity so estate doesn’t fail b/c no living heirs. then they are barred from taking intestate share. they do it the same as for creditors. o Generally covers the old-style and new-style statutes: • Makes intent pretty unmistakable. o After-born children: basic intestate rule holds. but a trust does.  Regular abatement rules in residuary etc. o Transfer to child omitted from will. the child becomes entitled to intestate share. Make sure estate doesn’t land in hands of disinherited children or laughing heirs. Three Exceptions that may deprive after-born child to intestate share: UPC 2-302(b). If T is father of a child and never knew.). no matter how clear the T’s intent was. o Puts revocable trusts and wills on same footing. o CA – makes all of the other beneficiaries contribute on pro rata basis. then we follow testator’s intent. o Where a will says nothing about beneficiaries. CA allows child to sue for share. • If there is a provision in the will or trust. o “For purposes of this part”:  Testamentary Instruments • Means decedent’s will or revocable trust. and avoids potential interference. • Allow oral statements.Wills & Trusts Outline . CA Probate Code 21620-21621: • One MAJOR difference from UPC: o Failure to provide for child in “testamentary instrument” rather than saying “will. o Don’t have to get to exception about transfers outside of will if they are in trust. writing. o CA Probate 21622: If the decedent failed to provide for a living child solely b/c he believed the child to be dead or was unaware of her existence.” • §21601: Phrase “testamentary instrument” and “estate” have special meanings for these provisions. CA 21620-21621 • (1) Intent to omit after-born is intentional and on face of will. • UPC 2-302(c): If T fails to provide for a living child b/c he believes the child to be DEAD. the child gets intestate share. then it goes to intestacy • If intent to omit is on face of will.  Estate • Includes a decedent’s probate estate and • All property held in any revocable trust that becomes irrevocable on the death of the decedent. o Note: If the will itself has successfully been contested. that is equivalent. that is enough to negate the general protection of giving her a share. 34 . etc. • CA did this b/c so many people were using revocable trusts that they didn’t think they needed a will at all. providing for or intentionally omitting a child. • §21622 adds ground of MISTAKE. but the will fails. • Draws bright line: o Any existing child is known and omission is deliberate.Fall 2006 . o If T makes a provision that says “all omissions are intentional. amount of transfer. • (2) Gifts outside of the will: o Non-probate transfer (trusts. that child is entitled to intestate share. etc. If the circumstances indicate that it was made in lieu of the will.

o (2) Transfers outside of testamentary instruments. ** Remember: This protection is only if born/married after ALL testamentary docs executed.” presumably any child from any marriage. H may have had good reasons for cutting out child from previous marriage (child in custody of other parent.McCouch • (3) At the time will was executed. • Modern default remedy is to give an after-married spouse an intestate share of the estate. Omitted child takes no intestate share. • The assumption is that the after-born child would be provided for by W. • Makes sense to say if existing didn’t get anything.  Remember: testamentary instruments include revocable trusts for this portion of CA Prob o (3) Valid agreement waiving right to spousal share. After-born child demands ½ intestate share of estate. and that intention is on face of will. • At CL. we assume failure to provide is deliberate. B is born. depending on other surviving family members.Wills & Trusts Outline . • The provision doesn’t say anything about the after-born child have the same parents. o If T fails to provide for his surviving spouse who he married after the execution of testamentary instruments. 35 . • Will still leaves everything to W. T had at least one child and left substantially all of the estate to the omitted child’s other parent. o She gets ½ of all CP.  Can look at all evidence to show that it was his intent. the omitted spouse shall receive a share in the decedent’s estate. The codicil is deemed to have been executed in 2002. R. o (b) One existing child of marriage • After-born child doesn’t received intestate share if estate left to other parent.  Provision only meant to aid inadvertent disinheritance. • CA §21611: spouse will not receive share under 21610 if any of the following: o (1) T failed to provide for spouse deliberately. etc. and since the will leaves everything to W.  Left non-probate transfers to the spouse in lieu of testamentary provisions. Check for codicils (and revocable trusts in CA)!** • Ex: in ’98 T executes a will that gives ½ of estate to wife S and remaining to daughter. and up to ½ of all separate property (as if he died intestate). the after-born gets nothing either. o Hypo: H’s will: leaves entire estate to W. o (a) No children • After-born child gets intestate share if no child when will was executed. Protection of After-Married Spouse Marriage after execution of the will: • If married after will in place and T didn’t change while alive. T executes a codicil that changes the executor. In 2001. All it says is “previous child. it implies that H wanted nothing to his existing children.).Fall 2006 . so B is not entitled to any protection under the pretermitted child statute. o (c) One existing child from previous marriage. • The child not entitled to intestate share. a will was completely revoked upon subsequent marriage (for a woman) or subsequent marriage and birth of issue (for a man). • If he already had an existing child. In 2002. • UPC 2-301: could be all of the estate or ½ of it. • CA §21610: Very close to omitted child statute.

o In CA and most states. Just the threat of will contest may be enough to get a settlement so that it doesn’t all come out. leaving the rest of the will intact. life insurance. etc.  Privacy concerns. • Remedies: o Remedies for the successful contest are not well-tailored to carrying out T’s intent. (2) Sound Mind: • Very contextual: o A person may be perfectly competent to do some things. or was there some activity that interfered with expressing those true intentions? Overarching Themes: • Burden of proof o On CONTESTANT. and strikes the tainted provisions. he could have more kids). Weakness of system. o Successful contestants are rare. and not others. o Ex: get married vs. Testamentary Capacity: (1) Age: • §6100: A minor (under 18) cannot make a will.McCouch Will Contest: Grounds for Contest • Testamentary Capacity • Undue Influence • Fraud/Duress/Mistake Basic Problem: Does the will actually reflect T’s intent. even if doesn’t bear relation to his probable intent. • Testamentary capacity is an extremely LOW standard. o General provision is to look at the terms of the will. Virtually impossible to know parties when T is still alive (e. o Ex: Contests based on lack of capacity:  Did T understand what he was doing? If not. • Requires ONLY: o (1) T understands the nature of the testamentary act 36 . • Can do other will substitutes: revocable trust.  Court doesn’t want to spend time on it.Wills & Trusts Outline . • Contests are Death-Time: o Seems perverse to wait until T is dead in order to contest. o Existing system puts off fact-finding until T is dead.Fall 2006 . deed property. Generally pretty difficult. o Want to make it possible for anyone that isn’t suffering from dramatic impairment to make will.g. rather than when evidence is at its freshest and most reliable.  Suck with intestacy. He has to meet the BOP on factual questions. o Settlements might make it worth bringing the contest:  Often will contests involve private or embarrassing manners.  Don’t know who heirs are until T dies. the remedy is to throw out entire will. there is no procedure for probate during life (anti-mortem)  The surrounding family members might feel more comfortable contesting after T is dead. complicated business dealings. Will contests can be extraordinarily time consuming. You would think T would want to get will verified and authenticated in advance so he knows what will happen at death. • All non-probate transfers are fine.

 No misimpression that he has no living relatives when he has extensive family. 37 . (3) T is able to remember and understand his relations to family etc. knew he was disinheriting his daughter. • Mental illness does NOT by itself mean that he lacked capacity. general understanding as to what he has. 178: The will itself seems coherent: cut off one of his daughter’s with $5. and their answer was no. or visa versa. The court entertains all sorts of evidence about his erratic behavior. and left the bulk of property to various individuals and charitable organizations. Barnes v. the portion of will that coincides with delusions will be stricken. • Must go beyond the merely eccentric. Some fundamental delusion affecting his understanding of who is in or out could give rise to a contest. o The controlling question is whether there are ANY facts from which T could have reasoned. • A belief can be illogical.McCouch o o  Understands what a will is  Must know that he is executing his will. o On review.  Basic awareness of who his family is. regardless of whether the average person would have reached the same conclusion. he was clearly living on another planet.Wills & Trusts Outline . (2) T understands and recollects the nature and situation of his property  Not required to have accurate financial statement or grasp on it. What was the jury thinking? o They were presumably asked if he was of sound mind. o The closest he got was disapproving his daughter’s lifestyle – but any parent can disinherit children unless he is completely delusional about it.Fall 2006 . He knew who his family was. • The jury concluded that he lacked capacity.  Not suffering from delusion that he has vast riches when destitute. yet not be an insane delusion. o A person with delusions on topics OTHER than will doesn’t mean will is subject to attack. so the Sup Ct of Missouri finds sufficient evidence to support the juries finding. • The delusion must have had some effect on T’s disposition of the property. what property disposing of. etc. Marshall: pg. • What appears to have been going on: o Jury was told what a burden he was to the family. and the jury is likely to find he lacked capacity.  Have some realistic.  Not required to understand the complexities. o The T was painted as an unreasonable eccentric. They can have unrealistic beliefs and still have testamentary capacity. • Was he really unable to meet this basic test? o The cases are replete with saying that peculiarities are not enough to defect on testamentary capacity. it is hard to overturn findings of fact. • None of his delusions had effect on will. In a general sense. however. No intricacies required. They played on the juries sympathies. o If generally capable. o As long as delusions do not affect the will. Diagnosed with mental illness. • The problem is the test for “sound mind:” o Understood what he’s doing. and who cutting in and out. o Their instructions didn’t confine them to the relevant test. He should be aware of what is going on. (3) Delusions: • Mental disorder that causes T to entertain beliefs that are o FALSE and o UNREASONABLE with o NO BASIS IN FACT.

o To authorize POA. the T would not have made the will that he did. Will Delegation: • A will is one of the very few things that CANNOT be delegated. do something about the assets. o Not just “might’ve” caused. passing notes over the fence. what matters is if the delusions caused the will. Any good reason. the power will spring into existence. Hypo: Assuming the will can’t be revoked. • When the will is drafted. change beneficiary delegations. • Authorize someone to make gifs of your property. o Tell others that the marriage is great – so that they won’t know grounds for contest. etc. Power of Attorney: • Ex: If T lacks capacity. there is NO WAY to revise/make/alter a will. Conservator: CA • No longer impossible to change an existing will (in CA and some other states). • EXCEPTION: CA statute allows a conservator to make a new will. • Once lose competency. o Durable POA can authorize agent to make gifts. 38 . can we make the will ineffective? • Is there any way to minimize the effect of a will that everyone agrees is outdated? • If you can’t do anything about the governing instrument. T must be competent.Fall 2006 . • T can delegate authority to do most acts. • If drafting a POA b/c of future need. but might have wanted to leave some to other relatives. o One function cannot delegate is the power to MAKE a will. He clearly had some capacity (managed business) but was deluded about his wife’s relations. The only person that can exercise on behalf of T is the conservator. • Good advice: exercise the POA at a time when you have capacity to do so (even though don’t need it now) and provide by its terms that the delegation will remain effective – or kick in – when T loses capacity. • The jury assumed that the beliefs about wife were absolutely false and unreasonable. That is personal to T. o Form of agency arrangement. what can T or those around him do to bring the will in accordance with what they think his intent would be? Provide in advance someone to manage your affairs – power of attorney. o The siblings need it more than she does. have to be capable of doing the same thing you are authorizing agent to do at the time you set up POA. • If you’re his lawyer: advise that he has an innocuous. o Power of attorney can’t change the will. consider assigning a trigger: o Identify people that if they agree you’ve lost capacity. o The majority holds that the will was a product of the delusions. a durable power of attorney survives incapacity. sensible reason for why he’s doing it. • Does this delusion have an effect on the will? • It is not a question whether the contestant can prove there was a causal affect between delusions and provisions of will. 190): Imagined his wife was carrying on with male callers. o Keep it to himself that he believes his wife is being unfaithful. o Ex: Set up trusts and make gifts to spend out estate. o He had delusions on the one hand. • The standard of capacity for drafting a power of attorney: o It is a little higher than capacity for drafting will. but might have the power to set up will substitutes.McCouch In Re Honigman’s Will :(pg. that she’s dragging them up to her room by a sheet. o Write out list of directions or general authority to someone who is designated to act. o If it meets the requirements. etc. etc.Wills & Trusts Outline . o Except for the delusions. • CA would require a more clear factual showing. He cut his wife’s share to min statutory share plus $2500.

but her perception is that they were trying to control her. • Conservator acts under court supervision. • Sitting in on will drafting. Bottom Line: There is a qualitative difference from someone completely divorced from reality and those that are a little more eccentric. o Always subject to requirement of submitting accounts so family members can review them. o Forced. pressured T to execute a will he wouldn’t have otherwise done. lawyer that benefits heavily by will) • Principle. Completely disinherits her estranged siblings. o Influence is not undue unless the free will of T was destroyed and resulted in an instrument that reflects the will of the party exercising the influence.Wills & Trusts Outline . Presumption Test: • Bursting bubble theory: contestant can try to rebut the presumption. pastor. the presumption disappears and up to factfinder to decide if influence was undue or not. not the T’s. private relationship of durable POA. coerced. o Court must review terms of new/revised/amended will. • Focus is on the testator’s state of mind: o Was there a reasonable basis in fact for her beliefs?  No matter how false her beliefs were. close family) o (2) Active Procurement OR • Had some role to play in the execution of the will.its an objective fact. Undue Influence: Basic Concept: • UI is coerced volition. rabbi. • Suggesting terms of will. Siblings tried to have her committed -. including causation and no possible explanation. despite a relationship. and left nephew as beneficiary. It is a spectrum. • Tighter control than the informal. doctor. For insane delusions. agent. psychiatrist. She kills herself.g. • There is almost always some influence – not all are to the extent of UI. • This was NOT an insane delusion. If they can show there is a reasonable explanation for why the will was drafted as it was. • Causal link b/w person exercising influence on testator and getting final document drafted and executed. AND • Testator and someone who is alleged to have exercised UI • Loose term – encompasses: • Fiduciary relationship (e. • There is a reasonable basis in fact.McCouch • Involves a declaration of incapacity and the appointment of someone to act on behalf of that person. and allow incapacitated person to be heard. the standard is demanding.Fall 2006 . o (3) Suspicious Circumstances 39 . • Have to go to court. Siblings filed a petition alleging that she lacked testamentary capacity at the time the will was executed due to insane delusions which arose from her misunderstanding their efforts to help her.g. • It is perfectly reasonable that BonJean took this point of view. Matter of Estate of BonJean: pg. file petition. o Once presumption is rebutted. o Someone interfered with T’s free and unfettered decisions. and the will reflects T’s intent. They claim their motives were good. trustee. 195: She is depressed and convinced her siblings were trying to have her committed. power of attorney • Person of influence (e. • Presumption is raised if they can show: o (1) Confidential relationship.

She made a will and left various properties to him. out of line for what would otherwise have gotten. o E.  Do any of these suggest Holland was pressuring her? Typical suspicious situations: • Caregiver situations • Weakened. • Helps filter out some cases where the estate is divided and proportions somewhat different. relation. and then changes to someone else right before death.Fall 2006 . o Holland proves this with lawyer that drafted will. • By requiring UNDUE benefit – gives the factfinder some leeway to allow a benefit that exceeds what would normally have been expected. “friend” moves in on basis of quick friendship that materializes immediate when T is already vulnerable. the proponent must show by preponderance of evidence that undue influence had not materialized (give an innocent explanation to rebut it). She was a business woman and owned and managed properties. once presumption is raised the proponent must show T had independent counsel and advice and will was drafted so T knew what she was doing. he would become legally her son and only heir. • Dissent: no evidence that Holland had anything to do with the will. o No grounds to raise presumption. hints of improper marital relations. • Majority: Holland was in confidential relationship with Fanny. • Unnatural dispositions. and was it properly rebutted? o Suspicious circumstances cited:  Age. 211: Fanny was with man (Holland) 15 yrs younger who was a lawyer. o String of wills with everything to sisters.: One kid provides care and time to look after parent. o That is enough to raise presumption.Wills & Trusts Outline . Precautions: • The “impartial lawyer” o He did what she asked. He could have documented her motives in his records a little better by saying she was on close terms with Holland and he had nothing to do with prep of will. executes deeds. • Allows unequal distribution to be okay by requiring UNDUE in order to bring the contest. o Under Miss. that’s not much. writes checks etc. o Could have warned her that it might be contested and explain the risk. 40 .g. o Size of estate is always relevant: if she is a mult-millionaire and leaves $30K. he would be instant sole-heir. Sisters disapprove. and parent makes that child primary beneficiary. • E. • Marriage: o If they got married. In Re Will of Moses: pg. vulnerable state. • CA also Requires: o (4) Undue Benefit: • Disproportionate. alcohol problems.McCouch • Opens up inquiry to any other facts or circumstances that show that there was UI. Lawyer in town drafts the will and she runs it by judge friend and lets him know that’s how she wants the property to go. o He’d either take by will or intestacy. o Not much he could have done to get a different result. but perfectly consistent in light of the circumstances. • CA: Presumption shifts the burden: o If managed to raise the presumption. • Adult Adoption: o If she adopted Holland. She dies and will is offered to probate. Sister’s contest. dependent. and becomes primary beneficiary. o Challenges on both grounds: is the presumption raised.g. then suddenly becomes agent. law. and suspicious circumstances.

o The next case will probably have to make another judicial definition of what is meant as “healthcare. HYPO: Elderly testator that is dependant adult. o If they are related to T. menace. She is not in an institution.” ALWAYS ARGUE. but is in her own home. o Worry is that someone will slip in their name or alter terms. he would take by intestacy. 41 . unless fits an exception. • Does the friendly caregiver come with in the legislative intent? o Sup Ct. The relationship is based on a long-standing friendship. Definition: Anyone giving substantial and on-going services to the dependent adult. CA Probate §21350: statute declares invalid any donative transfers to any group of disqualified persons. • (3) Law partners o Not only drafters disqualified – shareholders/partners in which drafter has ownership. §21350 DOES NOT APPLY if: • (1) Transferor is the relative (co-habitant.McCouch o o o Siblings would have no standing in will. Almost impossible to contest once married party is dead. CA Probate §21351: Exceptions to ameliorate the harshness of the rule. o Dependent adult: over 18 suffering from limitation that restrict ability to carry on daily activities. • What are substantial and on-going services? o The statute is far from clear. o (c) Signs and delivers written certificate of independent review. etc. She tells her lawyer she wants the caregiver to be a major beneficiary in the will. Why do we have this on the books? • It’s a knee-jerk reaction to large-scale abuses by a lawyer named Gunderson who frequented the retirement community. • (1) Person who drafted the instrument o If involved in drafting the will. o Ex: secretary that writes and prints final version. • Bar Assoc. • Presumably intended to make sure that an objective person has a chance to determine the circumstance and satisfy herself that this is not an abusive situation. co-habitant. employee) of person who drafted instrument. duress. marriage. but invites some friends to live with her and look after her daily needs. • (2) If the instrument reviewed by an independent attorney who: o (a) Counsels transferor about the nature of consequences of intended transferor o (b) Attempts to determine if the intended consequence is the result of fraud. strikes him and goes to legislature to make sure this won’t happen again.) of the person who drafted the instrument. o Transcriber is person who is directly connected with physical preparation of document. befriended them. UI. the statutory disqualification doesn’t apply. • (5) Person who is related to (4) • (6) Care custodian of dependent adult o Covers nursing home operators and others formally engaged in providing healthcare. • (2) Person who is related (blood. Intended to give a bright-line rule that disqualifies these people. and drafted himself into their wills. o What does this statute add to the CL rule of Undue Influence? o This statute does not take the place of UI – it is an overlay of it. or if no will. • He has looked at the docs and circumstances and is persuaded that everything is good. any gift is void. • (4) Any person with fiduciary relationship with transferor who transcribes the instrument. There are lots of death-bed marriages in cases where T worries about will contests.Wills & Trusts Outline . He’d either take by will. looked for clients.Fall 2006 . • Flips the burden: imposes duty on lawyer to figure out if any of these things are going on.

duress. Bottom Line: • Professional conduct standard (1. No-Contest Clauses: • Any person challenging validity of the doctrine takes nothing. Not sure if these statutes have really helped with UI. o Haynes: grandchildren either sit quiet and get their small inheritance. menace. • (3) The court determines by clear and convincing evidence. First National State: pg. unless:  (1) L reasonably believes there is no adverse affect on interests of either client. o If he gets Isabel’s clear consent. Moves in with daughter D. 218: Isabel. M. • Lower courts uphold the arrangement. • CA statutes (disqualified person rules) don’t reach him b/c he’s not a beneficiary.7) is independent of whether the will should be upheld. that the transfer was NOT the product of fraud. to leave things to D. he still has to worry about  (1) showing that the consent was voluntary (not from UI). • BM drafts new provisions that gives grandchildren base sum. and ½ to grandchildren). but cannot rely solely on that evidence. the standard of rebutting the presumption of influence should be higher. or if its caused more problems than its solved. UI. • BM advises her to change domicile from Penn to NJ. 42 . but not based solely upon testimony of any disqualified person. • They are widely used and generally upheld o Variation among states as to limitations. but that doesn’t mean will passes probate. D. Her daughter and son-in-law started to take interest in what she is going to do with her money. o Can introduce testimony of drafters. • Intended to scare of contestants with the threat that anyone who tries to mess with the enforcement of the terms of the document offered for probate risks losing everything. Hard to tell if he’s working for D or I. or UI. Hanes v. o Opportunity for the disqualified beneficiary to REBUT. they get nothing. Once Isabel moved in. • NJ Sup Ct: Reviewed standard and sent back. Just imposes another step on a formal level. now purporting to represent her mom. disapproved of her granddaughter’s lifestyle. • Sup Ct of NJ: looks hard at enforceability of no-contest clauses. o Where a lawyer who drafted the will has a conflict of interest. and any presumption of UI was adequately rebutted.Wills & Trusts Outline . o Conflict of interest: BM represented D and family.  (2) conclusion that there is no adverse affect – hard to tell. o D should have to show by clear and convincing standard that there was no tainting. They do it on a fairly perfunctory basis.7: prohibits lawyer with conflict of interest from undertaking representation. rest to D. o Rules of Prof. • Still have the presumption requiring clear and convincing evidence. The drafter of will left property per stirpes (1/2 to D. o He should have recommended they use another attorney. family lawyer and D’s husband’s business lawyer. BM. or risk getting nothing by contesting the will. also takes active interest. Conduct: 1. • What should BM have done? o Validity of will is at risk unless there is a heavier showing to rebut the UI. o All other disqualified persons can try to show that they weren’t exercising F. • Heightened burden of proof b/c greater potential for UI.Fall 2006 .McCouch • People aren’t likely to pay for a serious investigation on this prong. • He could get off without professional reprimand. o Safest route is to get another L. If will is enforced. and  (2) Client gives informed consent. the testatrix.

the no-contest clause is not enforceable if the beneficiary has reasonable cause for bringing contest based on:  (a) Forgery (signature isn’t genuine). • Would give penalty-free contest if D gave directions to BM. • But if the T gave the same instructions. but seems to mean: • If there is a reasonable basis for believing the contestant will prevail. then a no-contest clause is also enforceable. unless the transferor affirmatively instructed drafter to include those provisions. there is no risk.) is not a will contest. o 21307: A no-contest clause is not enforceable against the beneficiary with probable cause that contests a provision that benefits:  (a) Person who drafted or transcribed the instrument • This statute opens up those who benefited b/c of the exception in 21351 (relatives. Why does the UPC have that clause? • What the UPC is trying to do is keep out frivolous suits.Wills & Trusts Outline . Disputes over the classification of property (comm. o If you bring a frivolous will contest – you will lose everything.  (b) Revocation (will superseded by another one). • Some evidence that Isabel did affirmatively direct those provisions be included. • Two Exceptions: o 21306: Despite the general rule. • The underlying question is what constitutes a CONTEST? o E. etc. then can’t use this provision. The widespread and old-fashioned rule is that no-contest clauses were enforced: • The Sup Ct took the UPC as an expression of policy and changed the CL too.  (b) Person who gave instructions to the drafter. Bottom Line: we have a pretty restrictive regime.  21306 doesn’t go into UI. the will can be contested. even though it may upset the will. the exception probably won’t do you much good. o If they contest the will and win. people with independent review) to a penalty-free challenge. lack of capacity. then the no-contest dissolves with the rest of the will. o UPC does not define probable cause. • If you are counseling an unhappy beneficiary: o How much of a gift does the will provide? If disinherited completely. CA Probate §21300 and following: • 21303: codifies the CL rule – if will is valid. should consider the merits more closely. even if the contestant loses on the merits and will is upheld.g.McCouch o NJ used UPC: No contest clauses are enforced UNLESS the contestant had probable cause. o If there is a reasonable basis. • If BM followed D’s instructions rather than T’s. or  (c) Action to establish invalidity by §21350. • Narrowly focused exception – unless there is a will that grossly favors the drafter or caregiver. If will provides substantial gift. they want to protect right of the contestants. .Fall 2006 . o Construction contests (what did the testator really mean – ambiguous terms) • CA – allows potential contestants to bring a request for declaratory judgment to determine if what they want to do is actually a will contest. There is nothing to lose. Fraud: Basic Concept: 43 . or sep. the UPC refuses to enforce the no-contest clause.

• Seek a constructive trust: o They allege she intended to leave them money. intentional deception o Assumes specific purpose to deceive and disrupt the will. The distant cousins (Π ’s) allege taints involved in the testamentary process: fraud. If they can’t. o The case has already been up for probate. and state a claim for equitable relief. Wills: Basic Concept: • A will is a written instrument executed in accordance w/ formalities that directs the disposition of T’s property at his death. it is possible to get equitable relief. leader of a religious cult. they usually do that. o Ex: Beneficiary tricks T by misrepresenting what other beneficiaries have done. • If tainted provision can be severed. “Joe has lost his mind and is an insane asylum. • (2) Fraud in the inducement o T has requisite intent. You don’t want to give your money to him. Statutory Formalities: • Goes back centuries.McCouch • Fraud is the willful deception as to the character or content of an instrument. murder. they can collect. o Refers to deliberate. or as to extrinsic facs that induced the will or gift. o By means of fraud. duress. o T had no testamentary intent as to instrument signed.” Latham v. o Runs contrary to what we’ve heard before -. If they meet that burden. which require: o Will signed at the end by the T o Attested by two present witnesses at the same time o Witness must sign in T’s presence.that it has to be signed during life. but is fraudulently induced into making the will or gifts. 239): She gave almost her whole estate to Father Divine. o Beneficiaries have no rights under the will until T dies.Fall 2006 . • Π ’s are not contesting the will – no standing – they are not beneficiaries or disinherited heirs. • The principle distinction between a will and other conveyance: o A will takes effect only upon the DEATH of the maker. T prevented from signing new will. and UI. duress. Two possible types of fraud: • (1) Nature of instrument itself: (Fraud in the execution): o Includes cases where T was tricked into signing a doc not knowing it was a will. and where one “will” was substituted for another. need to show some kind of wrongdoing and a breach of a relationship of trust and confidence (something other than that father divine was being unjustly enriched). then the whole will is stricken. • Wills can serve other purposes: o Name guardians o Disposal of bodily remains. Father Divine: (pg. o It is ambulatory: no operative effect during T’s lifetime. There are still states that follow the original wills statutes.Wills & Trusts Outline . o It is fully revocable or amendable at any time. • Bottom Line: in order to enforce a constructive trust. UPC Formalities: §2-502 • (1) Writing: 44 . o If Π can show the will was never made b/c FD interfered.

o (b) Observe • Witness has to observe something about the T and the written doc. but not on W&T. • E. Noticeably Absent: NO date requirement: • Most have date anyway. • (2) Signed o What is a signature? • Any mark made with the intent that it be an authentication by T. o Presence – conscious presence test. o Can witness sign after T’s death?  Decisions are split. • T signed will or acknowledge her earlier signature in the presence of attesting witnesses. CA Probate §6110: • (a) Writing • (b) Signed by T with any mark of intent: o Or in T’s name by some person in T’s presence and by T’s direction (disability etc.a simple X if it is affixed with the intent to authenticate. 45 . o Congress authorized the use of electronic sig. o Physical piece of paper. where will is cramped for space and crawls up to margins. • (3) Witnesses: o (a) Adequate number • Two witness’ required (some forms require 3 just to make sure).g. Need to wait for CA SC to tell us.  UPC – as long as w/in reasonable time after witnessing took place. • Witnesses must still “witness” something the T did: the signing itself. or another clause added that follows T’s sig.McCouch o Will must be in writing. and  Understand that the instrument is the T’s will. • Illiterate/physically disabled . • The signatures need only be placed on the will within a “reasonable time” after the witnessing took place. more has been added. on contract docs. o T can have will signed by another person at her direction and in her presence. • Their own signatures need not be affixed in T’s presence. o (c) Signing: • Must make observation about T and doc so they can affix their own signature. o Don’t have to sign will in each other’s presence (or in T’s). but must observe at same time  UPC doesn’t have this requirement. But nope! Attestation Clauses: • Also NOT required.) • (c) Witnessed by two people: o Being present at the same time:  Witnessed the signing of the will or  T’s acknowledgement of the signature of the will. Flexible.Wills & Trusts Outline . initials if intended to be signature. or acknowledgment of the will. even if that is after T’s death. o Doesn’t require signature to be at the end. acknowledgment of the signature. o (d) Presence: • No longer requires all witnesses to be present at the same time. alias. • Would think with all these other formalities. we would require dates.Fall 2006 . that is fine. • Signature by nickname.

but did not have physical vision of pen on paper.McCouch • Usually placed immediately below T’s signature and above witnesses signatures. T could see them. they are supposed to be in T’s presence. but couldn’t hear what was going on. • F is standing there all along and wants to sign as 3rd witness – that would have satisfied UPC and CA. and a couple of bank employees inside building are watching. o Unintentionally disinherited spouse. F. J signed will. then sign. put it on the window so T can see.Fall 2006 . Brings it back to car. Intended to impress on him the seriousness of what he’s doing. Don’t want wills being admitted that might be preliminary musings. • (3) Protective Function 46 . Want to be sure it’s the final document. be in same enclosed space. o (2) Evidentiary support  If witness signed will but says that it didn’t happen the way the clause recites. She would have to re-sign after observing (can’t just come back and perceive signature and leave her original one). o Lenient view: Conscious presence test: general observance and awareness is enough. Why have formalities? • (1) Ritual o Want to make sure T knows that it’s a serious document with legal consequences. • T’s instructions to Holmes were to leave part to his wife. T signs it. etc. does “presence” mean they have to see what’s going on. and then E signed as second witness. Courts sometimes bend over backwards to admit wills where there was non-compliance. so L can go through it and ensure compliance Burns v.? o (2) When witnesses sign. Bank President Holmes takes down what T wants in will and has it typed up. • When they signed. in proper form. o The signature wasn’t contested. • (2) Evidentiary Requirement o Requiring writing form that’s easily distinguishable from drafts/other docs prevents confusion. • J’s signature has no legal affect b/c she did not acknowledge T’s signature. In Re Estate of Weber: pg. The sequence of the signing was not in conformity with statute. o The only defense is to get will thrown out. • If T is signing. or throw out wills on technicalities b/c the judge/jury finds something disagreeable. • Serves several useful purposes: o (1) Raises a rebuttable presumption:  The clause. • Can she sign once T has died? o CA statute says nothing about it. • Was the presence requirement met? o (1) Witnesses could see T sign will. raises a presumption that the facts recited actually occurred. then left. 260: Wife of beneficiary. o Court concluded that §6110 requires everyone to sign during T’s lifetime. Adamson: pg. T signed his own name. o Strict view: Line of sight test: required that person have an uninterrupted view of act of signing. o CA: Follows the CONCIOUS PRESENCE TEST. it was the mistake in drafting the will. saw everything. the L can impeach credibility of the witness on cross: “were you lying then or now?” o (3) Cheat Sheet:  Serves as a choreographed set of directions. Other states might take different approach. Probably could find an arguable flaw here to protect wife. Holmes got it wrong and ended up leaving everything to niece. 266: T is ill and has friend drive him to bank. • J signed will before T and then left so she wasn’t present when second witness attested. and part to his niece. Witnesses take the signed document.Wills & Trusts Outline .  The burden of proving the contrary is on those contesting the probate of the will. • Must observe first. and they sign it. reciting all elements of a duly executed will.

just pick out incremental benefits gained by the interested witness. 47 . • Criticism: nothing inherently evil about someone wearing both hats. CA Probate §6112: Remnants of purging statutes. Net Result: In CA. • Execution statutes don’t change rapidly: o L’s who draft wills are happy to comply with signature and attestation requirements. • (c) Unless there are at least TWO other subscribing witnesses to the will who are DISINTERESTED. Purging Statute: • If an attesting witness is also a will beneficiary. not that the witness was scheming. it was denied probate. o Measures whether their share has gone up b/c of act as interested witness. the bright-line (UPC – anyone can be witness. o Result is not to throw out will. He court has to inquire into the grounds and witness bears burden. o Leaves to will contest procedure to decide if there was anything incompetent. • Even if one witness was left $ in the will. • Non-probate alternatives have fewer formalities since they developed outside of probate system. • Other states required the witness forfeit an incremental benefit. CA doesn’t disqualify. if you have witnesses present. Often.McCouch o Guarding against undue influence. o Gives them a sphere of competence they can assert o Formalities themselves are not all that burdensome. o Abolished the interested witness will. T didn’t seem to be out of his mind. To some extent. purging statute – get no benefit) into a case-by-case rebuttable presumption. they can testify that it was voluntary. • A witness-beneficiary was NOT a competent witness. • The formalities are enforced far too rigidly and can be a trap for the weary. just void benefits to witness. • (d) If the presumption applies (not rebutted) the interested witness takes a proportion of the devise that does not exceed the share of estate he’d get if the will were not established. to have a valid will. • Can count the witness for purposes of allowing into probate. o Removes the CL disqualification for disinterested witnesses. and drafter hadn’t thought to ask. etc. fraud. • (2) Will or any provision thereof is NOT invalid because it is signed by an interested witness. T was unaware of legal restrictions. • (a) Starts like UPC – requiring any person generally competent. or UI. UPC §2-505: • (1) Any person generally competent to be a witness may do so.Fall 2006 . o Legislatures don’t have much of an incentive to make it run more smoothly. the fact that the will makes a devise to a subscribing witness creates a PRESUMPTION that the witness procured the devise by duress. must be 3 competent witnesses. duress. o Neither the will nor its provisions are affected when attesting witness is also beneficiary. o No age requirement • (b) A will/provision is not invalid because it is signed by an interested witness. the gift to the witness is VOID. o Presumption does NOT apply where devise to witness is made solely in a fiduciary capacity. Interested Witnesses: CL – under original statute of frauds.Wills & Trusts Outline . Criticisms/Why not change system? • No compelling reason for witnesses except that its part of history. o Result is not throw out will. menace. fraud. o The witness has the burden to show that none of these things happened. but witness loses any benefit. but raises a rebuttable presumption. • Rationale: remove the incentive for a beneficiary to try to get additional benefits by participating.

Hypo: • If T executed a previous will? o Look at terms of earlier wills. so W is already interested beneficiary. o (1) Disclaimer applies at death. so there is nothing left for the disclaimer statute to operate on. he’s advocating an equitable doctrine on contract principles. just get two other disinterested’s. The purging statute will operate before the disclaimer. Their provisions are struck. or o (2) Purging already negated gift. Y) could keep bequests. F. o If there was another bequest to X and Y.Wills & Trusts Outline . and C. • Could they carve up will into separate provisions so there are 2 disinterested W’s to each provision? o Court won’t do it. • Essentially. not execution. the residual also goes to V and her husband F. o Problem: Courts feel constrained by precedent and don’t want to take on the initial burden. • What if there are five nieces and nephews? o Each would take a 1/5 share o Purging statutes do NOT limit taking by intestacy – just purges excess benefit from WILL. with residual to C. the will itself is admissible. • He ends up advocating for a statutory proposal: o Might be easier to persuade legislature to act rather than the courts. and the non-interested beneficiaries (X. in the hopes that he’d share. Can they DISCLAIM their shares under the will? And validate the devise to C? • C would be the only interested witness. o Courts could do this outside w/o legislatures changing statutes. and will goes to intestacy. V and F would be disinterested. Substantial Compliance: Langbein: • If wills are difficult to execute. it can trigger will contests. • Assuming W is NOT successful in rebutting presumption. They are subject to pressure or influence from groups like the probate bar. • Can look at it either way. o If prior will gave him less. Not even one disinterested witness. W takes nothing. what does (d) do? o If that is only will T ever executed. even though not included in certain provisions. this kicks in. o Why don’t we just allow courts to determine whether the formalities have been adequately met? o If court is satisfied. o Look at the whole will. rather than strict compliance. The idea is not to have them do reciprocal back-scratching. and C sign as witnesses. court should be liberal. o If you have an interested witness (or you’re unsure). then NOT a disinterested W. but one way or another the purging statute will operate before disclaimer. o If prior will gave everything to church. and if interested in any of it. • All lose their bequests when admitted to probate. In Re Estates Watts: pg. then heir would take intestate share. • It is a question of timing: o Purging statute – witness becomes interested at time of EXECUTION of will o Disclaimer – treats beneficiary as predeceasing T – at time of DEATH. Hypo: V and F get together and decide to give up bequests to make sure C gets everything. If C is not still alive. and W is an heir. o If W is a beneficiary to any of it.McCouch • Flood of litigation • Still need to worry about who the witnesses are: o Unless there is are TWO other disinterested witnesses.Fall 2006 . even if the strict statute hasn’t been met. She has V. • Substantial compliance approach. • No – this won’t work. and people will look for alternatives. their gift is stricken. 48 . F. The portion struck would be V. 275: T left bequest to V. he might only get that amount.

• Should it be admitted under UPC §2-503 (or something like it?). we can’t be sure whether he reached final position. and then T dies. o Even if undisputable evidence of T’s intent. Never reached “this is final. Said an unsigned document would require a very special set of circumstances. misunderstood how much his kids from 1st marriage loved him. (Matter of Snide.g. Hypo: Will prepared for T while on deathbed. would have signed if alive. and weren’t sure this was T’s final intent. defrauded). o Here there is writing unsigned and not witnessed. o Credible evidence that T approved and accurately reflects his wishes. or wife hated and was planning to file for divorce. Hypo: L prepares mirror wills for husband and wife. • What should L do to prevent this from happening? o Tell T to sign now. o Or sign this. each spouse mistakenly signs the will prepared for the other.  E. thought it was power of attorney. o Look at it as a question of mistake. unless insane delusion. • Arguments both ways: o Bring it in:  Non-material change  Statute just says writing intended as decedent’s last will. Three kinds:  (1) T was mistaken about instrument signing. L takes it back to get it corrected. o If there was wrongdoing (tricked.  He knows what he’s doing. • Has been adopted in a few states.Wills & Trusts Outline . Mistake comes out after husband’s death. There was a typo misspelling beneficiary’s name. • Essentially gives the courts discretion. 246) • Wills were signed.” • Australian court threw the will out. and I’m signing to indicate that. o Writing is necessary for statute and for Langein. o If T’s own mistake.McCouch UPC §2-503: Dispensing Power: codification or refinement of substantial compliance. 49 . and if you live long enough. o Substantial compliance: requires T must have come close to satisfying the statutory requirements (a nearmiss standard) o UPC: a will can be admitted to probate without regard to the statutory requirements if there is clear and convincing evidence that T INTENDED the document to be her will. and have witnesses sign next to the marked changes on the will. knows it’s a will  Not subject to pressure or defrauding  This will is undoubtedly what he wants.  Unsigned will has problems – until he signs it. kinds of mistake where will is thrown out are generally limited to mistake of instrument. and we would never admit a draft. • Allows the probate court to excuse literal compliance with the formal requirements for executing a will. the will would probably be thrown out. pg. misled. just mistake as to which one. o Keep it out  Didn’t sign the corrected first will  Looks like a draft. L prepares will and gets T’s approval.Fall 2006 . o Tells courts to go ahead – they won’t be accused of overriding legislative intent. or  (2) The terms of agreement. I’ll come back and we’ll replace it. At a joint execution. • MUST have a writing. • Dispensing Power: o Commentary lists mirror wills cases as a prime example of using court’s discretion. or  (3) The external events • e. but is largely untested.g. but it was a will.

The mistake doesn’t help to get it in. • Australian Court: should admit to probate b/c of surrounding circumstances. The omission goes unnoticed. The parole evidence rule prohibits courts from stepping in and reforming a will (even though they can for non-testamentary docs). trying to get will IN. they probably won’t throw it out. H signed his but W forgets to sign hers.McCouch • • • •  If doesn’t amount to lack of T capacity. but CANNOT change or add words. but court decided not to apply it. even if certain of T’s intent and the mistake was on part of scrivener. Moving signatures. o Court officially adopts SUBSTANTIAL COMPLIANCE. o SPA no longer valid. • No sinister motive. Snide court: o Approaches as REFORMATION case. o Rationale: will is full and final expression.Wills & Trusts Outline . o Acts were done to reasonably comply w/ statutory requirements. Hypo: Husband and wife write wills by hand and invite neighbors over to witness. o Treats signatures as if singed in the will itself and not on SPA. and not by witnesses. they will probably let it in. In Re Will of Ranney: Self-proving affidavit. Don’t directly address the wills formalities or contest arguments.Fall 2006 . advance document that serves in place of live testimony. just an oversight. • NJ Sup Court: o SPA is technically a separate instrument that serves a different function than will. and accidentally gave it to him. o Some other requirements – like witness signatures – seem to be less crucial. then it might discourage letting in the will • e. After W’s death. o It was so clear what he intended that they can treat the doc as if he had said it was his last will.  If its because of some timing issue. • Self-proving Affidavit: purpose is to avoid dragging live witnesses into probate proceeding. • Dispensing statute seems to say you can dispense with any formalities except WRITING. • Two points: 50 . o Error in supervising execution. Pre-probate. Permit will to enter probate. acceptance might be encouraged. o Treats as if scrivener had prepared the will for her to sign.  If it represents withholding by T. o Langbein: some formalities are more fundamental than others: o T’s own signature usually shouldn’t be dispensed with. it isn’t a doc of his wishes. so he hasn’t had witnesses sign. so W’s will have to give live testimony. • The signatures of witnesses are pretty good evidence that she would’ve signed if she remembered. o Highly controversial – would have been a great case for substantial compliance. can we forgive absence of her signature? o Langbein: this raises a substantial doubt. but attached to affidavit with all signatures. her witnessed but unsigned will is offered to probate: • If just negligent oversight. Two lawyers and 2 secretaries sign affidavit instead of will by accident.g.  Raises less doubts as to T’s wishes. Problem: most courts have traditionally held that you can’t correct a mistake in a will. o Can ignore language included in mistake. Hypo: Will signed but not witnessed: • Some indication that will was final expression of T’s wishes. o Willing to correct mistake of expression. Here. and neighbors both sign as attesting witnesses. Court: granting equitable remedy (reformation). Will is signed by him. o Everything is the same except his name and wife’s were switched. o It doesn’t matter that the language is similar.

Virtually every court would have allowed the signatures without staking the ground on substantial compliance. o The UPC changed SPA – now authorizes will to be executed with single set of signatures that give effect also to SPA. For year of life. and its signed. • NO attesting witnesses.  If can’t tell which will came first. Only need one set for both purposes. but it is highly suggested!! 51 . other cases have allowed the will. o (2) Testamentary Capacity:  If T lacked capacity at any time during which the will might have been executed. Without making a big thing about substantial compliance.g. both are disallowed to extent of inconsistency. and its signed.  T included date.  E.  If you have undated holographic and inconsistent attested will: • Attested will always prevails in the absence of proof. o Valid if the material provisions are in T’s handwriting. o (2) Don’t know how NJ Sup Ct would deal with more difficult case. o Holographic Wills: General: • Wills signed by T. but creates two problems: o (1) Inconsistent wills/provisions:  If any doubt about which provisions of a will or an inconsistent will are controlling. The decision has been superseded by statute.  When NJ considered better case for substantial compliance. so NJ has dispensing authority. but it wasn’t ‘complete. • CALI: Ranney problem is essentially a non-problem.  Unless you show that it was. o Caused problems:  Dated 6/7/06: is that June 7th or July 6th?  People forgot to date (or didn’t know it was required. • Ex: undated holographic will at T’s home.  Can only avoid if you can show holographic was executed after the other will. hotel letterhead o Valid if T’s handwritten words express complete. o Dispensed of the “entirely handwritten” and dates requirements.McCouch (1) Should have been an easy case. the will is invalid unless its established that it was executed when T had capacity. • Traditionally.  Have to prove that it was executed before T lost capacity.’  If will was written on letterhead of hotel.Wills & Trusts Outline . • §6111(b): lack of date doesn’t invalidate. and signed. the ones that are left should be taken more seriously and strictly enforced. dated. • If we don’t know when executed. • The holographic will’s inconsistent provisions will be stricken. it is ineffective and estate will pass by intestacy. the holographic is invalid to the extent of inconsistency. and in T’s own handwriting. coherent testamentary intent. required: entirely handwritten. T was incompetent. o Bottom line: date is not required.Fall 2006 . the will is null. they said by paring down the formalities. is that ENTIRELY handwritten? UPC §2-502: • Holographic will is valid if MATERIAL PORTIONS are in T’s handwriting. CA Probate §6111: • SURPLUSAGE doctrine: o CA courts are willing to disregard printed matter that had nothing to do with will.

o Holographic is much less standardized. o Earmarks of a traditional will. o L’s never advise writing of own wills. o The pre-printed can give context to the handwritten provisions. o He only had one.  For people who don’t know what they are doing.  Allows T to write own wills if they insist on doing it. • §6111(c): any statement of testamentary intent can be set forth either in T’s handwriting or in a commercially printed form will. He intended as a witnessed will – space for four witnesses and a notary. o Is it intended as a will? o Fisher: T says he wants new will drafted to cut out wife’s relatives. and if I don’t…”  Makes it back safe. notary).Fall 2006 . that is misleading:  Must be commercially printed form. o Did the UPC mean that all of the boilerplate is disregarded as surplusage? Then the doc would make little sense b/c no operative language.  Conditional will and condition is unfulfilled. and didn’t say it was attested will botched in execution (only one signature).” • Court: can borrow the intent from pre-printed material and integrate the handwritten parts to fulfill statute. 302: got pre-printed form with boilerplate provisions and inserted blanks.Wills & Trusts Outline . “$20K to Berk. o Often a question if a handwritten doc is a will if it makes testamentary noises of some sort. Instead. o Handwritten provisions would not stand up on their own. o Another problem: “I may not come back from Iraq alive. o He had notary – can’t we treat her as a witness? o Some courts have held that it could serve as second attested witness. and signed by one witness. it minimizes formalities. Has it notarized. • (2) Testamentary intent o Formal will almost always recites that it’s a will and makes a disposition of property. • Issue: what does “material provision” mean? o Blanks were filled in by hand. etc. Two Points: • (1) CA presumably allows someone to make holographic will if he signed the pre-printed form. and AZ courts not ready to say you can dispense of witnesses.  Own form filled in and signed does not qualify. o Make that argument! There is good authority to support. • Arizona court says that its supposed to be an attested will. o Gives people incentive to do it.  Intent is clear. In Re Estate of Muder: pg. o Willing to overlook other people’s handwriting (witness.  They thought it was more like an instructive letter. CA/UPC: amended statutes to permit taking into account non-handwritten provisions to determine T’s intent. o If T has heard you can prepare will and write out provisions. o Even if no attempt to comply with statutes. • Can consider other language as long as not crucial or operative. and that requires two witnesses. problem is that it was done in anticipation of having will drawn. they stretch the terms of statute to allow it in as meeting requirements for hand-written will. Do provisions take effect? 52 . o Several other similar cases that generally come to same result. and years later letter is found.McCouch *Florida* does not permit holographic wills – even if they are from a state that permits them. He wrote in names and disposition. and signed by T. and signs. o Slew of cases of handwritten notes that say rudimentary things and we can’t tell if it’s a memo or intended will.

• Wasn’t intended to limit the application of terms to the strict meeting of condition • Just reflected the immediate occasion. extraneous dos.  E. o Doctrine concerns this question: what sheets were present at the will’s execution? • Every will on its face is presumed to be a complete statement of the T’s intended disposition. • Re-publication: when a codicil is executed.  Lots of situations where stray pages are missing or substituted with technical corrections. the terms must be in WRITING. alteration. o Any addition. re-executed document. there is at least doubt as to whether that part of the will has been expelled. associate fixes typo and then re-inserts into the will. o Must be executed with the same formalities required for execution of a will. or appear on the same piece of paper as the will it amends. unless the will is REEXECUTED with proper FORMALITIES. • Essentially a subsequent will intended to be read together with.g. or the changes qualify as a valid holographic codicil. the doc can’t be intended as part of the will.Fall 2006 . the presumption is that the codicil is to be read together with original will as part of single. CA: will should be admitted or rejected in CONFORMITY with condition (not sure what the means – McCouch doesn’t either. • To be part of the integrated document. and visa versa. and form a part. that alters.McCouch o Courts take flexible attitude: • Holmes: the language of the condition was not meant to be taken literally. and: o (1) Must be physically present:  If its in a different place or yet to be printed. o Hope there is a single. o Not always clear whether subsequent instrument is intended to replace the earlier one. o Does not have to be same form as will o Can have a holographic codicil to a type-written will. o (2) Must be Intended  Pages from prior drafts. o Likely to be various drafts. of the original will. o It can be a separate document. Might be to codify CL and CL rule was lenient). modifies. (2) Re-Publication: (codicil) • Codicil: testamentary instrument executed after the execution of a will. entire will validated by a single action of execution o All pages/other writings intended to be part of will must be present at time the will is executed. etc.Wills & Trusts Outline . interlineation.  The Documents of the Written Will: Four Doctrines: • (1) Integration • (2) Re-Publication • (3) Acts and Events of Independent Significance • (4) Incorporation by Reference (1) Integration: • Process of embodying several sheets/docs into single. and his incentive. deletion made after the will has been signed and attested is ineffective to change the will.  In practice. or expands the provisions of the will in some manner. most will take precautions so there is no doubt: • Attestation clause will include number of pages • Initial each page • Number each page • Pages physically attached to one another. final execution draft which is the one signed and witnessed. 53 . If that page has been removed.

“All books in my library.g. Hypo: “Cash in drawer to people whose names are on envelopes. o E. o Statute warns against allowing complete end-run around the will by leaving too many blanks. o E. Hypo: Original will signed by T and 2 interested witnesses.g. • Rationale: challenges like “not all the books were specified w/in 4 corners of document” won’t work.McCouch The execution of a codicil “republishes” the will itself. • Subsequent codicil. under republication.” • The only reason for having names on envelopes is to have an effect on disposition of will. • The will is validly executed and T does unrelated codicil.Wills & Trusts Outline . • Whether or not the codicil provided or related to child or had nothing to do with it. “I leave my furniture to X” or “I leave $1K to each of my servants employed at my death. so that the will is deemed to have been re-dated and re-executed as of the date of the codicil. “I leave all property in accordance to my known wishes. legally affected act.g.” • Contents can be changed freely. • All that’s necessary is plausible non-testamentary purpose. Hypo: “I leave all contents in safe deposit box to X.000 to each person employed at my business at the time of my death. re-publication deems the original provisions to be merged as part of single. • All of the taints are purged if subsequent codicils are attested by disinterested witnesses. Hypo: “I leave $1.Fall 2006 .” • That is okay – can change cash freely. o Puts a limit on the acts/events that you can look outside of the will in order to give meaning. not to designate the beneficiaries in a will. e. o Totally open-ended delegations are not enforceable. o Dividing line is events that have independent significance in giving meaning to will. physically change amount. Might be using box as will substitute. This would not be okay unless you had another reason for named envelopes. • If the witnesses to that codicil are disinterested.” o T’s act of hiring or firing servants or decorating living room has a lifetime purpose or motive independent from its effect on his will. only one time when the will is actually executed.g. o Hypo: CA: T’s child born after execution of all testamentary instruments is entitled to an intestate share. • If will originally executed in ’90 and child is born in ’95. o The time of the most recent codicil. o Can make a class that lets in other people or other property that changes over time. o Not limited to identifiable number when executed. • The event of employment has “independent significance” from its effect on disposition. o Deemed re-execution of original will. o E.” 54 . the codicil will be deemed to be a re-execution of the original will • Any child that comes into existence before codicil is out of the intestate share. UPC §1512 • T refers in will to extrinsic acts/events that have some independent significance for the purpose of designating beneficiaries or designating property that is the subject of the gift. (3) Acts and Events of Independent Significance: CA §6131.” o Does he mean library as in the room in his house.” • TEST: Does the extrinsic act/event have legal significance apart from/independent of the will? o The act or event must be one that ordinarily has some non-testamentary motive or function. storing valuables Hypo: “all cash in drawer to X. Hypo: Revocable Trust: “$100K to A. • In theory.” • This is valid because the act of hiring or firing employees is normally done to enhance the business of T. • Simply a matter of when last instrument was executed.” Will: “All to trustee of revocable trust. or library as in his entire collection of books? • Allows the executor and beneficiaries to look OUTSIDE the will to extrinsic acts and events to give meaning to the terms of the will.

• If we decide its integrated (entire writing present at the time he signs). Later that year. • (2) Incorporate by reference to validate a prior INVALID will o Incorporation by reference allows T to validate earlier instrument that is ineffective b/c NOT validly executed by incorporating it into the subsequently executed codicil. but incorporated by reference. o Not republication b/c must have a properly executed will in order to republish.Fall 2006 . she made changes to will.  Creates fiduciary relationship between whoever is trustee and the beneficiaries. o Could be codicil – nothing says can’t write codicil on last page.Wills & Trusts Outline . • Avoids disclosing anything about ultimate beneficiary b/c will passes through probate and to trustee. it’s a valid holographic will and the rest will be excluded. o Trust has significance outside of testamentary purposes:  Lifetime gifts  Arrangements for administration of property if you fall ill or disabled. and in most other states. (4) Incorporation by Reference: • A duly executed will may. • “Pour-over” arrangement: • Trust is already in existence as an inter-vivos trust. o Revocable trust is serving to specify the ultimate disposition of probate assets. by appropriate reference. incorporate the terms of an extrinsic document or writing.McCouch • Combines compliance with will formalities with flexibility of will substitute. **Note** DO NOT CONFUSE: codicil as validation of an earlier will or for republication: • (1) Republish a prior VALID will. 55 . and properly executed it w/ codicil that expressly includes all terms of the previous will. Hypo: Typewritten will that is not signed or attested. • One requirement: for independent significance. • By saying “this will is complete” we infer the hand-written part was to be read with the rest of it. this will is complete. o (4) Must be in writing • Holographic Will: Can you incorporate a non-handwritten document into a holographic will? o In CA – yes. then under the surplusage doctrine. o Trust instrument not a public doc. o Ex: T signed will and had one witness.  Change in legal relationship between settler and trust property. She did not know she needed 2. which means its not subject to probate supervisions.” • Incorporation by reference is the cleanest way to show these docs can be read together o NY is the exception – doesn’t recognize IBR. invalid “will. even though the other document was not properly executed and is not of testamentary character. • Requirements: o (1) Document must be in existence at the time will was executed o (2) Will must identify and describe document so clearly that there can be no mistake as to identity of document referred to.” T then signs the document. o Hope that is enough for court to see it not as integrated. The codicil incorporates by reference the terms of the earlier. • CA Probate §6130: 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. o Anyone that wants to find what came of T’s property will find it went to revocable trust. or o Republication by codicil: only if earlier instrument was VALIDLY executed. o (3) Will must show intent to incorporate the terms of extrinsic doc as part of the will. there must be fund property in trust. • Doctrine useful to give effect to earlier instrument that would be ineffective b/c not validly executed. T writes on bottom in hand “give $10 to my X.

and he is to be in charge of disposing of property as set forth in memo “according to her known wishes. • NOT a candidate for acts of independent significance o Has no other non-testamentary significance. • Except for the accidental occurrence of codicils.Fall 2006 . but goes beyond by saying: o The devise is not invalid because the trust is amendable. • Stumbling block: o “memo” is ambiguous. She lists property and her beneficiaries and then says any leftover goes to her nephew. o Ex: C creates a revocable trust and later executes a will devising her residuary estate “to the First Bank trustee of the trust that I executed. the court would not have been able to give effect to subsequent lists. Greenhalge: pg 321: T wants to make disposition of personal property. it will. • Notebook: o Not part of integrated doc and is subsequent to will o However. • People wanted the best of both worlds – to avoid having to amend the will every time they change the trust. the notebook is no longer a subsequently executed document. o But the trust must be funded – have to have assets in it. there are foreseeable problems. 56 . provided the trust is: o (1) Identified in the will o (2) Terms set forth in a written instrument (other than will) o (3) Executed before or concurrently with the execution of the will.” In a separate notebook (1979) and in her own writing there are additional notations of beneficiaries and specific tangible items. If court can give effect to instructions in notebook. revocable. o Mass Court says it can.Wills & Trusts Outline . o §6300 combines the desirable parts of both by saying you can incorporate and amend freely even though it has no property and no independent non-testamentary significance. or because trust was executed after the will or after the death of the T. so they’ll allow it.” • The objective is to provide a single. o Doesn’t matter whether funded or not. • If trust has other non-testamentary significance o It has uses other than as a pour-over will. • There is only one will (one integrated document). Will executed in ‘77 and two codicils in ‘80. unified trust management and disposition of: o (a) Assets transferred to the trust during life.McCouch Clark v. o Trust can be amended or revoked even after will is executed. • Sounds like incorporation by reference. Ways to conceptualize: • If will refers to the trust and trust already exists. She intended for both to be given effect. and o (b) Assets owned by T at death. none of those changes are properly incorporated into will. Pour-Over Trusts: • A “pour-over” gift is a testamentary gift to a trust created during the decedent’s lifetime. o Court knows what she wanted to do. or both. CA Probate §6300: Uniform Testamentary Addition to Trusts Act: • A will may validly pour over property to the trustee of a trust. T can incorporate by reference. when she made codicils and re-published will. o It’s not a great solution. • The testamentary assets to be administered and distributed as part of that trust. o If T wants to make changes to trust. but also wanted to avoid having independent property in the trust. but doesn’t want to do so in a will. If any subsequent markings are after execution. She makes a separate memo to incorporate into a will. so it can be incorporated by reference. then any amendment T makes to trust is valid. o Doesn’t have to go back and change will each time he changes trust. Can it refer to two separate writings? o Statute requires sufficient identification.

Clymer v. If one dies. • (3) Spouses in marriage o Mutual dispositions of assets o Save estate planning fees by having lawyer draft a joint will or prepare separate mirror wills. there is a provision for kids/spouse in will to extend the property settlement past his death. 57 . Will Contracts: Contract Law Controls: • An alleged promise to make a testamentary gift is governed by contract law rather than the law of wills. Clara died in 1981. what are the terms of the contract and what do they provide  What did the K consist of if the mind’s did meet? o (3) What remedies are available for breach?  Damages • Value of property promise  Constructive trust • Operates like specific performance • Gives the promisee the very property contracted for. • If contracted party and T’s wishes conflict in the agreement? o (1) Is there an enforceable contract?  Offer  Acceptance  Consideration  Capacity o (2) If there was an agreement. 328: Issue – concerned the testator’s implied intent. Under the will the bulk of her estate was to pour over into the trust. • Court: In the absence of an expressed contrary intent. Joint Wills: • Two or more people executed a single testamentary instrument. but will pay w/ property out of will. In 1973 Clara Mayo executed a will and a revocable trust. the statute also applies to these circumstances. o Note: problem with pour-overs – if the will and trust are as closely aligned as they seem to be.” • (2) Agreement in contemplation of marriage/divorce o One spouse agrees to marry the other in return for compensation o Spouses divorcing.Wills & Trusts Outline . • Funded pour-over will take care of incidental assets at death. Statute that revokes any disposition to a former spouse made by a will apply to revoke dispositions to the former spouse made by a revocable inter vivos trust that has no funding or practical significance until the decedent’s death.McCouch Widely Used: • Allows for confidentiality • Changes require less formalities than changing a will • Allows T to avoid probate to the extent that the trust is funded during lifetime. Recurring Fact Patterns: • (1) Contract for health care services: o T concerned with providing for his healthcare agrees to pay someone at death for their services. to what extent do the wills rules apply to the property that pours into the trust? o Here the court said that statute controlling will also control the trust. • Does Mass. Mayo: pg. o Happens often with kids “mom said she’d leave me property in will if I took care of her.Fall 2006 . They divorced in 1978. of which James Mayo (husband) was the principal beneficiary. Assumption that there isn’t property immediately available.

• (3) Once court finds agreement – what restrictions did the agreement impose? o W survives for fair amount of time. and property changed in value. Want to figure out what the spouses intended. restrictions on disposition at death. • Holding: if joint will creates binding contract.  The property could gain value. the courts says wills K are a little different than mainstream K law. but she did with codicil. • (2) What is the state of affairs at k law? o Is it binding o Has it been breached o What are available remedies? • There was k. o Court looks to the use of the plural words. there is no enforceable contract. can’t undo agreement. o Will sue for damages (wife is dead) or specific performance/constructive trust. o Not questioning validity of codicil – their claim is for relief on contract law. etc. o At first spouses death. o H and W did intend to impose a binding restriction. • Bad drafting. 58 . o W was not trying to change the basic schemes.McCouch Wiggins: Husband dies first. the first contract is enforceable and entitled to remedies. it is difficult to account for changes in circumstances. Usually is enforceable with the exchange of promises. Dealing with 2 separate bodies of law: • (1) What is the state of the testamentary documents in probate law? o She executed a codicil adjusting amounts of the bequests to take account of new beneficiaries. • Joint will never on face makes clear that it’s a joint will and that it governs both of them and their assets. can’t change terms after death.Wills & Trusts Outline . o Both instruments admissible to probate. Only enforceable at one spouses death. • (2) Was there a binding k? o All it says is that the will is intending to dispose of their joint assets. but as a matter of contract law – the initial beneficiaries have an action for remedy against wife’s estate. Mirror Wills: • Separate wills of two or more people that contain reciprocal provisions.Fall 2006 . o This is different from most K’s. o Claim against estate or right to specific performance. • They are successful.  She might re-marry and new H might acquire rights which bear modify likely intent. and the value of the combined property appreciates substantially over her life. • Court – did the joint will intend that both parties be bound? • The court infers that they intended it to be binding and contractual. o Once you die. believe the k is in effect. o Seeking standard contract remedies. it becomes enforceable at one spouses death. o She was bound not to make changes. • The beneficiaries under joint will are claiming the same status that any creditor would. and now a codicil technically admissible to probate. it becomes irrevocable upon death of first T. property goes to surviving spouse. o If it’s a contract. o Because wills are freely amendatory while living. o Problem with binding k disposition. o Go after the property and compel the executor to distribute by the terms of the contract. she just wanted to increase some of the bequests to beneficiaries b/c now they had more value in property. o Trying to update for changed circumstances. • (1) As long as both spouses are alive and competent. As a matter of contract law.  Most people will not foresee all possible changes.

o She makes new will and leaves everything to own kids. it was intended not to be subject to revocation. isn’t enough. but contracting like at arm’s length. even if bolstered by confidential relationship. • Is there an enforceable k? o Never executed any written agreement. probably would have enforced in equity. • Problem: spouses in confidential relationship. o In absence of specific agreement. o Wills are always ambulatory and can be amended freely. • Like UPC (1-3).  Sends you back through existing case law to find out what is enforceable in equity. o Should have reached an agreement more like arm’s length k. Each of them in their respective wills made identical bequests to his kids. no enforceable agreement. if: o (4) Clear and convincing evidence of an agreement between the decedent and the claimant or a promise by the decedent to the claimant that is enforceable in equity. o After T’s death: 59 . o (2) Expressed reference in will or other instrument to contract and extrinsic evidence proving the terms of the contract. o (1) Provisions of a will or other instrument stating the material provisions of the contract. Armstrong: When wills drafted. o Mere implicit understanding. they can have an enforceable contract not to revoke. • Easiest place to ensure contract is complied with is by putting terms on face of the will. courts of equity have felt free to get around it. or clear and convincing evidence of intent. and wife agreed.Fall 2006 . Bottom Line: • If entering into a will contract. Just executing them at the same time is not sufficient. husband leaving bulk to his kids during previous marriage. husband expected his wife would leave both wills in effect. wife inherits. • Husband dies. then allows will contract to be enforced even if NO WRITING. • Solution: should have made the will contract irrevocable.McCouch Oursler v. CA Probate §21700: • If meet standard equitable requirements. o But they understood that this was part of a coordinated arrangement. o But if spouses want to adhere to a contract. He is free to change his own will too. • Allows enforcing of contract with written evidence. but NO EXPRESS agreement. o Imposes remedies for breach. • MUST be in writing to show that when the will was done. • Is there a contract? o Court acknowledges relationship. o Had their been an express agreement. o Court lays out bright-line: must be express agreement (written or oral). • Will contracts become enforceable and binding at the death of first party: o During T’s lifetime:  No remedy is available if T revokes before death because other party has not suffered any loss. put it in writing. UPC requires some WRITING. o (1)Terms of contract set forth in the will. wife understood that was husband’s expectation. o (5): C&C of agreement or promise between decedent and other person for the benefit of the claimant if enforceable in equity. UPC Approach: • In order to enforce any contract concerning a T disposition.Wills & Trusts Outline . o Didn’t recite on wills that it was a contractual agreement. o (2) Writing signed by decedent evidencing contract o (3) Reference in will to another instrument that sets for the contract. o (3) Writing signed by decedent evidencing the contract. and decides her kids should be beneficiaries of combined estate.

o She is happy to take what comes to her through the will. he could have revoked will and she couldn’t do anything about it. if the estate or beneficiaries would be unjustly enriched by not paying her for services she’s performed. she is willing to say that it was breached. Constructive trust: beneficiaries under new will hold a constructive trust for the benefit of the contract beneficiaries. o They actually wrote it into the statute to deal with these questions of oral will contracts. • Other states – open question. It is basically dead – no one is a party to the k. it remains. Before CA had these statutes. o On exam. N does it. but he left a will which conforms with contract and leaves everything to her. run through intestate share about omitted kids to see if he would get anything.Wills & Trusts Outline . they meant to make it bright-line. He says he will leave her all his property by will. o Trustee is charged with the disposition of property. If she performed by contract can’t be enforced for some reason. the courts have used this rationale for centuries for getting around statute of frauds. can she get equitable remedy? o To enforce through specific performance. Beneficiaries have remedy in contract law. o Ex: married clients with joint plan – is there an alternative arrangement you would recommend? • Some sort of trust: trust comes into force the moment it’s funded with property. o She’s not trying to enforce. she would be entitled to at least the value of her services. they were reading UPC flexibly. Revocations of Wills: 60 . o He never did. Sam probably has no claim. She takes care of him for a month and decides she cant take it. o If you can show promises and that she relied on those promises. o Unless writing. HANDOUT: Hypo: T is dying and asks niece N on telephone to come take care of her. o They would be enforceable in equity. • CA – think legislature would tolerate same kinds of equitable remedies. • UPC – If found no enforceable k. Closing comments: • Will contracts are hard to draft.McCouch    If surviving party revokes will and executes a new one. o Does that broken promise make the will unenforceable? o Should N be put under penalty b/c she made a promise that she was released from? Either as a matter of k law or of wills law? • No matter his motivation. o Once k went away. and hires someone else to look after him. Hypo: T performs – executes will that conforms with his promise. • If statute said you needed writing.Fall 2006 . Does she still get the terms of will? • Will itself – probably admissible to probate. He says okay. Now she never performed. the new will is admissible to probate notwithstanding breach of contract. (some courts divided). don’t account for changing circumstances etc.by not putting in express exceptions for equitable doctrines. Assuming that estate enters probate with no problem. How should T’s estate be distributed? • T’s sole heir is Sam. Will still remains in effect without any formal or substantive defect. o Some . • Contract claim: no one else is a party to contract. rather than to what she just provided. o But since he didn’t. she ought to get value of performance back. after N left he had an opportunity to change it if he wanted to. • Can the Church attack the will? T made will based on promise and the promise was then dead. you are out of luck. N will probably walk off with entire estate. o Quantum Meruit. o Trustee’s can distribute according to intent. Testamentary instrument found after T’s death is will executed years before which leaves all T’s property to a Church.

o If courted treated it as separate testamentary instruments:  The doc talking about the $50K would have no operative effect. rest to other siblings. o Must comply with all will formalities. o Even T who has validly contracted not to revoke his will may do so o Although he may be subject to remedy such as constructive trust for breach contract law. but subsequent instrument MUST be testamentary • Written instruments are favored. we have to figure out what to do with them. • The revoking instrument need not be dispositive: o It can do nothing more than revoke an earlier will.” o “$20K to Jim and Marg. o The words themselves must accomplish the revocation. o Subsequent will is construed to supplement the prior will to extent not wholly inconsistent. all executed with testamentary formalities. and intended to revoke all or part of earlier will. Basic will executed is formal (signed and attested) leaving $50K to J and M.  That disposition is completely inconsistent with what was done in original will. • Revocation of will may occur in three ways: o (1) By subsequent testamentary instrument o (2) By physical Act o (3) By operation of law • CA Probate §6120 (UPC §2-507): Will can be revoked by subsequent written act or physical act. Gilbert: pg. • The T’s words must show a present intent to revoke.McCouch General: • T always has the power to revoke his will at any time. o Note: a residuary requires in prior instrument is not revoked by a specific bequest in subsequent will. o For the same reasons we want a will to be in writing. 61 . o In instruction to another. Implied Revocation by Inconsistency: • If a subsequent testamentary instrument does not expressly revoke an earlier will. • Court: kept will as original doc then read $50K doc as an additional claim.  The $20K – “the REST” to my other siblings  J and M would get the first $20K. o Where the provisions of the two are inconsistent. All three docs are found together at his death. • The revocation may be express or implied. o An express revocation clause is highly referred.Wills & Trusts Outline .  It revokes by inconsistency the entire first will. 345: Three separate pieces of paper.Fall 2006 .. although the size of residuary may be reduced. and the rest of the property would be the entire estate. o A single document is preferred to sequence of codicils. • The second instrument revokes the first only to the extent that its provisions are inconsistent with first will. Gilbert v. • Partial Inconsistency: o Court reads both together to determine T’s intent. he makes two other testamentary handwritten docs. (1) Revocation by Subsequent Instrument: • A will may be revoked in whole or in part by a subsequent will or codicil. • Both have indicia of testamentary intent: o “$50K in safe deposit box. A couple of years later.” • If he expressly revoked an earlier will. and the second instrument is treated as a codicil. the subsequent instrument controls. both instruments are admitted to probate. we want subsequent changes to be formal. • Since there was no express revocation. “please destroy my will” is insufficient. Can revoke by holograph or type-written. it is valid.

• CA: Courts routinely hold that these changes are VALID. or $10? • CA §6120: Subsequent will revokes prior will or part expressly or by inconsistently. • Reasoning: holographic will can be written over period of time. does B take $20. $30. $20K to B. o More likely: T will just cross out name and write in new name. • Suggests that in attacking wills and codicils. and we can figure out the net effect of all changes. o By implication. If it said “I leave $30K to B” that would enforceable. identify it as a codicil and which will it should relate to. o Nothing in statute that requires it meet final form when he signs it. HANDOUT: 1. what provisions revoking. • §6110. and the rest of her property to C.  Ex: crossing out $10K and putting $30K would not qualify. One year later T executes a holographic will that gives $10K to B. o As long as all material provisions still handwritten. o No operative language to imply testamentary intent. so it is treated as a codicil. o If not complete disposition. and rest of $50K to siblings).McCouch o It says nothing about revoking the prior will. every change re-adopts the original signature. while leaving all provisions of formal attested will. and which provisions its meant to supplant.Wills & Trusts Outline . the original will is…” Holographic Changes: • A holographic instrument may revoke a type-written. If signed at beginning. At T’s death. but IN ADDITION. o Giving directions for $50K in SD. o CA statute allows such notations on printed commercial forms. • Problem: T won’t know formalities. Or new amount. signature appears. Give legal effect to both of hand-written pages as integrated codicil. T could continue to make changes. 62 . Are changes valid? o Wouldn’t be if original was attested will and amendments were holographic. unlikely to make complete. o He could hand-write changes on face of will. o Rationale: he had done the elaborate attested will 2 yrs before. always be aware of original scheme. • In order to treat the reference of the “rest” as the rest of the $50K.Fall 2006 . attested will. §6111: Subsequent instrument must comply w/ testamentary formalities: o The subsequent will or codicil must either be:  (1) Attested. coherent statement of testamentary intent. o And close with final remark “except to the provisions of this codicil. o If want to use a codicil. the court has to treat the other docs as part of a single holographic codicil because it modifies the preceding will without obliterating it. then presumed NOT to be replacements of earlier bequests. It would be odd that he casually eliminated all careful dispositions by hand-written sentences without any real function. or  (2) Qualify under holographic formalities • T’s handwriting • Signature • Complete statement of intent Will Holographic in First Place: • Ex: T makes changes in writing and never bothers to re-sign. o $50K in safe deposit box (of which $20K would go to J and M. Presumption is not to revoke unless inconsistent. o That does NOT VALIDATE it as a holographic codicil. o How do we make sensible distribution? o Revocation by inconsistency. o Figure out how provisions of subsequent documents compare to the existing will.) T executes an attested will that gives a diamond ring to A.

o If we aren’t sure it’s the last thing T wrote. o Inking out or erasing over the text intended to be revoked. o Meant to reflect what courts seem to be doing. Hypo: existing will executed w/ formalities. • Tearing: Generally sufficient to revoke if it is a material part. • If she wrote on the will in a blank space. In own handwriting at bottom T writes “cancelled” w/ intent to revoke. o Merely singing edges is insufficient. Easiest cases involve destroying entire will rather than part. torn. it is presumed that T destroyed the will with intent to revoke. o To the extent of inconsistency. o Cannot look at the meaning of written word in order to determine relevance of physical act. o Must be on the words of the will. • In order to have valid revocation.Fall 2006 . • She is presumed to re-adopt. there is potential problem. o It would be reduced by $10K to make way for new bequest to D. Holographic will: • She could strike out some words and amend them. • Not recommended – many ambiguities. o Explicitly disposes of entire first estate. Types of Physical Acts: • Burning: Revoked if a material portion of the will’s language is burned by T. Hypo: Type-written. • This is closest to canceling o Inking out or erasing the text trying to cancel (e. this indicates T did not intend to revoke entire will. is that valid? • No. drawing lines through it). o If only one of the will’s several pages is torn. that is NOT good enough. o The word cancellation in the margin has no more legal effect than reciting it has been burned. • What if $10K to B and residuary to D? o There is no way to read that will without completely affecting disposition of first will.) That is not intent to revoke. has to be while T is physically present.” o If instruments are explicitly/entirely inconsistent. problem of inconsistent holographic instruments. She calls paralegal and says “please get my will and destroy it. • Obliterating or canceling: generally requires damage to a material part of the will. cancelled.” Paralegal does it. 63 .g. B would get $30K. Original will in safekeeping with T’s lawyer.Wills & Trusts Outline . not subtracted from. tore wrong doc. • Would it make any difference if the $10K were left to D? o D would get $10K that would come out of C’s residuary share. (2) Revocation by Physical Act: • CA Probate §6120: A will may be revoked by being burned. obliterated or destroyed w/ the INTENT and for the purpose of revoking by either T or someone in T’s presence and at T’s direction. writes text indicating intent to revoke. then second will serves as revocation of first.McCouch • Probably added to B’s estate. and neither the will nor a duplicate original can be found. • UPC: “The subsequent will is presumed to replace the earlier will if it makes a complete disposition of estate. • Must be done with intent to revoke: o Any could also be by accident (house fire. Will Can’t be Found: • CA Probate §6124: If will last seen in T’s possession. neither can be given effect. • Problem becomes one of timing: o If T marks up successive times. o Courts are liberal in evidence they allow to show intent. etc. properly executed. has to be one of physical acts in statute.

T decided to revoke the will. o All duplicates are also destroyed. its effective to all the wills sitting out there. no valid act of revocation. presumption is T revoked • (2) What about second duplicate not revoked? o When you tear up one piece of paper (original will) you have revoked the legal instrument.  If she died. or is duplicate original will still valid? • (1) Presumption of lost.McCouch • Rebuttable presumption: o Can show the reason its not there was something other than deliberate revocation. o Doesn’t matter if there are duplicates sitting out there. o It becomes a battle of extrinsic evidence. she probably believed that any of them could be admitted to probate if one goes missing. just like if lines through will. o If T misguided enough to execute duplicates. burned. o If enough evidence (any evidence) sufficient to persuade fact finder that T destroyed the will. • (3) Neither the will nor a duplicate original can be found at T’s death. then the presumption is limited o It might have been destroyed during incompetence. called lawyer and asked him to revoke for her. • Executing duplicate wills is not very effective as a safeguard. Did she die intestate. He tore up and told her will was revoked. • T’s that think they are making sure there will be a valid will at death by executing several is being misled. but when its lost at her death. o Unless other evidence T did it by accident or someone else tore and lost it. • If evidence demonstrates that the original will was revoked. So would 6124 call for a different result? • CA Probate 6121: A will executed in duplicate or any part thereof is revoked if one of the duplicates is destroyed. Destroying the original invalidates all. o When lawyer tore up. CA Probate: §6124: A will that can’t be found at T’s death is presumed to be revoked. o Once T revokes any original copy.Fall 2006 . Left one with lawyer and other to primary beneficiary for safekeeping. if • (1) Will was last in T’s possession • (2) T was competent until death o If will was in possession but she was out of it.) o It wasn’t revoked by tearing. o The presumption in 6124 does not apply. we presume it was done with intent to revoke. but the pieces can’t be found at death. including the untouched duplicate. and her will was found in her possession w/ cover letter. etc. Bird duplicate CAN be found.Wills & Trusts Outline . Handout: 64 . • We don’t get to 6121 unless we think that original was revoked. • If two copies of a will are executed. In Harrison v. what would happen?  She did not perform act of tearing. o Not going to overthrow valid will based on mere presumption. Had existing will with a duplicate. He sends torn will back to her. it invokes the presumption. destruction by T of an executed duplicate in his possession revokes the will. canceled etc. then 6121 would apply and she dies intestate. so its still unrevoked unless she does some other action (tearing herself. Reconciling the two statutes: • Bird had a duplicate original that can be found. it was not revoked? o Designed to give relief to T’s who didn’t realize what he was doing w/ wills in duplicate. Harrison v Bird (pg 349): General CL. then 6121. then wrote cover letter about what he did. mutilated or missing will – how does it apply? o If lost or missing. • Why does 6124 presume that if there is a duplicate.

Compared to CL entire revocation. • If she didn’t intend to revoke – A keeps the $10K. just provisions for former spouse. A can still take $10K by saying no valid revocation b/c not what she intended.) Leaves $10K to A. have to execute a new one. both the beneficial provisions leaving spouse property. Some states use CL law still. T’s after-married spouse gets an intestate share in limited circumstances. and nominations naming spouse as executor/trustee are revoked.  Doesn’t deem entire existing will revoked. Can A salvage the $10K? • If she intended to revoke only in event that she could substitute larger request.No provision for divorce o Even if T executes will during marriage. either • Look for extrinsic circumstances to see what she would have preferred if she would have known. • Despite T’s lack of affirmative action. complete statement of intent. then divorces from spouse and dies unmarried. o This does not qualify as a codicil.  Property passes as if former spouse failed to survive T. At T’s death. • Modern -. and the rest to B. (3) By Operation of Law: • Revocation of will or portion may result from change in family circumstances of T. o No signature or testamentary context.  More aligned with T’s likely intentions. the law presumes an intent to revoke Marriage • CL o o o o • Modern o o Marriage followed by birth of issue revoked a man’s will Marriage alone revoked a woman’s will. • NOT giving effect to the writing as any kind of codicil b/c not following formalities. if after executing a will T’s marriage is divorced or annulled. UPC: Revocation by Divorce o Unless the will expressly provides otherwise. signature. • Presumption is she is the one that drew line.CA §6122. • There is no presumption either way – courts will look at what they think she most wanted. • Even if she didn’t write anything above it in own writing. • But she didn’t intend him to take nothing.Fall 2006 . the line itself is a valid revocation. What difference does it make if the handwritten amount is $50K? • In order to amend the will. How should the estate be distributed? • The line-drawing is a cancellation of A’s bequest. Divorce: • CL -. o Not consistent with most T’s intent. the will is found in her desk with a line drawn through the amount $10K and the word “nothing” written above in T’s handwriting. • Any way that A can get $50K? o Only if holographic amendment – T’s handwriting. Presumes that will didn’t provide for subsequent spouse and T wants to provide for them.Wills & Trusts Outline . 65 .McCouch 2. She did not do that. What if she wrote in 1K? • Reducing request but not revoking entirely. the provisions in will that are in favor former spouse survive. then she didn’t really intend to revoke.

While married.Wills & Trusts Outline . o These docs were to be taken in tandem.McCouch o If aware client entering divorce proceedings. • Can they bring trust into will by saying she never amended the trust after original execution. • Court leaves a lot of unanswered questions: o What if trust not solely funded at death?  She put property into it so that it had independent. Revocable. o But she didn’t choose to incorporate by reference. Then got divorced. so apply same rule of revocation. • Trust completely unfunded until death. might want to try a some waive/settlement agreement to override existing wills.: it would not be sensible to treat trust as if outside of revocation by divorce statute. with remainder to University. funded in whole or part from other sources?  Insurance – makes payable to trustee to be held and administered as part of trust 66 . o Property has already gone under the will and through probate. • Mass. • Big change. (2) family trust (portion potentially taxable). Mayo: pg. • Trust was standard arrangement: (1) marital trust (portion of decedent’s estate passes free of estate tax). probably worth reviewing existing provisions. • Husband trying to claim benefits under trust which was funded entirely by will at her death.  Between time spouse files for divorce and its finalizing: • A lot can take place. T left income to husband for life. *Note* CA/original UPC refer to provisions in the will. • When she divorced she didn’t change her estate planning docs. think of two issues:  If divorce becomes final: • Advise to make new will. o Don’t announce they are re-writing statute. 362: Raises conceptual question about relationship between will and pour-over trust. but saying that on facts of this case the statute reaches beyond just the will. o Revocation by divorce statute – provisions for husband are revoked. • Might not want to wait until divorce is final to do some updating. o Claiming statute is only for will. o But the trust is technically a separate document. which doesn’t reach the trust. and provided income to nieces and nephews as long as under age 30.Fall 2006 . o This is a generally valid pour-over. Clymer v. Revocable trusts & pour-over as appendages to will. The trust is subject to will – that’s all it is funded with. o Not leap of logic to say the probate statute should follow the property even when it lands in another vehicle and disposed of in another instrument. • CL Approach: o Court wants to delete LE to husband b/c that is what T wanted and legislature probably intended. MA court takes this seriously. o All that money goes to family trust. No longer requires independent non-T significance. he is not her husband anymore. • Draft a new will immediately • If proceedings are amicable. non-testamentary significance? o What if will left residuary estate to beneficiary named in life insurance policy (instead of trust)  A totally different type of vehicle o What if same trust instrument. o Marital trust – easy to dispose of. o There is a reason not to make it same as will – so its amendable and can avoid probate o The whole point of separate trust and pour-over is so you don’t have to re-execute new will w/ testamentary formalities for every change. o If revocation by divorce operates. o Statutory interpretation – read statute to eliminate provisions in trust and will. husband’s life interest is defeated. (OH did this) o It is incorporated by reference into the will.

If he died and both were found. • CA §5600.  LI co. o Completely inconsistent.  No revocation statute about insurance policies. o Reaches some but not all substitutes o In the case of non-probate transfers generally. o UPC . They get divorced.Fall 2006 . (1) remains in effect and is operative upon the death of T. (2) to beneficiary B.  §5600(e): Provides for everything other than LIFE INSURANCE. o Does it remain revoked? Does it again become effective? Did she intend to die intestate? • CL: Two approaches: o (a) No part of a will is effective until death of T. §5601: o Corresponds to §6122 -.  If no evidence to show what T intended.  Unless some affirmative evidence that (1) remains in effect. Let them battle it out in court themselves. most T’s would prefer to have step-children and relatives by affinity excluded. o Her intentions with respect (1) may or may not be known. this is just one example. o Some courts that have taken statute at it’s word and says step-child still gets to inherit o CA Ct of App: ready presume that gifts in a will to a divorce spouse’s relatives are also revoked. when she destroyed (2).McCouch  Are life insurance proceeds covered by same rule? o Life insurance made payable to husband. Relatives by Affinity: • T is married w/ un-adopted step-child. She lives estate to husband and step-child. o Rebuttable presumption. Revival of Revoked Wills: General: • Often involves this situation: o Two wills: (1) to beneficiary A.’s find it less difficult to pay out to who is on the policy rather than tracking down the intended beneficiaries. • CA follows original UPC – limited to provisions of spouse. leaves open ability to show what T intended. then she dies intestate. the she divorces. o Why doesn’t the statute reach life insurance policies??  Problem still alive in CA.Additional provisions that provide substantially the same language for nonprobate transfers to spouse after divorce. • UPC: tried to remedy statute to fix problems. including life insurance policies. transfers to the former spouse are deemed revoked  §5601: severs JT and turns to TIC. gives max effect to what T would have actually wanted. Do the provisions in will revoked by divorce extend to husband’s relatives? • Revised UPC: Although probable intent is less clear.  Life insurance gets all kinds of special treatment. o Extends to all will substitutes. Covers relatives of spouse as well as spouse.Won’t look outside of the will. o (b) Ecclesiastical: presumption against revival. (2) would control.  McCouch guess: The life insurance lobby leaned on it to get themselves exempted.  If revoking instrument (will 2) is itself revoked before T’s death. • English Parliament: (not followed in CA) 67 .Wills & Trusts Outline .  No basis to keep husband from taking those proceeds. o Automatic revocation unless will EXPRESSLY provides otherwise.  Destruction of (2) revives (1). o Case-by-case. Look to ALL EXTRINSIC to determine her intent. o T successfully revokes (2).

Will is partially inconsistent. but leaves rest intact. rest to B. unless evident from circumstances from: • Revocation of second will. o The kind of evidence permitted depends on how revocation of (2) occurred. Will (2): ring to C. • CA: Where (2) doesn’t completely replace (1). but allows presumption to be rebutted. • DRR is an equity-type doctrine. Dependent Relative Revocation: Generally: • Court may disregard an act of revocation if it determines the act of revocation was premised on a MISTAKE of law or fact as to the validity of another disposition and the revocation would not have occurred but for the T’s mistaken belief that another disposition was valid • Intended to limit damage rather than give effect to what T wanted. its allowed. Will (2) revoked all or part of (1). o Connection is close enough to say T would rather leave original will than go to intestacy. o Presumption rebutted if sufficient evidence of contrary intent. there should be a presumption of revival.  Revoked by SUBSEQUENT INSTRUMENT: • Revive (1) ONLY if intent to revive appears in four corners of (3). • If she said to A. or  Testamentary Act (like later codicil) Makes it difficult to bring forward pre-existing will and bring new life to it. and has since been revoked. o Only in this sequence are we faced with revival. T tears up (2) intending to revoke. • Can look to extrinsic evidence. Hypo: (2) doesn’t contain a residuary gift to D. that is evidence that she intended it to be revived. o If she kept (1) around. “I’ve revoked second will. • Leave the terms of first will in place. • At her death. • Obliterates part. o Does not produce automatic result. the remains of (2) and pristine (1) are both found and offered for probate. o Required: revocation of (2). Hypo: Will (1): Ring to A.Fall 2006 . Essentially. so you’re back in” that is enough to let (1) back in. • Relatively lenient rule.Wills & Trusts Outline . we would expect to see that intent on the face of the document. or • T’s contemporary or subsequent declarations  That T intended to first will to take effect as executed. 68 . • CA Probate §6123: o Presumes NO revival. CA and UPC: Ecclesiastical with modifications: • Will (1) and will (2). o Revocation of (1) is dependent on and relates to mistaken belief on part of T. o CA: presumption AGAINST revival unless sufficient evidence of intent to revive. • UPC: The previous will or its revoked part is revived to the extent it appears from the terms of the later will that T intended the previous will to take effect. o CA §6123: requires  First will revoked (not revived).McCouch o o Anti-revival statute: bars a prior will from being revived unless there is:  Re-execution.  Revoked by PHYSICAL ACT: • If she intended to revive #1. rest to D. • If T went to trouble of executing (3) to revoke (2) in order to bring back (1). it’s a codicil.

but only if new valid will. o Invokes a legal fiction: CONDITIONAL INTENT: • T cancelled conditions with intent to revoke. B is one of the two attesting witnesses.McCouch o o o Court should look at alternative decision it could reach. But she was mistaken. Original will or intestacy – matter for the court to decide using discretion. so she strikes bequest. Writing new amounts is not enough. but keeps together with (2)? 69 . At T’s death. o Leaves original will in effect. court can apply DRR. o Makes a valid act of revocation (striking his name). o The transaction as a whole – we think she intended to revoke assuming new will is valid. Schneider v. Which is least offensive outcome knowing what T actually intended. • She didn’t intend to unconditionally revoke the bequest.Fall 2006 . or o DRR leaves will (1) in effect. • Generally applied only if attempt to make new disposition fails. or if new document is a mistake of fact or law on its face. Harrington: pg. Rationale for Doctrine: • Don’t want to give effect to a revocation that is known to be contrary to T’s intent. and never properly revoked.Wills & Trusts Outline . She signs. so he must forfeit his bequest by virtue of a purging statute. o Since T can’t increase other two shares the way she tried. • (2) Original will – bequest to nephew T thinks is dead. o What she did to old will (drew lines) is a complete revocation with intent to make new will. T decides she will substitute new disposition. • Courts can’t reform the language of a will – can’t look behind it and change words. next best thing is to ignore revocation Hypo: T executes attested will giving all property to A. o Can re-cast as conditional intent • She intended to revoke only if her belief that beneficiary was dead is true. • Next best thing: undue the revocation and cap doctrine so it doesn’t reach too far. o Courts disregard what looks like valid act of revocation. • Look to T’s intent: o Did he tell anyone what he was trying to do? o Does he have good relationship with A? o If (1) was premised on mistake of (2). • Cannot give effect to what she tried to do. Because cancellation of one share is next to the increasing of other shares. we can look at everything to find probable intent. 357: Will leaves estate to niece and two sisters. coupled with intent to modify existing will. DRR allows ignoring what looks like valid revocation. Where DRR Comes Up: Two Basic Patterns • (1) Existing will. Draws line through will executes new one (also type-written). Wants to revoke one beneficiary’s share and increase others. how should estate be distributed? • Revocation of first will is closely linked to new attempt to leave property to B. • Holding: court leaves original will intact. Valid act of revocation. so either: o Will (1) is revoked and goes through intestacy. but no new witnesses. T later tears up original will and executes new will that gives all property to B. • New will can’t be carried out. or o Leave revocation in effect and stick her with consequences (1/3 would pass thru intestacy). the condition isn’t met. • Since new will not valid. o Formally valid act of revocation premised on mistake o If new disposition cannot be given effect. Hypo: What difference does it make if T does not tear up original will. • Stuck with damage control: two choices: o Ignore revocation and leave original will intact.

or you think there is a mistake? o Courts spout rules about latent ambiguities. • In general. have to start with words in the will. need complete statement of testamentary intent. but its best to avoid relying on statute b/c they change and don’t necessarily give clear or desirable outcome. o Ex: Name beneficiaries and some die. Plain meaning rule: • Useful rule as long as doesn’t become iron-clad with no flexibility • In hands of reasonable court – means nothing more than presumptive preference for the primary meaning of words in will. o It is supposed to be complete statement o Almost inevitably going to be some gaps  Trying to apply words of wills to circumstances. exceptions o Words of the will generally govern  Court will not re-write or re-form will  Will not supply missing words  Will not re-write to give meaning that is at odds with meaning in 4 corners  Still leaves courts with discretion. if we can find it. can look behind it and apply DRR. or could create disagreements about what was actually intended. therefore revoking by inconsistency? o If inconsistent. o If the words are susceptible to several interpretations. o May make it easier to see. etc. there is no inconsistency. there might not be single plain meaning. circumstances. Ambiguity or Mistake: • Basic lines court draw is at ambiguity or mistake 70 . o Think they are faithfully transcribing. • Wills formalities and parole evidence: start w/ words of will and assume they represent T’s wishes. there is almost always some blurring of what T said. o What do we do if they are unclear. others come into existence. • Where you have will drafted by lawyer. o If B’s bequest is void (b/c of purging statute).McCouch • Is (2) is inconsistent with (1).Fall 2006 . w/in 4 corners of will. o Simple words like “heirs” can mean different things to different courts. o Arguably no valid act of revocation. Hypo: Will (2) includes clause expressly revoking original will: • Revocation by subsequent instrument • Courts: if there is some indication on face of new will indicating nature of mistake. Formalities. • Questions of changes in circumstances between will executed and T’s death. • DRR wouldn’t be premised on proper revocation of will. courts may be more or less generous and flexible. Ambiguity & Mistake: The Plain Meaning Rule: A lot of wills litigation comes from interpreting provisions of wills: • Few statutes that deal with interpretation • Problems of drafting o Some problems types that are foreseeable and statutes may help out the drafter.  Have to look outside four corners to see if beneficiary’s are still around. • More basic problem: o In theory. plain-meaning. qualifications.Wills & Trusts Outline . o Ex: dispose of property that you left someone in will. probably wouldn’t even need act of revocation. but in using legal language. o Depending on facts words. enhanced potential for mistakes and ambiguities.

Would take much more of a stretch. • Ambiguity o Courts allow more flexibility.” • There are local chapters. She said she had about 20 first cousins and wants to split equally between all. o Under plain meaning rule. Second wife was claiming she’s entitled. but cannot add or change. o They think that she meant husband’s relatives o Revocation by divorce – they don’t think the meaning changes when she gets divorced. Heff. yet she gifted to N/N.” And there are several nephews john. and 50 different organizations that could be intended. that is a mistake. o They have a plain meaning that is defined and clear. William R. • If she left income to “my brothers and sisters” and turns out she doesn’t have any. Tells L she wants a will. o “Heirs at law” has single. look outside document to see what the other meanings are and what was likely T’s intent. o That is example of ambiguity. Mahoney v. • Is this a mistake or ambiguity? o Court held its mistake. and sometimes must. Grainger: Still good law. approves. o Doesn’t matter what she meant – it matters what the words mean. nat’l society. She had none related by blood. But T had no blood relatives that fall into primary definition. can’t upset plain words of will.” They didn’t remain married. they can it effect. • Can pull up lists of charitable organizations and check the legal name before drafting this kind of bequest. • Wouldn’t know it until you look outside terms of will. She realizes she is not going to make it much longer. 71 . and he got re-married. no kids. Hypo: Clymer and Mayo: Wanted to leave to nieces or nephews. Hypo: “To Mr. and as long as they can find a supportable. he asks about family members/closest relatives. They are stuck with it. Ambiguity – look outside terms to see which T intended. courts are not bound as strictly by single. o Ambiguity – free to look outside terms of will to figure out what T meant. and don’t think that it extends the revocation to his relatives that are beneficiaries. • That is more of a problem than with named individuals. Hypo: Gifts to charity • “I leave all my property to cancer society. presumptively correct plain meaning o They can. That is classic ambiguity.Fall 2006 . Hypo: “My nephew john. and dies. T is unmarried. She reads over will. He translates to her will “estate to heirs at law” thinking that would be the same as closest heirs. plainly defined meaning. What could she have meant? • Her then-husband had bros/sis and therefore n/n so she probably intended to leave by marriage. • Turns out that her heirs at law are a single aunt that she forgot about. Court will look outside the will to see which nephew john it is meant for. Whether drafter or T’s mistake. o If a word of phrase has more than one plausible meaning. • That is an ambiguity – look to which they meant. It’s offered for probate.McCouch • Mistake o Words were used or omitted by mistake o They will not correct that kind of mistake o Can selective ignore here and there. plausible meaning for probable intent. and Mrs.Wills & Trusts Outline . o Language of the will is controlling b/c of formalities and parole evidence. • Blood relative closer than the cousins she intended. Can’t look outside the 4 corners of will. o Doesn’t (arguably) mean the same thing as it did with n/n. • Reason it matters: o Mistake – courts will say too bad.

o Result: CA law: CQ gets ½ of estate – but cannot leave property directly to non-human. o T doesn’t necessarily know what statute says. that share passed by intestacy. they were willing to look at it as how she intended it to be. even though it seemed to be explicit cross-reference to probate.” o Probate code leaves relief for child. or if she died. o It is dog. o Probably more like a continuum between mistake/ambiguity than bright-line. but if it was n/n. the niece. o “I leave nothing to my child b/c he doesn’t need it.” o She intended to go to her sister. and the second one.  Technically. so I leave all to True Church. • Term “Roxy Russell” is an ambiguity. Non-human share fails. it was very clear that G was not supposed to get more than her token gift. CL. • The line courts divide between ambiguity and mistake is not as clear-cut as they want it to be. o In her will.  Roxy’s ½ fails. and goes through intestacy. even if appear to mirror statute. but what does it mean in a will? o Does it mean heirs at law as defined on the books. She had first Roxy (who died) and later got replacement and called her Roxy too. o Have to look outside will to surrounding circumstances to determine. Roxy Russell is her dog. gets other ½.” that kind of mistake has no relief. It is an invalid bequest. 72 .  But her will said nothing about equal shares and TIC. o At the time. That is TIC. o Georgia. • Words of will.Wills & Trusts Outline . o T often thinks if they put wishes in well-recognized formats.Fall 2006 . the woman’s property would be divided between her own blood relatives and her predeceased husbands relatives if took “heirs at law” as it is in probate code. to her n/n. • Court explains that language of will has single plain meaning: o Chester and Roxy get the residuary. o T may have understood differently from what trained lawyer thought.  What happens to her ½? o Today it would all pass to CQ. and might have meant something quite different. o Could fall into trap thinking that there is a term that defines what T wants.McCouch o Can’t look outside to see if mistake or what to be done about it. Left the rest (residuary) to Chester Quin and Roxy Russell. T was not fond of niece.  He is other residuary beneficiary and would take. know who CQ is – turns out to be her tenant. undisputed plain meaning? • Similar case: woman left residuary “to my heirs in accordance w/ intestate succession in the state of CA. supposedly an individual expression. left token bequest. Hypo: How could this be characterized as ambiguity? • What does “heirs at law” mean? o We know what it means for intestacy. In Re Estate of Russell: Holographic will. o They re-define the term: clearly a bequest in equal shares as TIC. o The CA court did it.5:  Property received from pre-deceased spouse goes to that spouse’s relative via intestacy. no recourse for mistake n/n. o They treated it as one of ambiguity – b/c she meant ‘heirs at law’ as blood relatives. • Problem: what T told drafter and what the court ends up taking as meaning. • Issue: Is it a mistake or ambiguity? o Court says ambiguity about who is RR. or something else? o Is it a single. but NO ambiguity in meaning of devise to CQ and RR. they will reduce dispute. o What she didn’t realize was that in CA there is a special statute §6402. • “I leave nothing to child b/c he’s dead. o Court says that its plain meaning that can’t be altered.  Left ½ to each. On its face.

taxes.  If T leaves entire estate to 3 sisters. Ademption. general.Fall 2006 . you don’t know when he will die or what property will be left.  Look to description in will. statutory gifts. and after satisfaction of all specific. • Only reason it matters is deciding what would happen to failed gift. Abatement. and claims against the estate. o In situations like this.  Residuary requires a separate bequest clause. it is specific. • Inexperienced drafters and T’s drafting own wills don’t know how to deal with these issues. • If can identify which 10 acres. • It’s general gift. 73 .it would be divided among other 2 instead of falling to intestacy. and look outside the will. then specific. not residuary b/c doesn’t expressly cover any failed gifts and what’s left.McCouch • If it was used instead as ambiguous language. o Presumably intended to dispose of in a valid way.  Ex: My house at 1937 Broadway Street. • The CA Sup Ct: o Goes to length to rationalize using extrinsic in resolving ambiguity for finding which RR o Then puts a straight-jacket on plain meaning in resolving words to figure out what she meant. There are more than one group of $15K  Ex: 150 shares of AT&T stock • If lots of stock. • CA legislature -. lower court’s reasoning its not that far-fetched. o Named 2 living beings as beneficiaries. that is general. Should be the very definition of an ambiguous request. and demonstrative bequests.  Ex: My bank account: if identifiable apart from other assets in estate. o They don’t have a plain meaning. and she didn’t want ½ to go to G. o Lower court: intended to leave property to CQ for benefit of himself and to take care of RR. and was holographic will. o The court loses us here. it is general. o Not intended to have technical meanings that we’d normal attribute (like TIC). and outside to property owned. o Also after creditors.000.  Plausible argument: some other way to give effect to language to benefit CQ and RR  Rather than saying clear meaning of TIC. • If identified by stock certificate number. etc.  Ex: I leave $15. Exoneration & Lapse: Problem: when T executes a will.  Generally easy to identify. • (3) Residuary: o The balance of T’s property on hand after payment of administration expenses. if any 10 acres.Wills & Trusts Outline . that is not specific or residuary. o A specific devise or bequest can only be satisfied by distribution of the specific asset. o (2) Beneficiaries that come into existence or predecease before T dies (doctrine of lapse). and match it up. you’d recognize that she clearly did not want to die intestate. Satisfaction. Classification of Testamentary Gifts: • (1) Specific o Gift of particular item of property that is capable of being identified and distinguished from all other property in T’s estate. • (2) General: o Gift that is payable out of the general assets of the estate and does not require delivery of any specific asset or satisfaction from any designated portion of T’s property. • What do you do with: o (1) Property unexpectedly in estate or disappeared from estate?  Ex: T sells B-acre before death.  Ex: 10 acres of my land.

g. yet slightly different. o T cannot make a gift of property she does not own. He took proceeds from condemnation and invested them. o Some courts are relaxed. it fails). • Courts have opened door to see if the replacement property is really a continuation of the original investment in a slightly different form. • She re-lent money to someone else. the gift is ADEEMED (e. Harrington noted no residuary clause. Only statutory exceptions to the doctrine. • Identity Approach: Ademption is bright line. the beneficiary is out of luck. o If specific asset is not in estate for ANY reason.when one fails. the gift is adeemed. but wants the bonds as substitute. o Only issue is whether the specifically bequeathed property can be identified as being in T’s estate at death. The property was taken over by Redevelopment Authority.McCouch  That is why Schneider v. • Once determined tavern was specific. o Doctrine applies without regard to the T’s probable intent. o Statutes: certain times where courts recognize that defeating the gift is NOT what T intended o Leaves wiggle room for courts to develop exceptions. Father dies.  Ex: “$10K to my niece to be paid out of proceeds from the sale of AT&T stock.Wills & Trusts Outline . 74 . and not owned at death. o Applies when property that was to satisfy the bequest is not in the estate. In Re Estate of Nakoneczny: (pg 384): Will and codicils executed. the general rule prevents him from taking it. BUT  Receives benefit of being treated as general bequest for purposes of ademption. Exception for Mere Change in Form: judicial – not codified • T has shares in Acme. Ademption: • Applies ONLY to specific gifts. o Hybrid of specific and general. Son couldn’t get property. • CA Courts have been ambivalent: o Murmurings of CA Ct of App that they will be more flexible. o Objective test. back. • She left note in will specifically and then friend re-paid note.Fall 2006 . the specific gift is specifically revoked.  CL . it goes through intestacy. • General Rule o When the property ceases to be owned by T. o CA Ct of App on flexible end: allows him to take property related. some are stricter. • If specifically devised property is not in T’s estate at the time of death. o If specific gift is adeemed. • Austin: CA Ct dealt with will where T left specific not for loaned money. Looks to what T’s intent would have been.”  Looks like general because of amount. • Does the original not from X work for Y? • Court: allow Y to take the same amount even if note was originally for someone else.  Advantage: specific bequest for purposes of determining priority in abatement. but from a specific source. • Purely judicial (no statute). • (4) Demonstrative o A gift of a general amount to be paid from a specific source or a particular fund. o Will allow taking property closely related yet slightly different. UPC and some courts: • Intent Approach: More flexible. Left tavern to his son. which merged with another company and becomes MicroAcme. will unchanged.

o What do you do if property changes form by the agent. then adeemed Handout: Ademption.Wills & Trusts Outline . At T’s death. 75 .. o The line they have drawn is of convenience. and an $80K mortgage note.Fall 2006 . rather than the T? o Case law is all over the place. and four categories of replacement property. Later T sold B-acre to X for $100K and invested the sale proceeds in a 10 yr Treasury note which T held until her death. etc. o UPC came up with a more generous solution –  In this case (conservator. the statute would allow a reading of the will as if it left not just the tavern.  Convert original specific request into a general request. The property gotten back as security is replacement. and property taken or sold.  If she does nothing. but the entire net sale proceeds. the outstanding principal balance on the note is $30K. and treats as replacement property. o If T didn’t have capacity to manage own affairs. What are the respective interests of S and D in T’s estate? • There is no replacement property. agent) . o Only exception: T recovers the incapacity and survives at least a year before dying. o S gets whatever property is in the estate specifically devised (he sold it) and any balance of the purchase price OWING at death from purchaser to transferor. o (2) Eminent domain award o (3) Unpaid proceeds for fire or casualty insurance for injury to property  Ex: house burns down and pending insurance claim o (4) Debt instrument secured by mortgage or lien. o Nakoneczny: if he had agent acting b/c he went into a coma.) T executed will leaving B-acre to her son S and the rest of her property to daughter D. etc.allow beneficiary not just to take unpaid amounts.  Converted from specific to general bequest.  While living borrower foreclosed on loan.  All we had under UPC was a section like 21133 and say these are the only 4 exceptions.McCouch CA Probate §21133 (and UPC) • Recipient of specific gift gets to take the subject matter of specific gift still owned by transferor. o CA Probate §21134: o They can remain physically alive for years. Abatement and Lapse: 1. o Isolates amounts yet to be received by T before death. If fall outside terms of statute. o If T didn’t make decision personally. the general rule kicks in. o Agent may have to sell property and take out insurance.  No longer have to worry about ademption at all. we presume that she would’ve wanted the replacement proceeds to be substituted under terms of will. o The outstanding balance goes to S. o Every dollar received by T while still alive is adeemed. o The agent is standing in for T.  Then she has time to revise will. The $100K re-invested does not go to S b/c gift is adeemed. • Adeemed property is taken for granted – assumed predicate. • (a) If X paid the $100K purchase price of B-acre with a $20K cash down payment. but as if it left the net sale proceeds of the tavern. o (1) Balance of purchase price still outstanding on property sold. and because of default T foreclosed and got underlying security in place of original debt. • Notion is that it is very easy to identify unpaid proceeds under purchase and sale agreements and treat them as a continuation (mere change in form) of the original property. o General assets of the estate go to the D. • (b) T becomes incapacitated and appoints an agent under durable power of attorney. condemnation. presumably not capable of executing new will or how to handle the sale.

then general. o Main difference: advancements are intestacy.  Supposed to coincide with what T intended. and what’s easiest. B-acre to B. o $50K comes off top to pay the debts. By making lifetime gift.  Family members abate last. SATISFACTION is when there’s a will. The next year he makes gift of $1000 to A. o Deals with “who is going to bear the burden of paying expenses. o If T has not done so. 76 . but within each category. Handout: 2. after all creditors’ claims have been paid. the following rules apply: o CA §21400 and following:  Residuary bequests go first. • CL: If there was a substantial gift. then specific. o Within each class. o If T makes lifetime gift of specific item. it becomes adeemed. o Might have to generate cash to pay C and D. and the order the gifts are to be abated. Abatement: • Arises in cases where. o Leave child house in Lake Tahoe.McCouch Satisfaction of Bequests: • Hypo: T leaves $1000 to A in will. o CA §21135: Property given by transferor during life is treated as a satisfaction of an at-death transfer ONLY if in writing that the gift is in satisfaction of the testamentary transfer. the intent must appear in writing. taxes. • General gifts: o Trying to figure out what T intended is very difficult.” • T can specify in her will how claims against estate are to be paid. • Debts. legacies of $20K and $80K to nephews C and D respectively. • Specific gifts: not much of a problem. • They take full intestate share without any off-set of property given at lifetime. How should the estate be distributed? • General assets in $200K – will have to cover residuary and general bequests. • Debts: $50K o $200K to pay off $50K of debts. his probate estate consists of the following assets: o MG ($40K) o B-acre ($60K) and o General assets worth $200K. • Difference between advancement and satisfaction: o If intended beneficiary predeceases T:  Advancement (intestacy) • Kids step in to represent. and value is to be deducted. o When satisfied. the presumption that gift was intended to satisfy testamentary gift.Fall 2006 . did he mean to satisfy the will. and the rest to E. o Opposite outcomes. CA gives preference to T’s spouse and other relatives of T.  Satisfaction (by will) • Kids still entitled to take by will (representation) • The share is off-set by any advancements during lifetime. or is it in addition? o Looks like advancement.Wills & Trusts Outline . there are insufficient assets remaining to satisfy all of the gifts made by the will. doctrine of ademption applies. o MG and B-acre is taken care of. • At T’s death.  In order to treat as satisfied. and then give that same house to child when alive.) T leaves MG to his son A. and administration expenses are payable from the estate.

still subject to mortgage. o Between A and B. if not. • Within general gifts. then to B. • Both get 1/2 of what promised (they were originally left $100K and there is only $50K left). o MG and B-acre get their specific property.McCouch o C and D get their $100K total o E gets $50K • Debts: $150K o E gets nothing. o Reverses CL.Fall 2006 . o C and D were promised $100K. o A will cannot make a gift to dead person b/c dead person cannot hold title to property. presumption she takes property subject to debts. they are going to get abated ratably. 20% would have gone to C. and 80% to D. o NO 120 hour rule for succession under instrument by will. residuary clause has no effect and It falls into intestacy. • Could sell off and then pay the ½ owed to creditors. residuary to C. o If C dies. T takes mortgage on B-acre. • B will end up either B-acre or some property worth $30K. At death. same with MG.” What do we do with failed gift? • Hypo: ring to A and $10K to B.Wills & Trusts Outline . the bequest lapses and goes into residue. • CA Probate §21131: o Unless will indicates intent to let A take free of debt. then presumed deceased. Exoneration: • T owns B-acre. and C in equal shares: o Roxy Russell case (follows CL). • §21402: abate ratably within each category. or will substitute o Clear and convincing evidence rule – if can’t be sure they survived. • Debts: $250K o Nothing to E. Property is worth $100K and mortgage $80K. • Hypo: To A. specifically devises by will to A. o Failed to survive are treated as predeceasing. o Also talking about any other gifts under written instrument. • Is there any way to avoid selling off the property? • Distribute B-acre to them subject to the debt. B is residuary beneficiary. o Transferee/transferor language b/c not talking just about wills. revocable trust. o If A dies. Have it paid off from residuary estate. Borrow against it. who carries economic burden? Who’s responsible for mortgage? • CL: presumed A was entitled to have the lien against her specific devise exonerated from the residuary estate. B. • To prevent gift from lapsing when beneficiary fails to survive: o Can draft something in the will to specify: “Leave to A if she survives me. o Entitled to pass burden on to B. o All we care about is survival by an instant. Lapse: • If a beneficiary named in will dies during T’s lifetime. but only $50K left of general assets. o Nothing to C or D o MG and B-acre also have to abate ratably. • Since there isn’t enough. • CA Probate §21109: Transferee that fails to survive transferor does not take o Every time T makes a disposition by will and beneficiary dies first. the gift to beneficiary lapses (the gift FAILS). o Likewise with B – falls into residue. • Bright-line rule. beneficiary loses their bequest. Reflects UPC and what most T’s would probably intend. 77 .

o Such descendants are substituted as takers of the gift. and left descendants who survived T. leaving issue.McCouch o o CL each residuary share fails on its own. either the issue are also going to be issue of T (so would qualify by intestacy). B.  T presumably wouldn’t refer to A. A-L is to sort out family that T might want A-L protection. and predeceased T. and share of one of them fails for any reason. the issue of the deceased transferee take in the transferee’s place. o CA – fail to survive by instant. • Preserves dead class members gift for his/her issue.  If he left “to my children in equal shares” and one child is dead. The questions to ask: • Is beneficiary in general circle of surviving relatives? • Did he predecease T? • Are there issue? CA Probate §21110: • If transferee is dead. o Would substitute and will would be read as if said “to A or A’s surviving children.” o If A’s issue survives T. the anti-lapse statute fails. • Provides substitute takers if the predeceasing will beneficiary was within specified degree of relationship to T. not the ones that are dead and their issue. o UPC – 120 hour rule applies.Fall 2006 . they are substituted.  CA: no laughing heir statute. have to decide if the beneficiary survived. o Rationale: If will doesn’t specify. if any: o A was child of T. 78 . His gift fails. • (2) If beneficiary is in group. Gets re-divided under §21111. o If not in group.  Statute presumes that T would have wanted to preserve A’s share for A’s kids. Anti-Lapse Statute: • All states have them. o Purpose is to prevent gifts from lapsing by designating a substitute taker. o SPOUSE is NEVER covered in anti-lapse statute. Expands to all blood relatives and spouse or former spouses’ heirs. A’s issue don’t take by representation.  If spouses share preserved for issue. or issue by a different spouse and step-children are not assumed to be prioritized beneficiaries. and C if he knew that A was already dead. • UPC and CA: blood relatives are all covered. the failed share gets re-distributed among other residuary shares. The assumption is that T only meant to include living children. • (3) A-L statutes typically favor deceased beneficiary’s issue.  Transferee under a class gift shall be a transferee for the purpose of this subdivision unless the transferee’s death occurred before the execution of the instrument and that fact was known to the transferor when instrument was executed.Wills & Trusts Outline . and two are living when will is executed. Same as intestate share. UPC: if more than one residuary taker.  Treats each class member as an individual taker. • Two wrinkles: o (1) Applies only to class gifts.  If T knew that child A was dead when instrument executed. treated as dead.  Applies both to individual gifts and class gifts. • (1) Identify beneficiary and what relationship she bore to T: o Does beneficiary fall within specified group?  UPC: Devisee is grandparent or lineal descendent of grandparent.

B and C or the survivor of them” and the rest of the property to the church. • A’s kid gets $20K. B died without issue. and along with Burns we allow anti-lapse to apply. o She may have contemplated the death of a child. • Statute applies only if no contrary intention. or the entire residuary? 79 . o Do we take $60K and spread it evenly. o F was the sibling who left surviving issue (5). and the anti-lapse statute could fill it. • What happens if there are no surviving children. o §21111: when you can substitute the dead beneficiary’s kids. o CA makes explicit: • Requirement that the initial transferee survives the transferor constitutes a contrary intention. it goes there. and C’s two kids do the same. o Lapse statute applies first. and C’s kids share the $20K. survived by A and C’s children. or does A take everything? • Terms of the will govern if the terms of the will are clear. then if there’s no taker. o The anti-lapse is only default – designed to fill in gaps. • Doesn’t recombine and get redistributed. o Argue there’s a gap in the will to be filled. then the issue of the deceased transferee in the manner provided in §240. F and I named in will. o Is it a gift to 3 separate people. but she did no contemplate that all 3 would predecease. • This will says “or the survivor of them.  UPC: issue takes as substitutes unless the instrument expresses contrary intent. Handout: 3. o CA statute: if the instrument expresses a contrary intention.Wills & Trusts Outline . o If there is at least one surviving child the terms of the will provides what will happen. Divide among issue.) T leaves $60K to “be divided equally among my kids A. • If these are three separate gifts: • B’s share ($20K) goes to the residuary gift. T dies. • T left her residuary estate to C. • This court: they should be able to disregard the survival language. some cases have allowed it to survive.Fall 2006 . • A’s child steps into A’s shoes. o F’s 5 kids step up into F’s shoes.  Do they get F’s 1/3. its an intent that they survive T. and C died leaving two kids. • Suppose A’s kid does survive. • Burns Ct: survivorship language: o Although generally take it to mean that anti-lapse doesn’t protect.McCouch o (2) Substitute gift can be overridden if will says something different. the survival language doesn’t apply to the facts as they unfolded. o All siblings predeceased T. • Two other dead siblings. She did not leave issue. She had about 15 nieces and nephews all claiming share. or take A’s share and give her $20K? • Issue takes in transferee’s place. T siblings C. F. or to a class? • Separate people – they are named. and C’s kids.” o Requirement that the initial transferee survived is presumed to override anti-lapse statute. but C and A leave issue? o Courts have generally held if T leaves bequest to surviving children. if that’s what she intended. I or the survivors of them. How should T’s estate be distributed? • Does the estate go to A. • The anti-lapse statute preserves each dead beneficiaries’ share.  Issue of deceased do not take in transferee’s place if instrument expresses contrary intention. 395): • Burns was residuary bequest to the 3 sisters. Difference between handout example and Burns (pg. • If that’s the case. How do we distribute the $60K? o §21110(a): If a transferee fails to survive T. o The survival requirement indicates intent to negate the anti-lapse statute. look at what happens to failed shares.

• (3) Acceptance o Typically.  But here they had a statute that says if we’re talking about a residuary bequest to several people. their two shares would drop into intestacy and the other nieces and nephews would share with F’s kids in the failed 2 shares. it gets re-divided among the residuary takers. they get the same as if F was sole beneficiary. making improvements w/ understanding that gift had been made. Arendt: Wanted to give farm to kids.McCouch  The other 15 nephews argued that they should split the whole estate with F’s kids. Lenhart v. • Oral gift of land with no written evidence. deposits in safe deposit box. o SoF does not require deed in any particular form. o Constructive notice: once deed is filed. makes transfer effective against the rest of the world. once filed.  Any residuary entitled to take share. F would have been that person. • Identifies land and indicates intent to make conveyance. • F’s kids end up taking EVERYTHING. Mertz v. but courts have developed escape hatches. he looks in box and deed is gone. • Delivery is of DEED o Not delivery of possession of land. courts presume acceptance. o What about C and I? They have no issue – so where does their estate go?  If it were CL. Gifts: Three elements to Valid Lifetime Gift: • (1) Donative Intent • (2) Delivery o If a donative gift is not delivered by T’s death. o Read survivor as meaning descendents and surviving heirs. but legal title not transferred. Desmond: pg 408: Father intends to gift house to daughter when dies. courts in equity step in to prevent unjust enrichment. everyone else is on notice that legal title has changed hands.  (2) Donee took possession of land and physically. Rarely insist on express words. question of title comes up. o Requirements:  (1) Clear and convincing evidence of intent to gift. When he gets out. • He has to do something more in reliance. but recording statutes specify formalities. 80 . • Part Performance: o Attempted gift of land. Should execute deed and record it. • Is there any way to make gift effective? o Yes. Son farms for years. and tells D that when he dies she could get it and deed is hers. • Ex: made improvements based on assumption of valid gift. o Leaves room for anti-lapse b/c no contrary intent. Real Property (Land): Statute of Frauds: • SoF requires signed writing for any conveyance of land. He goes to hospital and she gets the papers. o Anti-lapse says issue gets to step into F’s shoes. o Recordable form. then it must be through will or testamentary bequest.  Treat F’s kids as taking F’s place. When parents died. o SoF has no exceptions for good faith reliance. No signed writing indicating land intended to be sons. Executes formal deed to land.Fall 2006 . She had recorded and claimed right.Wills & Trusts Outline . and has done something more. • Practical point: this kind of case shouldn’t arise in first place. if he’s willing to go to court.

cars.  Could. o Present gift of future interest. Complies with donative intent and delivery of deed is sufficient. • Must have donative INTENT.  If holding it on behalf of donee. Constructive Delivery: • If bulky. he is better off not remaining in possession until death. or (as in Gruen) he wants to retain LE and give away remainder • Doesn’t make sense that donor pick up property and hand it over to donee. o Technically. but doesn’t want to make will. o Not ideal for borrowing against land or convenience of clean title transfers (if he wants to sell). furniture.  Has very little to do with donee’s conduct. if there was no intent. • Delivery is physically handing over property. • No matter what legal title record says. then its completed delivery. that is grounds for contest. and it is not a foolproof way of retaining title. and then record.  Gives him no tax advantage like other lifetime gifts. • Delivery for an instant: o Hands deed to daughter and she hands it back. • Delivery is satisfied by giving something like key to trunk. o He could have torn up deed and there’s no record. Symbolic Delivery: • Intangibles: stocks. and assuming delivery is irrevocable.Wills & Trusts Outline . Bottom Line: recorded deed is always advisable. o NOT recommended. o Could give to 3rd person to hold onto until his death. and wants to live in the place: o No requirement that donee know of the transfer of gift. that’s not really a transfer. in theory. etc. • His intent was only to give in future. Personal Property: Generally: • Jewelry. Delivery Deferred: • Hypo: father has executed deed and wants daughter to take property at death. bond. thought not essential (Mertz). • Delivery is like what we do with land. 81 . it works. even transfer to future donee (someone not yet born). o Requires cooperation of daughter to comply until his death. Rights possessory only at future time. cash – may or may not be physically available. o If he parent never realistically gave up anything. Can he deliver that deed and transfer valid title while alive. inconvenient.Fall 2006 . can use grounds for contest to undo recorded deed. He’s LT and she’s remainderman. Always have to look behind formal change of title for intent. • Doesn’t want daughter to know of transfer.  Delivery is focused on DONOR’s actions – his giving up control of property.McCouch • He did not have immediate donative INTENT. • Life Estate: o She can record that. o If transfer is at death. but prevent her from taking possession? • Deed delivered during life: o With understanding that it won’t be recorded until death. o Like will executed w/ formalities – if no intent or tainted. its subject to estate tax rather than gift tax:  If he wants structure of lifetime gift.

so the funds pass through will or intestacy. o Just a different formality – in theory it requires delivery like lifetime gift. o Must determine if it’s a gift. but wants to get rid of property in case she dies. Intended to fulfill these functions: • Donative intent • Irrevocable delivery of property • Some physical evidence Gruen v. • Executor is still entitled to go after donee and demand return of those funds. Intangibles: • Gifts of money. Widow attacks gift. • Can someone who takes own life make valid gift causa mortis? 82 . alternatives available. o What should bank do when presented with check? o UCC protects the bank. Gifts Causa Mortis: • Gifts of personal property (not land) made in contemplation of impending death. Gruen: pg. o She doesn’t have time to make will. have to persuade donee to give it back. donative intent even for future interest. Decision to kill herself not irrevocable. Lifetime or death-time transfers. even if it has notice that check-writer is dead. o Protects them from having to ascertain whether T is still alive or if they’ve been notified of T’s death. what is being given away. • Checks: written evidence of intent to transfer funds. • Need present. Sherer v. Can you make a valid gift of a future interest in tangible property by writing and delivering a letter? • Allowed for intangibles and land.Fall 2006 . o If gift.Wills & Trusts Outline . • REVOCABLE by definition. No valid will. there was no delivery. only suicide note. Hyland: She kills herself after writing note to boyfriend. Gave it as lifetime gift to avoid estate tax. • If T dies before check clears. Endorses check for insurance proceeds to friend R. • In theory. etc. Doesn’t transfer immediate rights. or if check was given for consideration. • Differences/similarity to will bequest: o Both become irrevocable only at death. and leaves on kitchen table. but unclear if valid for tangibles. o But like will it is revocable. o Banks permitted up to 10 days after death to pay checks. its technically revocable.McCouch • Execute a deed of gift – writing that by its terms stands as symbol of completed gift. o If she doesn’t die. o Have to give something away right now. o When death occurs unexpectedly or death-bed gifts and T doesn’t survive long enough for check to clear. No in-hand delivery. o Signing a check results in nothing. People write checks all the time intending to gift those funds. • Typically a direction to agent or assignment for reciting terms of gift and date. o Other gifts: delivery is not complete if revocable. • She hasn’t handed over physical custody. o Until the check clears. • Delivery depends on circumstances: o Type of property. 417: Father wants to gift paining to son. even if you hand it over. she could always come back and undo the check.). the gift won’t take effect. • Holding: delivery requirement was NOT adequate given kind of interest involved. o Really isn’t delivery of anything. • What happens if donor writes check and it doesn’t clear until after T dies? o Timing can matter for lots of reasons (taxes.

o Not much to distinguish it from incomplete gift where delivery is in future. delivery is the same for GCM as outright during life. • Is there any reason why any other type of beneficiary designation wouldn’t work? o Ex: POD agreement with bank. o Stepped into almost every kind of contract with POD. and wants to make gift immediately.Wills & Trusts Outline . but went for walk and got hit by car? • If death was accidental.  Trying to make irrevocable and presumably conditioned on own death.Fall 2006 . that was sufficient for delivery. • “Testamentary” is often misused.  Ex: Bank Accounts in CA and most states are specially regulated. Version in CA: §5000 • “A provision for non-probate transfer on death is not invalid because the instrument does not comply with the requirements of execution of a will. but court said b/c “testamentary” it can’t be used. o Court: doesn’t matter if threat is from disease. Non-probate transfers at death: • Another statute originating in UPC. Limitless ability to try and come up with ways to transfer property at death. outside agency. POD’s were generally void. and these will substitutes posed threat to all of probate machinery. • Provisions specify ownership rights of individual. usually for specific property. o Check to Robert: present gift. o NOT gift causa mortis.” (lists whole bunch). is that adequate delivery? o She did same objective acts with check and leaving apt. Phrase has no meaning unless you know substance that lies behind it. or intent to take own life. she probably took all steps she could’ve been expected to make to show that it was final and intended to give it up. o Gift just has to be made in contemplation of impending death.  Is the POD contract valid? Courts up until the 60’s were still divided. • As a matter of CL. • Delivery adequate? o This is VERY lenient.McCouch o Fact she took own life doesn’t make death less imminent. o She was still making gift in anticipation of impending death. • All controversy surrounding the validity of the non-probate transfers as “testamentary” is solved. o Generally. joint. o But GCM is always revocable. lifetime and death-time rights. o Court: when she left apartment and had no intent of coming back. Will Substitutes: General: • A very messy and undefined area. require that she have donative intent. She has both. • Is it a failed attempt of regular complete gift? o In theory. • Eventually got statutory interventions. o Nothing specifically in contract law restricted POD’s. o Courts said contract was testamentary. • Valid as POD and is non-testamentary.  Under circumstances. • Several ways to approach a transfer of property: Contracts • Do contracts that call for transfer of property at a person’s death hold up? o Life Insurance: Courts in the late 19th century began to accept the pay-on-death beneficiary. Hypo: what if she hadn’t been intending to kill herself. o Made it too easy to circumvent probate protections. 83 . o Legislators and UPC stepped in to validate specific types of will substitutes.

Bottom Line: statute can be very useful if trying to provide for non-probate transfer. this deed was never delivered during lifetime.  Language is not intended to provide relief for the absence of delivery in lifetime gifts. o It’s intended as a catch-all. • Why wouldn’t any botched will then fit into this statute? o The drafters were not intending to do away with the statute of wills. and stuffs it in safe deposit box (no delivery) and tells daughter that when she dies she can go in there and she will find will and other papers. other said its not what drafters had in mind. Why doesn’t it work? o Ex: life insurance: almost always have a third party in control of property that is not affiliated with the beneficiary who has interest that transfer takes place according to directions. Hypo: parent wants to make death-time transfer of real property (house) to daughter. but it is sufficiently indefinite so that unless its something pretty standard (bank account. • Does the statute hold up so that the daughter wins? • §5000(b): Included in this general rule are: o (1): “Money or other benefits due to.  Shift of ownership that occurs at death with reference to money or other benefits. not death). but ANY provision for non-probate transfers at death are valid.  UPC: OFFICIAL COMMENT now specifically addresses it. o Very hard for litigants to know where protected category ends and prohibited begins. o Promises to each other. • Problem: CL gifts.  Not intended to make irrelevant wills formalities. and may not even want daughter to know. o Statute didn’t state certain limitations. Any similar written instrument. and will distribute remaining assets according to decedents’ wishes in this agreement or separate writing. o (2): Self-cancelling notes:  Child agrees to pay money back to parent. controlled by. o One said its okay. daughter goes. • This would undermine the importance/validity of probate process. She is reluctant to execute will. o They were assuming there would be a limiting feature that is not set forth on the face of the statute. Parent dies. o And on its face indicates outright transfer (should have taken place at lifetime. but if debt outstanding when parent dies. Decide to do a private version of probate and execute a contract signed by each: “upon death of first one of us. pay off any creditors. Doesn’t say anything about retaining ownership at life and then transferred at death. so can’t stand as lifetime conveyance. Hypo: Two elderly sisters with lots of property.  These are pretty vague. o (3): Property controlled by or owned by the decedent before death. life insurance. Two recurring problems: Life Insurance Policies and Joint Tenancy: Life Insurance: 84 . marital property) don’t stretch it too far.Wills & Trusts Outline . and survivor does everything executor would normally do. or owened by decedent before death…”  Standard POD on bank account.  Deed is really an outright transfer. mutual consideration. although they had them in mind. so she executes deed to the house. o Also can’t stand up as a will b/c not executed according to wills formalities.McCouch • What it means: not only the enumerated types. and picks up deed and wants to record it. the debt is forgiven. they don’t want will.” • Essentially a joint will without formalities. She wants to keep ownership until death. o Two courts have come out on opposite sides of the line in this situation. but not through probate process. o Not saying that they can work if it looks like a deed or contract. Not limited to enumerated. • Not what UPC drafters had in mind. the survivor will collect all assets.Fall 2006 .

At her death. • Still major problem with life insurance. a JT can be created. • Executor claims it was revoked on divorce. Survivor takes full ownership. most of the time parent will die first. but not much more. • What happens at death? o Assuming JT is validly created. is protected by paying out to him. while both are alive they own property together in equal. as joint tenants.  Ex-husband voluntarily waives rights o Simple agreement doesn’t get there. • JT is created by expressing that intent o In the names of A and B. Comes up repeatedly. • Life Insurance co. o (2) Creditors of each JT can reach that interest  A has debt -. undivided shares.Fall 2006 .  But if child dies first. but don’t function very well as will sub. They divorce.  Will has no effect to change designation of beneficiary. vested rights to property in undivided shares. No mention of the insurance policy that was taken out in wife’s name and is separate property. her ex claims insurance. o (1) The right of survivorship is very inflexible – whoever dies first loses the interest. unrevoked beneficiary designation is still valid. with right of survivorship (R of S must be expressed). o LI co. o Husband and executor have a dispute. • What about divorce? o If it were any other type of property.  It cannot be modified or revoked by will.  It doesn’t guarantee any back-up disposition when people die in unintended order. o If they want to do JT as a way around probate. o He is on the policy. that persons interest terminates and disappears. o During lifetime. o But life insurance is specifically exempted to the revocation by divorce. Is there anything we can rely on? o Still a problem: under contract. they’re building in some difficult lifetime consequences. B is TIC with A’s creditor.  Wouldn’t happen if property was owned by a spouse as sep. property is right back in parents hands and nothing has been accomplished.  If parent bought property and took as JT with child.they can reach A’s interest and foreclose on property. o They function in part like one b/c avoid probate. Joint Tenancy: For any type of property.  Doesn’t go through probate. • Two people have property. o NO TRANSFER at the death of first LT. No reference in settlement agreement where he relinquished his rights. doesn’t have to investigate if there was a divorce. 85 . JT’s have immediate. concurrent. §5600 – 5601. will doesn’t govern. She dies unexpectedly and never changed it. and will says that she specifically leaves the policy to her kids. • Lots of interesting consequences: o People often think of JT and right of survivorship as a will substitute.McCouch Hypo: Life Insurance policy where owner has designated spouse as beneficiary. • JT’s actually have nothing to do with simple will substitutes – major functional differences o (1) One can always sever JT by transferring their interest to another person. o He gets to keep proceeds unless overriding document:  Change in beneficiary designation (and its formalities)  Property settlement agreement that specifically deals with it.Wills & Trusts Outline . etc. o When first of two dies. there are some kinks. • Rule still in CA: unamended.  No notice or intent required.  JT becomes TIC. nor did she promise to maintain him as beneficiary or name anyone else. property or a parent wanted to leave property by will.

 Problem: a POD arrangement. • Problem: Joint account can be interpreted to cover any of these.  Different than CL JT which is undivided. Form of JA w/ specified lifetime and death-time rights. those provisions have no effect on the JT. interest disappears.  Administrative headache. o Designates someone else to take at death w/o going through probate. Terms of the will are irrelevant. o Traditionally: joint accounts were cheap solution to probate problem. survivorship right can be undone at the stroke of pen if either JT wants out of arrangement. Perfect will substitute – want the designation to be subject to amendment.  Since parent contributed all amounts in account. o At death. creditors may try to reach the assets. those funds belong to A. change if circumstances change. Bank Accounts: • Very widespread methods of obtaining beneficiaries.  Ex: A and B open JA. JT’s are not really a great planning advice.  Once parent dies. equal shares. o (2) Intended to avoid probate aspect  They weren’t worried about lifetime rights. • UPC: allows max flexibility w/o cramping rights. undivided interests.  BUT they will probably try to find them before they die.  Substitute for durable power of attorney. puts kid as party to account so she could write checks and manage the money. then during parties’ joint lifetimes.  Ex: Parent-child account. there is nothing more to attach.Wills & Trusts Outline . JT looks like good creditor-avoidance device (leave them with no recourse when you die). but easily puts it in child’s hands at parents death.  Maybe didn’t even realize that kid would be owner at death. o (3) Considered lifetime. parent would own and child wouldn’t interfere. equal. • The question of parties’ intent came up: o (1) They intend what the arrangement says on face – to create CL JT.Fall 2006 . it can create an untenable relationship and unstable relationship.  If they withdraw more than ratable share. Acting as parent’s agent  Parent worried about becoming incapacitated. as long as both were alive. • For those reasons. creditors of each JT can reach ½ of the property. they are responsible to other party.  Problem: very unusual to treat a fluctuating fund as real. no one else. Can’t do it in JT – all goes to survivor.  If all funds came from A.McCouch • o o • (2) Creditors  During lifetime. but not death-time aspects. Joint holders of the account. just concerned with probate.  If creditor hasn’t attached the interest. • If interests diverge. If there’s no statute that allows you to set up POD account. o During life. Take away points: • Can mess up credit. and parent has lots of debt.  If parent dies and child survives. o Can be vague and too flexible – hard to tell exactly what is going on. the CL courts would strike down as testamentary contractual relationship.  Even if will says one JT wants interest to go to someone else. 86 .  Possible that parent wanted child to have vested interest in each dollar in account. But its not. o Real mess of case law in absence of statutes where courts have to figure out what the parties’ intended. o During Life: presumption during life that each contributor owns in proportion to her net contributions. changing or altering beneficial rights is difficult. o Unclear from terms of account what the parties actually intended. revocation. even if intent is very clear.

• Trustee manages for named beneficiaries. o Really has very little resemblance to JT in other types of property. • Wrinkle: traditionally.leaves original depositer of owner during life. o At death: rebuttable presumption that the survivor is entitled to the whole account. o Definition of trust: relationship between trustee and beneficiary with respect to particular property. o They can offer ambiguous form of account and aren’t responsible. and all he has to do is distribute the property to B. • End up with arrangement that we call JA – even though looks nothing like JT. and then he eventually paid it out to the remaindermen. o Legal title in hands of trustee. it is a headache. • Trustee has all management powers that legal title holder (owner) would have. Revocable Trusts: Generally: • Best of both worlds: o Retained ownership during life o Lifetime transfer doesn’t take effect until death. • Trust allows dividing ownership o To separate present interest and future interests o Also ownership of testamentary estate and beneficiary estate. o It is self-interest of banks. o Can compel him to account for its management. When A’s interest expires.McCouch  JA is essentially equivalent to a revocable transfer during lifetime. creditor’s rights.  Bank is protected to paying out to either party.Wills & Trusts Outline . it is likely to be more trouble than worth.  Flexible – but also a recipe for litigation. Clarifying beneficiaries’ interests. • Beneficiaries have all rights to beneficial enjoyment. o Heart of the trust is not an entity – it is the relationship.  Recognizes that they might have intended a convenience account without survivorship rights. • Alternative o POD account  No interference during lifetime . Has nothing to do with probate. the property is already titled in trustee’s name.  Creditors can still reach decedent’s interest if probate estate is insolvent. o Settler would put property in hands of trustee.  Beneficiary has no lifetime rights.Fall 2006 . trusts were irrevocable. • Perfect instrument for transferring from A for life to B outside of probate system. Bottom Line: JA are not recommended. and lifetime/death-time rights. • Why do we still have joint accounts? o Financial institutions have no stake – they don’t care if parties litigate. • The relationship of rights/duties gives rise to the trust. 87 . If there is a dispute or if tested. o Proportion of contribution o Rebuttable presumption for survivorship rights. Trustee owes fiduciary obligations to beneficiary. but claims at death. o Beneficiaries have right to sue trustee if he misbehaves.  Allows executor to come in and try to prove that the JA was not intended to confer survivorship  UPC does not require the surviving tenant to get full ownership. o Power of Attorney  If client wants child to manage account  Agency arrangement.

Wills & Trusts Outline - Fall 2006 - McCouch

• The notion of a revocable trust is relatively recent. o Settler keeps beneficial interest during lifetime, AND retains legally enforceable power to revoke the trust and get the property back during lifetime. o Looks like a will – have full authority to amend, change during life.  Only difference: settler technically made transfer of future interest during lifetime  No actual transfer that takes place at death, just falling of remainder interest. • If settler maintains the power to revoke, what is different than a revocable gift? o Revocable gifts ARENT VALID. o Courts have recognized that in setting up trust, you can retain right to revoke trust, even though you couldn’t with outright gift or property. o Farkas case. Why do courts worry about dividing line between lifetime and death-time transfers? • Trust and fiduciary obligations o From beneficiary’s standpoint, he has an “equitable interest.” o Beneficiary has a bundle of rights primarily enforceable against the trustee. o That is what we mean when we say B’s “interest” in the trust. • Like any other property, it can generally be transferred unless there’s a valid, enforceable restriction. Basic idea of will substitutes and trusts: • Farkas is good pre-UPC discussion that indicates the conceptual framework that court’s used • Generally, a fiduciary relationship of property that arises from settler’s manifestation of intent in making the trust. • What a trust needs: o (1) Expressed intent on part of original settler o (2) Trust property o (3) Parties: • (a) Settler (provides property used to fund trust and to express intent to create trust) • (b) Trustee • (c) Beneficiaries • In traditional types of trust – the standard form was irrevocable trust that had trustee different than settler. o Pretty easy to see if trust had been created. o Presumably delivery of property from settler to trustee. o Different than formalities in executing will. • Will becomes effective only after T dies and admitted to probate. • Transfer of interest in trust happened during lifetime irrevocably. th • In mid-20 century, people came up with idea of REVOCABLE TRUST. o Here we’re comparing it with gift (rather than will). • To have completed gift, must have delivery that it is irrevocable. o Concept of revocable trust is nice hybrid – has best of both words. • Similar to gift of property inter vivos. • But if he includes the power to revoke – that doesn’t look like a gift. Looks more like a will. • Unlike will - the formalities for creating a trust look like formalities for lifetime transfer. Farkas v. Williams: Vet he wanted to transfer property to at death to associate Williams. Instead of will, opened mutual fund account and wanted to designate W as death-time beneficiary. Tried to find way to get around wills formalities. • Mutual fund company (IDS) came up with one-page trust. o Mr. Farkas as settler, identified property, and named himself as trustee (he can do that). o Complied with what seems like an inter vivos trust. o Nothing in trust law to prevent settler from designating beneficiaries in the future, or to revoke the trust. o Can’t do it with a gift – can with a will but then you have to comply with will formalities. • On its face, nothing wrong with it in trust law.


Wills & Trusts Outline - Fall 2006 - McCouch

o What he’s doing looks a lot like what he would do with will disposing of specific assets o But he hasn’t complied with formalities of will. • Issue: is there a valid trust or not? Trust law point of view: o (1) Did Farkas give up full ownership and control?  He gave up at least a scintilla. He can’t be settler, trustee, AND sole beneficiary.  Beneficiary W had no present rights.  Beneficial interest vested at F’s death if the trust hadn’t been revoked. Looks like a will.  Did F retain too much in way of ownership/control? o (2) Did a beneficial interest pass between F and W?  Viewing as transfer in interest in property.  Did any enforceable interest/right pass to W when F did this? Did any identifiable beneficial interest pass from F to W? • If interest passes, then almost by definition is a valid trust. • It’s hard to identify what interest W received. o If court had to identify interests that pass, it is a vested remainder subject to complete divestment. • What do the rights consist of? o There was never a breach of trust (F dies, and claim is between W and executor). o W would have to sue F in order to find out if W has rights (F was trustee). o But F didn’t do anything that would give W cause of action or complaint. • Court: trustee owed fiduciary duties to beneficiary. o In theory, F could’ve breached trust, and if he had and if W sued, he could have gotten relief: o What if F spent all money in the trust? o If W decided to sue, what relief could he get? Legally or practically?  F would respond that it’s a revocable trust, he reserved right to revoke it.  He constructively revoked. o If F had sent written notice to revoke trust (e.g. to IDS offices), that would have been express.  If he just withdraws funds w/o giving notice to issuer, that’s just a technicality.  He is the trustee, so why does it matter? • He didn’t follow trust requirements for revocation, and the terms can be held against him. o IDS created canned form of trust with terms indicating they wanted notice.  Wanted to know if changing beneficiary so they can pay to correct person at death.  Effectively saying “if you don’t comply, we are not responsible if we pay out to named person.”  Protects from double-liability. • No valid revocation unless follow exact format required under trust instrument. • Would be amazing if that stands between valid trust and getting around wills formalities. • Conceptually, hard to imagine where there are enforceable rights by W against F. o Hard to imagine what conduct F could have done to breach this trust. o It is so easy for settler to revoke trust. o There is nothing in trust law that requires you give notice to 3rd person (IDS just wanted it). o In theory, he could just revoke by tearing it up. o Normally, it is easy as against trustee – if he’s careless in investing, spends trust property, etc. • No realistic rights that W had. Result: • Court throws up an elaborate edifice of legal fictions to justify a conclusion that trust is valid: o They are confident no risk of fraud or abuse. o Terms were clear o Third party involved o Safeguards and formalities were adequate to make sure it won’t lead to abuses. • As a realistic matter, court is bowing to society.


Wills & Trusts Outline - Fall 2006 - McCouch

o There is a demand for will substitutes, and revocable trusts meet that demand. o There is no reason not to let them go forward. • Not very different from what courts were doing earlier o Banks, knowing they couldn’t offer POD accounts, resorting to trust fictions to provide the equivalent. o Totten(?) Trust: Depositor in savings account who opened in this form:  A wants account payable at death to B.  No statutory basis for it – so A opens savings account, “A as trustee for B.”  At A’s death, is bank account part of estate, or is there valid trust for B? • Court stretched trust law and found valid, enforceable trust they called “tentative trust.” • Property, parties clearly defined (settler, trustee, beneficiary), intent to create trust. • Only question: could they imply terms to make it an enforceable trust. • Court read in implied terms: • A is creating trust to take effect at death • Its revocable contingent on B surviving A. • If B is still alive, she gets to claim account in trust.  Complete legal fiction because B has no enforceable rights during life.  It was a way to validate formula as a method of transferring property at death. • Totten trust spread like wild-fire. o No real substantive difference between these than POD accounts. o All it is – an express trust where all terms are implied from simple phrase. o Court bent over backwards to give substance to it. Formality: Parties for Life-Time Trusts: • Settler and trustee can be same person. • Settler/trustee cannot be the same person as sole beneficiary. o CANNOT have those be the same person. o Can have trustee that acts for himself and another person (A acting for A and B is fine). o Can have A and B act as co-trustees for the benefit of B alone. • It can be either someone else named as trustee, or a person who names himself as trustee. Trusts: Inter vivos: • Pour-overs • By agreement • By declaration • Don’t need probate to get trustees or to get ongoing supervision of administration. • Trustee not obligated to submit accounts to probate etc. • Handled outside the system unless some dispute arises. Testamentary: • Only way to dictate disposition of property at death is through will. • Testamentary trust must meet same formalities as will and be created by will. • Inclusion in will: o Terms set out in will, or o Incorporate by reference o Otherwise, passes by intestacy. • Named trustee has to go through probate process. • Under ongoing duty to submit regular accountings and get court approval • More cumbersome than inter vivos generally.


• (2) By declaration o Teliaferro. it would stand. o Increasingly popular – very convenient and informal. he raises a presumption that he intended what he signed.McCouch Methods to Create Inter Vivos Trust: • (1) By agreement o Have an agreement between settler and someone else who acts as trustee • (2) By declaration o Settler names himself as trustee o Farkas. o Technically enforceable.  He is only beneficiary during life and has full power to revoke. to set up inter vivos of stocks.  If trust is valid. o No legal requirement in trust by declaration that you deliver property to yourself or to re-title. o Unlike agreement situation. 91 . but recommended.Wills & Trusts Outline . could do so just by standing in empty room and declaring self trustee of all for the benefit of self and some other beneficiary. o If property re-titled on record of 3rd parties to keep track of it. o No one will be sure of intent to make declaration. need to have a transfer of trust property. Want good evidence of terms. claims trust never came into existence b/c the property was never actually transferred. o Same formalities as other lifetime transfers: • Land • Statute of frauds – written memo of transfer of land. property included. and title staying in own hands. Dies. the settler owns legal title. Taliaferro v. o Submit change of ownership designation to life insurance company and for stocks and bonds. o When trust is created. • Practical Matter: o Litigation can be avoided if he went through formalities that aren’t required. • Tangibles • Ex: artwork • Physically hand over property or deed of trust and transfer by symbolic delivery.Fall 2006 . matters would have been simplified. Why does it matter? • (1) By agreement: o When someone else is acting.  If he’s successfully transferred. bonds. but not a good idea. The written instrument: • Nothing in law REQUIRES written instrument generally: o In theory. or cash. • Intangibles • Ex: Stocks and bonds • Re-title and put in name of trustee. No delivery of property to someone else or re-registration of title. o His subsequent conduct just shows he was violating terms of the trust. the EQUITABLE interests are being transferred – severed from legal title and going from settler to beneficiaries. Taliaferro: Declared himself as trustee of various properties and set out terms of trust in written instrument. No formal requirement to re-title. etc. where there’s no other way to get property into 3rd persons hands. Written document is enough to determine present intent. there are other beneficiaries. • Court: husband created a sufficient trust. we tell if it was valid by if beneficiaries got their interests • By signing the document. o Trustee must have legal title to administration of property. o If had enough proof to persuade court that the declaration was made with requisite intent. o Permits action by beneficiaries to assert rights b/c of fiduciary relationship. and wife unhappy.

• They will look for his signature on a transfer of property. Gift and Will: 92 . He deposits the funds and then uses them for other things. o We want evidence of transfer to 3rd party (at least). o If properly drafted and not testamentary.  (2) Oral declaration of settler standing alone is not sufficient. how will beneficiaries get property? o If properly customized.  Hypo: grandparents want to provide fund for gkids education. o We assume when he accepted the property. o His acceptance and understanding is enough – c&c. o Statute of frauds – requires written memo to make valid transfer of interest in land. • If vacancy for trustee and no successor or procedure for naming one. don’t need to go to court to assert rights of trust instrument. o If original becomes incompetent. that is enough. • The provision is meant to keep people from claiming money based on what settler said. “this money is to be used for D’s education.  Could claim life insurance. D wants to sue her father for the funds.  If no one is appointed.Wills & Trusts Outline . • Could be upheld as long as other c&c in addition to settlers oral statements. o If someone is asked to serve as trustee. it is required: o CA Probate §15206: signed writing in order to create trust of land.  She might have never heard of trust – if her intent is arrangement that corresponds to what we think of as a trust. transfer stocks and bonds. Come up with $50K and give it to their son for his daughter’s education. By time daughter is ready for college. • Statute doesn’t say what else.Fall 2006 . can always go to court and have one named. have no way of knowing whether he owns them or has trust beneficiaries. trust instrument will provide for alternative trustees. and is sole trustee.”  Although she didn’t say “give to you in trust” it is clear what her intent was. o Daughter would win. etc. o If trust by declaration. etc. o Whether by agreement or declaration. he expressly or impliedly agreed to the terms. Revocable Trust vs. o Another party is involved. if trust includes land interest. someone else would step in there too. nothing is left. Need something more. (1) To enforce oral – have to do so by clear and convincing evidence. • If he dies. His words/conduct accepting it are extrinsic evidence in addition to the oral declaration by settler. Result of trust by declaration: • Clearly permissible.  The successive trustee would have all the same powers. bonds. • Issuers of stocks. • Not enough by itself.McCouch o CA §15207: Preference of written trust instrument. the trustee has to accept the property and terms. • Heightened burden of proof (instead of preponderance). signing is required. • Would it be a valid trust in CA today? o §15207: Need evidence in addition to settlers oral declaration. Can take over seamlessly. want a writing or some other persuasive evidence that can’t be faked. This was an Oregon case. • Some specific cases. • Oral trust if it meets requirements: o (1) Settler – Grandparents o (2) Beneficiary – Daughter o (3) Trustee – Father o (4) Intent to Create Trust  She said. • Much easier just to do it all in writing. there is a big gap.

 The contract right is assignable. NY: because intention so clear. if he had to identify an existing property right. Future interests. want to think about what is the trust property. and question was if it was a valid assignment of royalties. names bank as trustee. Farmer’s Loan v. funding. 93 . Every trust needs property: • Can’t have valid fiduciary relationship without property. you could transfer the work or the copyright or share of future royalty to be earned. A few months later. o Need to show it was bonafide trust. o Cases have a lot of defensive comments: o Ex: daughter argues that father took steps to transfer property at death. He had mistress and wanted to assign to her future royalties of play that he had yet to produce. Wrote her a note assigning some future royalties to her. • Black letter: trust property must be in existence and ascertainable. o Ct App.  Transferring rights to future profits. Sets up revocable trust. not a will and not a gift.  They had to identify something as being in existence. and that’s what they accepted. o Normally easy to identify. She is expecting to get millions from husband’s estate. o Don’t need to re-title property (although good idea). o Can’t make a valid trust today of expectancy that you will get from parent’s many years away. o Pasquel: existing property right was the right under existing contract. executor gets around to making rest of distribution. o Bright-line from existing and expectancies. o Need to show that there was intent to name other person or himself as trustee. What property will end up in the trust? Husband died at some previous time. Speilman v. or even a contract to make the play. • Problem: transfers of property into trust. Purpose: she wants to sign off on all paperwork at once. o Courts won’t come to assistance of careless donor unless sufficient evidence trust was intended. Matters to trustee and to the beneficiaries when they come to get their shares. along with parties and type of trust. • Point: when identifying trust being created.  Problem here was that there was no play. bank accepts and deposits in trust account. Is there property here? • Either as completed gift or valid trust agreement o Property capable of being transferred:  Royalties: Need a work of art in order to generate royalty.  It was nothing more than an idea – and an idea is not transferable property. which can’t happen until probate court gives decree. o Courts are aware of this. • Courts say they won’t torture defective gift into trust declaration. Thats enough for him to hang the rest of the transfer on. o Can’t make a valid trust from expectancies. and bank goes down to executor and asks for the property. it was just a glint in eye. Turns out to be a massive hit. o Want to identify what property went into trust and what happened to it. so maybe he wanted to be trustee. Must have something in existence. not failed gift. Same day. settler (widow) dies. could look back to the existing play that Shaw had written. looks a lot like a revocable gift.Fall 2006 . Pasqual: Pasqual purchased the rights to make stage adaptation of Shaw’s My Fair Lady. In a few weeks they make partial distribution. and the contract he had with Shaw’s executors that gave him the exclusive right to produce the play. o Did she have an existing property interest capable of being transferred. • Problem: a settler who wants to create trust but doesn’t yet own underlying property.Wills & Trusts Outline . But she sets up trust so bank can collect the assets from husband’s estate and add to trust. He didn’t have writer.  If you have the work in physical form. Winthrop: Valid trust with $5K of seed money. They said it’ll take additional paperwork and take a few weeks. Court issues its decree. Trying to put invalid gift into pigeon-hole of oral trust. Or looks like will that doesn’t go through formalities and probate.McCouch • A revocable trust that can be taken at death and clear of lifetime gift formalities.

even though probate courts took awhile. Trustee: • Ordinarily – rights are enforceable against trustee. Compels trustee to pay off debt. etc. creditor could sue A to get judgment. If A runs into debt. o Crucial date for acquiring property interest – the date of his DEATH.  Ex: Could sell/give away life income interest. Trust instrument didn’t govern. o If she wanted to. • If property has gone up in value. bank has no power to do anything further. Income diverted.  If settler dies before transfer completed.  If there’s nothing in trust that prevents that. can get property itself back and appreciated value. o We think beneficiary’s interest in trust is a species of equitable property ownership. Beneficiaries Interest vs. and has no other assets except for income from trust. creditor would launch equitable suit against trustee. o Cardozo: she didn’t express intent to make present transfer  It wasn’t transferred during lifetime. transfer life income to someone else. interest generally transferable.  Force trustee to pay him instead of to A. • Two points: o (1) This case is extreme and arguable. they got windfall b/c of distribution in error. o That’s when he died and transfer by his will took place. If she didn’t die.  That is a powerful remedy.McCouch • Cardozo: she had existing property interest.  Creditor could reach trust to pay debt.  Beneficiary can pursue that property.Fall 2006 .  Commentary: on facts like this: a trust agreement and clearly expressed intent to create a transfer of existing assets to trust. o She had enforceable. the rightful beneficiary has COA against trustee personally.  Benefits of a trust: beneficiary has right to pursue trust property in hands of 3rd party. • Ex: Trustee makes distribution to wrong person (accident or not).  Restatement takes different view.  Cause completion of transfer. and settler has done everything in order to make enforceable. • Cardozo: if she could’ve transferred her future distribution directly into trust.Wills & Trusts Outline . transferable interest from moment he died.  This was normal . but also 3rd parties. she could assign interest in husband’s estate into trust she was creating.  If no other assets there to pay.  Pledge as security for loan. ought to give equitable relief. it is generally transferable. o Could be reached by creditors. and was improperly distributed.it is pretty standard to have trustee clean up all of it and create the trust. why didn’t she? o Would’ve been present assignment rather than direction to the bank.  Since agency is revocable and expires when she dies.  Procedurally. it would’ve been fine. Give the beneficiaries right to enforce collection of those assets.  3rd party not bonafide purchaser. • Beneficiary has very valuable parcel of rights. Transferability of Trust: Generally: • Like other property. o (2) Why did she do it this way?  Anyone that knew what she was doing could have merely recited transfer. o If they aren’t entitled.  She didn’t foresee the possibility that she would die. o Not just against trustee personally. o Could have funded it with assets she was expected to receive. o The final distribution ends up being passed in different proportions.  What has not yet been completed by the time she dies cannot be done on her behalf after death unless pursuant to validly executed will.  Narrow exception – but goes beyond Cardozo. 94 .

and not enough to live on. but B’s creditors can’t reach it.  One of trustee’s capacities is to administer trust for benefit of beneficiary. o Deadbeat dad situation. whether or not the trust includes spendthrift provision. o Creditor’s can still sue trustee. as a matter of policy courts have carved out exceptions.  They will seek payment from public welfare. o A could NOT do this with own property. and gets a better deal. o The provision is to ensure that B could not pledge the trust interest to creditors.  All equitable remedies – court can always tell trustee to pay off at the rate of X. o Once they have judgment. o If B PREVAILS. o B wants to sue trustee in order to enforce trustee to do something.  Court can allocate priority of who gets paid what. trustee can be compelled to pay it. A’s interest is non-transferable. and A still does • Blocks creditor from being able to force trustee to pay in satisfaction of claim before distribution. etc. when. o Rationale: child entitled to support from beneficiary who isn’t paying. the trustee is probably in breach of fiduciary duty. the person who provides it gets claim in collecting amounts that are due. they can collect. o Have to go against the B. He is making no payments in alimony. o Much easier to get funds when they are still with trustee. o All they have to do is specify that B’s interest is not subject to transfer or alienation. and someone else provides it for them.  Rationale: prevent B from being unjustly enriched at cost to L. Dad is beneficiary of trust. o Several categories of creditors that may attach interests in trust. • Ex: B gets income from trust. it can be made subject to restraints. • (4) Governmental Claims 95 . • (3) Services that Benefit Beneficiaries Interest o Trust lawyers that want their fees paid. they will make B pay. o Not only can B not sell or give away own interest. o The settlers intent restricts B’s interest such that it can’t be transferred voluntarily or to creditors. then it becomes assets in B’s hand like any other asset. Exception Creditors: • With spendthrift trust. o Once income gets distributed to B. • (2) Necessary Items o Creditors that have provided necessaries  Landlord which gave him place to live. o Wife and kids can come to trustee and enforce support rights.Fall 2006 . • All we are talking about is making it procedurally difficult for creditor. he can reach it like any other asset. o If creditor is fast enough to catch A while he still has it.Wills & Trusts Outline . not the trustee. o Obvious assumption: people that wrote these exceptions have bias in favor of trust L’s.  Instead of hoisting the responsibility on general society.  Want to encourage B’s to vindicate rights under trust instruments. o Settler’s intent isn’t any different – courts have just set up limits. o Possible for settler of trust to make beneficiary’s interest inalienable. He can’t shield from creditors claims. Creditors advance credit without realizing that he had no property of his own to collect. merchant that gave him clothes. o That lawyer is entitled to pierce spendthrift trust and to get paid if B has no other means to pay. • (1) Spouses and Children seeking support. o To the extent the income is there. lawyer wants to get paid for services.  If trustee has wrongfully refused to make distributions to cover necessaries. but the trustee can say that they don’t get it. no matter what trust instrument says.McCouch Spendthrift Trust: • Special about trusts: Unlike outright ownership. o The terms of the trust made the interest non-transferable • As a matter of trust terms itself. o Doesn’t come up all that often: trustee can’t deny B basic needs of sustenance.  If B has no place to live or clothing.

This is how settler’s normally do it Give discretion to trustee to limit B’s interest. they can foreclose on security. • Can disclaim any gift – trust. • Ex: banks to homebuyers: will take back a security interest. and not arms-length like contract. lifetime gift. Ascertainable right to periodic distribution. enacts statute that limits the categories and reaffirms the CL restrictive views. If debtor doesn’t pay back. and even to whom. the standard law is that even tort creditors don’t get to pierce ST clause. that can be reclaimed from trust. o This is first case to take R3d. o Victim can’t make other arrangements o Can’t choose not to be in accident. o Every other state that this has come up has reached the result that the tort B has NO remedy. If B has no entitlement to distribution in trust.Fall 2006 . individual debtors. He gets into car crash and causes lots of injuries. 96 . Often claims of reimbursement of medical or housing benefits. They can be given discretion to “sprinkle” income to the descendants.Wills & Trusts Outline . o R3d recognizes the 4 categories of preferred creditors.” Puts B more on par with creditors. Very effective in staving off claims of all creditors Puts B at disadvantage. they have no standing in better position. “If the spigots turned off. All that stands in between B and creditors is that ST clause. o No jurisdiction in country where tort creditor has recourse against beneficiary’s interest. o Or take out credit insurance and try to spread the risk . Beneficiary can always disclaim interest in trust just like in an outright will.McCouch o o Used to be primarily tax claims. Tort victim sues trust beneficiary and discovers he has no other assets except he’s living comfortably on trust his mother set up. etc. how much to distribute. b/c they could also be cut off. etc. EVEN if they are preferred creditors. Too late. o Tort creditors are particularly disadvantaged. They can protect themselves in other ways. Discretionary Trust: Spendthrift provision is NOT the only way to protect B’s from creditor claims: Spendthrift assumes that they’re entitled to receive some amount. They are involuntary creditors. • Most creditors have a variety of ways they can manage to avoid getting stiffed by specific. • As long as he goes through all the formalities. but leaves it open to courts to expand. • Sly Case: mother sets up ST trust for son. or Broad discretion to all or none to any of the B’s. • Then Miss. Spendthrift clauses have been recognized for a long time. will. can’t do it. then the discretionary trust can be re-opened to B. it’s off to everyone. • Aside from limited categories of creditors. Discretionary Trust: Gives trustee discretion as to when to make distribution. If creditors go away. • If he starts receiving income and then wants to cut off creditors later. o Tort creditors is one avenue. Tort Creditors: • One category where creditors don’t have avenues around it. • Should they honor settler’s intent? Or concern for effect on B? Or should we worry about creditors interest? o Tort victim is in much worse position. • Creditor’s haven’t objected too strongly o It doesn’t really matter to most creditors. B has no enforceable right against trustee unless trustee is abusing terms of discretion The creditors can only reach what B has. o They might just take security for the loan.

and no immediate contemplation of claims that might come up. No spendthrift clause. o Can’t get around it that easily. o What about creditors?  Settler’s creditors can reach max amount that could properly be distributed back to settler assuming max trustee discretion. L will be able to get court order compelling trustee to distribute income to L in order to satisfy. Delaware. o A few states that have modified rule. What result? • What kind of creditor is lawyer? Does it matter at this point? o Any creditor can reach any amount that A can receive. o As far as A’s life income interest goes.) S creates irrevocable trust of $1M with T as trustee. • If strawperson involved and clear crossing of transfers.  Those distributions are only at trustee’s discretion.  Places that don’t have a lot of trust business. or whether existing trust centers will be able to maintain their business and not be undercut. or order A to sell income interest and from the proceeds to pay L’s claim.Fall 2006 . o The trustee can refuse to make distributions and L would have to wait to get paid off by income interest. 97 . even if includes a DT or ST provision.  Cant set up own to shield from own creditors. Steps into A’s shoe. creditor can reach. o Setting up for each other’s benefits. o Debate raging whether those other places will start “race to the bottom” and do away with all these formalities.  So far. • Ex: create own trust at local bank and give bank as trustee discretion to give any principle to you.  None of the underlying trust property. L is in no better position than A would be.Wills & Trusts Outline . then the creditors could reach the trust corpus as well. A is to “receive all of the trust income for life. Not protected by ST. and has negligible assets apart from the trust interest. o This is a discretionary trust. o As to trust corpus: have no right to compel trustee to make distribution of trust property. but are seeking to get more out of state. But that doesn’t happen that often. A incurred over $50K in legal fees in a recent divorce. creditors can reach retained interests. and that person decides to set up trust to your benefit (independently) then they wont collapse that. courts usually assign trust to that original person. but they are like Alaska. so you gift it as trust. along with distributions of principle at such times and in such amounts as the trustee its sole discretion deems appropriate. valid gift (not fraudulent transfer). • What if we slapped on spendthrift clause? o Income interest – have to pay closer attention to what kind of claim. they seem to be fine. • If no strings attached gift to sibling etc.McCouch Spendthrift and discretionary can overlap. SDakota. • What that means: o People can’t protect own property as easily as when a family member creates trust in their benefit. in most of the big centers of trust business. creditors can still reach income interest as a matter of course. o If run up debt. • If $50K is far more than income reaches. Handout Problems: 1. o If L brings bill in equity. By the terms of the trust.  If trustee could terminate trust and give it back to B directly. any remaining principle is payable to A’s surviving issue. no prior understanding or arrangement. A’s lawyer brings a bill in equity against the trustee to compel payment from the trust property of the outstanding legal fees. o Courts will uncross transfers and say you are deemed to do it for your own benefit. but conceptually they are different.” At A’s death. Husbands and wives seeking to use each other as straw parties to protect each other: • Can’t do it for yourself. Self-Titled Trust: • B can set up trust for own benefit. Even though B can’t do it on own behalf. o Settler sets up trust and retains beneficial interest  He’s both settler and beneficiary  Protection is UNAVAILABLE against own creditors.

inter vivos trust does not have set of readily recognized statutory formalities.McCouch o If standard creditors claim. Revocation of Trusts. 98 . o Made it clear to lawyer that he wanted to revoke. o Can give settler right to revoke in any number of ways. • Unlike will. • Most well-drafted trusts will make it clear on the face of instrument: o (1) Whether settler contains power to revoke or not. o Will ambulatory as long as still alive. he can keep creditors from getting them either.Fall 2006 . Have to express intent. o He would be out of luck for both types of interest. and could be revoked at any time by settler giving notice to trustee or transferring stock. this is still discretionary trust. • Court says that he intended to revoke but didn’t do it by methods set out. o Not a claim to enforce support payments. o A is not actually the settler o Under CL of trusts. and in his will he declared stock separate property and leaving it to son. o You’re writing own charter. That is pretty good indication.  Not effective while alive. if A’s income interest is protected.  But CA has taken unusual approach and opened up this to creditor claims. o (2) If revocable.  Must say what steps to take in order to revoke.  Crucial to make it clear which kind.Wills & Trusts Outline . Termination.  Says we cant look at terms of will. No creditor can force A to exercise that discretion. • Methods of revocation o He clearly wanted to revoke. o What indications do we have that he intended to revoke? o Will with contrary intent. Does the stock pass under trust or was it revoked and passed by will? No revocation by terms of trust.  Contrary provision in will is not effective. o Didn’t comply with terms of trust he signed. o Look to default rule for methods of revocation: o CL – can revoke trust by any method in trust instrument. • What difference if A is sole trustee? o Has unlimited discretion to reach trust property. presumed irrevocable. or by any other reasonable method if trust instrument doesn’t specify. Wanted stock to go to son. o This will not be on exam. o Even if he holds the strings to open assets for his own benefit. Declared to be revocable. He got involved in divorce with wife and decided to leave stock to son instead. Canned trust declaration of stock. What do you do when trust instrument is silent (or ambiguous) about methods of revocation? • CL – unless indicated intent to be revocable. No recourse against trust principle. tear-out form.  Ignores provisions of will. o This is at the edge of beneficiary protection. if he doesn’t want to make distributions to himself. o This is just general creditors claim. Barnett: Pre-fabricated. ST clause would defeat that L’s remedy. o Would overlap with the discretionary provisions to reach corpus. Why??  Trust says nothing about revoking by will – not specified. is L a preferred creditor? o NOT here. • CA – default rule is opposite.  Can make trust revocable or irrevocable. Litigation did not involve protecting or enhancing A’s interest. will specify a method of revocation. R3d and CA Probate Code take different view:  In CA this would be treated as if A had set up trust for own benefit b/c holds sole discretion.

 Very slow trend to relax formal requirements to have all B’s consent. can beneficiaries who own all the trust property agree to terminate the trust. it is presumed to be REVOCABLE. in existence. o Here he had revocation methods on trust. but will is not enough. Claffen doctrine 99 .?  Courts have been willing to allow virtual representation  Guardian representing interests. • Have to determine they are all ascertained persons. How would Barnett come out? o He could have given written notice to self. • Material purpose is the real hurdle. o VERY difficult standard. o What do you do if beneficiaries are unascertained. o Usually ends up with some class that are unascertained (might even be unborn). R3d: only if there is NO method specified do we allow reasonable manifestation of intent. • Unanimity o Interests may or may not coincide. Provide written notice to her. Less safe than ever to think you know default rules with regard to revocation o Think about who trustee may be o Want something in writing o Want it to be clear whether instrument of revocation taking effect immediately during lifetime or whether ambulatory until death Early Termination or Modification of Trust: • Deviation o Trustee or beneficiary unhappy with trust terms goes into court and asks court to allow him to do something differently than what trust terms command or permit o Has been applied narrowly – only applied to administration o What must be met for deviation  Some circumstance not foreseen by settler • Runaway inflation • If irrevocable. provided that they:  (1) Agree unanimously  (2) All are competent and ascertained (they are all together). o Has to be OTHER THAN WILL.Wills & Trusts Outline .  Court clearly bending over backwards to carry out his intent. would probably get the stock. o Court is just trying to be equitable. and they don’t know to specify. or re-write terms? o YES. but usually its very hard. have to say so.  The person most interested is trustee. unborn.  Unless trust specifically makes method. but didn’t use any of them. CA §15400: Unless trust says differently. o If you want irrevocable.Fall 2006 . then written delivery to trustee is good enough. so they create problems for us. AND  (3) What they want to do doesn’t contravene any material purpose of the trust. even though trust said nothing about it. minors. and competent. Mrs. o Oral declarations don’t count in CA.McCouch • • • • •  Oral declarations to L was valid method of revocation. or? o (2) Trust can be revoked by a signed writing OTHER THAN WILL delivered to trustee during lifetime. CA §15401: Two methods: o (1) Exercise method of revocation specified in trust instrument and. etc. o Many use as will substitutes. or  Might allow one beneficiary that is similarly situated to give consent on behalf of unborn • If interests are sufficiently aligned. o Most trusts are going to be set up for long-term arrangements providing for several generations. o Very difficult to identify all beneficiaries and be sure you have them all together.

• Standard formulation: trustee administers the trust SOLELY for beneficiaries interests. then they can terminate. or no ST provision providing support for A. and re-write terms of trust. • Implies two separate limits: o (1) Trustee is absolutely prohibited from engaging in self-dealing. o o o WEEK 14 – END Fiduciary Administration: Fundamental Duties: Trustee’s obligations can be summarized in terms of: • Carrying out trusts intent • Administering Trust for benefit of beneficiaries (duty of loyalty) • Almost always trustee must invest – not just holding the property (prudent investment).Fall 2006 .  Most trustees won’t want to do it. ages. o Ex: trust property includes real estate to be sold. remainder to B.” • If A and B get together and decide to terminate trust. the doctrine does not permit early termination.  If settler is dead. and he wants to change his mind. he can do that. o Making trust property productive.Wills & Trusts Outline .  No one else has standing. Generally prohibited. If trustee buys the asset acting in individual capacity. 100 . or  Trustee acting on both sides -.almost impossible to compel early termination. • It is a good hypo example.  Once court becomes involved. and 30. Since made in installments and paid out at age 30. and doing so prudently • Duty of impartiality o Trustee is obligated to treat beneficiaries fairly. 25. B’s have all agreed. They will have misgivings and want to do job right. distributions of corpus at ages 20.  Courts don’t usually want to jump in. they can actually insulate trustee from liability by giving order.  Almost never happens without litigation. b/c original terms reflect his intent. o This is an important limitation. o (2) What is the Court’s role?  Court has no role to play as long as B’s agree. o The only examples that R3d gives that do NOT run afoul:  (1) Trust “income to A for life. Tug of war between settler and beneficiary. would termination interfere with material purpose?  YES – when you have schedule of distribution.  (2) Settler is still alive and consents to do it. that is a clear form of self-dealing. No court approval is required. and get present value.  Almost any term of a standard trust would reflect material purpose. there is NO ONE to complain. spendthrift provision.as fiduciary and participates in any type of transaction involving trust property where he is acting for own personal interests or someone else. Duty of Loyalty: • No way to eliminate the duty of loyalty – although trust terms can tailor or relax that duty. trustee discretion etc. • If no discretionary term or deferring of payments to ages. • Practical matter: two points: o (1) What is trustee’s role?  In theory.  If trustee resists they will likely try to compel a termination.McCouch Ex: trust – income to son. and B’s convince trustee to do it. • If all B’s and settler are unanimous. you can’t get consent .  Prevents beneficiaries from overriding and terminating early. • If S is dead. but probably wouldn’t happen.  Trustee has no option but to obey order.

 If you have no defense. • Levine was aware. o No incentive for trustee to get anywhere near self-dealing or conflict of interest. If he can persuade the court. o They were all amateurs. then no beneficiary will complain and its okay.Fall 2006 . notice to interested persons who have chance to be heard. then they are personally responsible to re-pay trust for whatever the property he undersold/profited from. if trustee engages in either. They make deal with local gallery. o Usually easy: sue trustee.  Assumes when trustee goes in. Expect executor/trustee use their discretion. and anthropology professor (Levine).  Trustee must make FULL disclosure of all relevant circumstances • What is relevant? What he thinks is relevant could be different from beneficiaries. He consulted L and they told him that a court would not give approval or advice on whether a sale was appropriate. Once self-dealing or conflict of interest. etc. The L didn’t really give answer. o Here the problem was not that artwork sold for less than value (although we could argue about that). He had attic full of hundreds of paintings not available on open market. under the “NO FURTHER INQUIRY” rule. the general rule is that the transaction – even if it was entered into good faith – it is voidable at the request of the beneficiary. the restrictions on that gift allowed kids to come in and challenge. investing trust funds in stock for own benefit. • Three executors – an art dealer (Rice). The same gallery agreed to buy some of his as well o Conflict of interest – intended to prevent not just sale by trustee personally. • Is there a conflict of interest? • Stamos was trying to get rid of his paintings too. o The deal involved 50% commission. • General rule: self dealing or conflict of interest: unless transaction authorized by terms of trust instrument. And by the time it came to trial. o What he was really asking is that he was stuck and he wasn’t comfy – what should he be doing to protect himself and make sure estate properly administered. • Trustee bears burden to make sure it was fair and reasonable in all respects. o Remedies: • Rothko: (pg. 666): left estate to charitable foundation. Don’t just trust the trustee. • General rule o (2) Trustee puts himself in position where there is a material conflict of interest. if it was fair and reasonable – o If he sold b-acre to himself and he sold it fair and reasonable. the terms of sale were fair and reasonable. or even if trustee acted in good faith. o The gallery was run and controlled by Rice. 101 . His kids weren’t happy with it. but to prevent the executors from using their position to enhance their welfare even in unrelated transactions. the ONLY two ways he can justify it: o (1) Advance court approval  Ex: Some reason why he has to sell property to himself. courts generally do not require whether the sale price was fair. it doesn’t matter. and NY said they had right to intestate share. • The beneficiaries sued. but didn’t make waves. The paintings would be sold off and foundation would pursue charitable aims. That part can be very difficult. • In most cases. court makes own investigation. and good for trust.Wills & Trusts Outline .McCouch Others: lending property to trust for his own benefit. o They decide to strike a deal – instead of public auction. the value of paintings went through the roof. an aspiring artist (Stamos). it will prevent any beneficiary coming in later and trying to attack it. all they care about is if there was a defense: • Court approval or beneficiary consent. They other executors decided to go along with it.  Once breach duty of loyalty. • Measuring damages: General rule: o To put the trust back in same position it would have been in if no breach of trust had occurred. charged with task of finding buyers for the mountain of artwork. Since this was charitable gift. o (2) Consent of ALL beneficiaries  The trustee has to locate all beneficiaries. The kids became the three heirs.

o Gives them incentive to max income. • We think its necessary for them to compensate. The really stiff barrier should scare them away. If you look at indirect benefits that trustees are in position to reap. but has to be reasonable. • Question is of reasonableness – performing services that justify compensation that it keeps. or if its gone way up in value and sale was improper. one way is to allow more flexible standard:  Don’t prohibit categorically from dealing with people they know  But to examine each case on merits. o Here. and the annual income they earn. etc. o Levine didn’t get good advice. to participate in managing trust and prevent cotrustees from wrongful conduct.  At least Rice and Stamos – they are jointly and severally on hook for full appreciation. all have inherent conflicts of interests. • That is ordinarily carved out as exception to conflict of interest. • Responsibility for others acts o What should Levine have done? o Every executor/trustee has duty to monitor own conduct. Its an incestuous culture. Fear that they will get indirect benefits never disclosed and hard to figure out/measure. o It would allow trustees to engage in transactions that would be beneficial on whole. • Argument that’s made: o Anybody who knew Rothko.McCouch As a practical matter.Wills & Trusts Outline . if there was a breach. it can be very hard to detect violations. even to a bonafide purchaser for fair price at time of sale. are they on hook for original value of paintings (we could argue about that). Trustees are generally entitled to reasonable compensation: • Conflict – he wants as much compensation as possible for as little time and interest.Fall 2006 . • Most commercial trustees will publish a fee schedule which entitles them to a fixed percentage of value of trust assets. • Are the costs too high? o Must write self and all other conflicting interests out of deal. o Broader Implications: • Holds fiduciaries to strict responsibilities. he should have gone to court. but not for appreciation because he didn’t have any conflict himself. they will complain only if sold for too low of a price. o Will not find someone reputable to make a favorable deal who doesn’t have a network of connections with galleries etc. o If he couldn’t talk them out of the deal. o But also gives them incentive to attract large trust business. o Have to deal in arms length. or the current value?  Appreciation damages. even if the transaction might have been good for the trust. o The response: we have a harsh prophylactic rule b/c there is a risk that beneficiaries as a class don’t have perfect info and trustees are subject to temptation. o Argument: if inherent conflicts of interests.  He should have gotten order to prevent co-executors from entering into the deal. Not personally at fault except that he didn’t prevent it. the trustee is personally liable for all appreciation until court gives decree. o Maybe it should be relaxed and make it a rebuttable presumption and look at each case. o The case stands for: if trustee breaches duty of loyalty (here flagrant conflict of interest) and the property has been sold. • Other side – it is very harsh. 102 . • Sounds like reform proposals in wills formalities: o Duty of loyalty does something similar – it overprotects.  Levine – liable for regular damages. if they made a sale in a way that was prohibited b/c violated duty of loyalty.  Get injunction.

o He should get fair. and caution in: o (1) Selecting agents  Look carefully at requirement of trust. o Question of delegation. • Doesn’t make sense today to say that its okay to put $50 in T-bills. recommendations. o (2) Retains some overall supervisory responsibility  Sets the grand strategy at some general level o (3) Monitoring the agents  Make sure they perform. some in publicly traded stock. some in private companies. That is low-risk but also low-return. which means that there is no particular investment that is categorically prohibited.McCouch • Today some banks have in-house staff to provide the services. but in some cases required. in tax exempts.  The notion that there are all sorts of factors to take into consideration. o CL – courts had notion as the prudent man as the standard. o (2) What’s reasonable distribution requirements  Is it life income for elderly widow – may make sense to give her regular stream of income.  The rule restores original flexibility instead of looking at each investment as prudent or speculative.  “Modern portfolio theory” – how does each investment fit into overall portfolio. be paying those agents out of his reasonable fee. etc. 103 . o To the extent that trustee is off-loading responsibility for managing specialized requirements. Where does that leave us for fiduciary obligations if no longer doing it himself? • If trustee exercises fair. fees. o Huge incentive to hire army of specialized agents. by implication.Fall 2006 . o Even discretionary ones – like investment. • He is not expected to be expert in all these fields. Even speculative assets may be permitted in proper context.  Trustee is not only permitted. and treated trust property in the same manner (informed judgments) then all it required was good judgment. etc.  What we have today is a notion that every trustee is required to meet standard of prudence. As long as trustee knew what he was doing and knew what other men of discretion did with own property. • Then he has satisfied his duty of prudence and can successfully delegate the trust functions. trustee is expected to take into consideration all relevant: o (1) Terms of trust  Might tell them to keep certain asset. they are also. to delegate those functions prudently to a trained agent. • What’s changed: o Not so much law on books as the practice of investing. o Today that looks simplistic. etc. • Instead most people would expect to have some trust assets in stock market. vs. o CL – trustee must perform all personally – but now by statute and by prudent investor rule – most states are coming around to the opposite view.Wills & Trusts Outline . Trust Investments: • What conduct is prohibited? • Uniform prudent investor rule: has been adopted in CA and most states. Now we look at the universe of available investments. Every investment has its risk. reasonable compensation for what he retains personally. • All the Act does is say that in making decisions. a trust that gives distributions to grandchildren who might be well-fixed for income and the goal is to grow capital value over time. Those days investments were prudent if they were not risky or speculative. skill. functions.

and will have similar effects on all equity in stock market. o Advantage – get market rate of return – investing in market at whole for very little cost. but if we allocate portfolio evenly between the two of them. they will off-set each other’s risks. o Underlying modern portfolio theory: 2 concepts: • (1) Relationship between risk and return o Investments are not just “safe” or “risky.  (2) MARKET risks • Some types of risks are likely to affect all markets in same way. o Only risk is more sunshine or more rain. There are no bright lines: 104 . o Market will reward you if you’re willing to assume higher level or risk over time. o For given expected level of return.” o Not enough to look at gov’t bonds or certain stocks and say “either its safe b/c its guaranteed and fixed level of income or that Kodak grew for years. but taken together they are a stable combination. o No matter how well trustee expects single stock to do – if they dump all money in it. o If terms of trust say that he has to keep it all in one stock. Some types of risks are compensated by market. • (2) Passive approach o Invest in market. so its safe. each investment is risky. o Levels of risk: Theory tries to distinguishes between:  (1) Firm SPECIFIC risks • The risks that are specific to a particular operation o Classic example is suntan lotions and umbrellas. o Or get stake in overall market and get index fund. On own. If you’re reasonably confident that over time it will appreciate. each of investments in isolation looks risky. Distinguishes which would do better.Fall 2006 . trustee is supposed to balance every other relevant circumstance:  Taxes  Inflation • Informed prudence investor must have good judgment and knack for navigating all different investment products.  Allow small investors to achieve instant diversification. Question is if they made an informed decision taking into account what an informed investor will do.Wills & Trusts Outline . How do you diversify? • (1) Actively picking stocks.  Can decide to go into a particular sector and the firm will offer you sector funds.” o The question is not whether its risky or not – just what kind of risk and the level. and then it falls and the beneficiaries say that it was imprudent. o Mutual funds. • For a given level of risk. In some cases court will allow you to do that if it looks like circumstances might change or it is imprudent to stick with the trust investment procedure. o Best way of getting optimal return is to diversify. o Ex: inflation picks up.McCouch (3) since no particular investments or approaches that are categorically good or bad. Can’t be diversified away. o How does the risk of an asset interact with other investments in same portfolio. they are probably getting themselves in trouble. Often good idea to seek permission from court to deviate from investment instructions. o Costly – requires lots of research on own part or paying someone else. you can minimize the overall volatility by balancing investments with off-setting risks.

it will effect these beneficiaries. o Ex: trust to pay out all income to beneficiary. or making decisions that aren’t properly documented. Over time. • Major problem that trustees’ run into: o Not that they lost money.g. and then all corpus to the remaindermen.McCouch • We end up under prudent investor rule a question of process: o How did he make the decision. E. Not good policy. To balance the interest while having prudent investment: o Define current b’s share by looking at total return. o If rest of the trust is performing fine. o If we allowed trustee to offset losses from proper investments to other improper. that is not their fault. inconsistent interests – trustee has to treat fairly and mediate competing interests. Bet on something twice as risky to cover past losses. any loss makes trustee personally liable.  Have to review the portfolio and pay attention to what’s happening.Wills & Trusts Outline . • If it was left in portfolio because trustee never thought about it – breach of trust in purchasing or maintaining. Future Interests Most future interests are created in trusts and fall into fairly well-defined patterns: • Trust arrangements allow carving up of beneficiary enjoyments (present and future). factors. • Modern statutes contemplate different arrangement than income to one set. o Competing. o Trustee can pursue strategy for overall return instead of worrying if its going to be current or appreciate later. Duty of Impartiality: • (1) Trustee has to decide when to make distributions o Cant favor/cut off because you like/dislike. o Hard to make sure you are being far to different classes of beneficiary. • Losing investments will be tested to see if they were proper or not o Part of sensible. UNITRUST arrangement balances present and future b’s interests as if partners in total return of trust. o The anti-netting rule – holding trustee responsible for improper losses still holds. coherent strategy o Balance of risks o Hedging investment risks. o Try to erase differences and combine returns so that categorization doesn’t matter. but making prudent decisions. o Most trustees that run into trouble – the problem is not that they lost money but failed to pay enough attention to what they were doing. and getting best possible return in most efficient way. we shouldn’t be using those to subsidize trustee’s carelessness with respect to other investments • What about gains from imprudent bets? o Went to Vegas and gambled? o Cannot offset. instead of leveraging them. – over time the income beneficiary would get more than the remaindermen. 105 .  Must document discussions. o Basic fiduciary obligation to treat fairly. o If the decision turns out not to be a winner.Fall 2006 . o Trustee less likely to be caught in a bad place. whatever the trustee strategy he chooses. That could be viewed as unfair to remainders. • (2) Investments o Deciding to invest – that decision has to be made impartially. we are encouraging them to gamble. principle to another set of beneficiaries. o Cannot offset losses from one imprudent investment from the gains. o Look at together as total return on trust property. o Split fairly b/w current and future is by giving current a percentage share each year of value of trust. etc for how decision was reached.

• (4) EXECUTORY INTEREST o Any kind of future interest that takes effect after a gap in time or that divests some other transferee’s future interest o Condition – wife gets income until she remarries. • At planning stage.McCouch Present enjoyment • limited term of time – usually measured by lifetime of B’s or for fixed term of years • Usually income to someone for life. • Executory interests are NEVER vested.  (2) Taker is unborn or unascertained. when entitled to receive. Vesting: • Can make difference between interest that’s valid or void. 106 . o Always pass rule of perpetuities. and how much. • Rule against perpetuities strikes down interests that vests remotely. • (2) REVERSION. what do we do with gaps. and deciding if interests are valid.Fall 2006 . • Spot them and resolve them. property to children. • May be additional children/gkids born. • Distinguish: condition subsequent would cut off or divest. o If property is to return to original owner: o If T is still alive and creates inter vivos trust and property goes to him if he survives her. etc. No matter what kinds of condition. o Can’t divest anybody else’s interest. • Reversions are always vested. it may pay to get familiar with the rule or find someone who does understand it. • (3) REMAINDER o Any future interest created in someone other than transferor. o Can’t be an interest in X that springs into existence 10 yrs from date of death – that wont work. Rule Against Perpetuities – have to worry about validity. o They are non-vested. and avoid uncertainty. o Life interest in settler’s widow. they are vested. Identifying the Interest: • (1) LIFE ESTATE o Present interest measured by duration of life.” Identify the interest created: • Determine who gets what. remainder at death to issue THEN LIVING. resolve those issues accurately and correctly. • Who is member of class. o Interest must come into effect at natural end of all prior interests. • If not in planning stage. remainder to issue. with the remainder to my issue. and then remainder to someone else (or class). o The children’s interest cuts short (divests) wife’s interest. • “To my wife for life. If she remarries. • Income to widow for life. • Remainders can be vested or contingent: o Contingent  (1) Remainder subject to a condition PRECEDENT. so must always be tested for perpetuities problems. • To my children who survive me • To children who reach 21. what time. litigation. • Usually related to age or survival.Wills & Trusts Outline .

o B – remainder subject to divestment. but to C’s. o B – Contingent remainder o C – Alternative contingent remainder. remainder to B. but don’t know if there will be more. 107 . o It divests another transferees interest. o The interest would go back to G – there’s a gap that doesn’t say what happens to property if condition is not met. o Assume B doesn’t have to survive. his interest fails. o C – executory interest. o Subject to condition precedent. but are identified differently.  (2) Vested subject to divestment: • Income to A for life. • As long as he’s alive. there is still possibility of additional children. o If you want to impose survival conditions. • Gift to class of people where the class is still open. Condition subsequent. it becomes part of B’s estate and will pass by will/intestacy. o If no EXPRESS condition for survival. • • Don’t know if they’ve died etc. o If B dies first. • No condition attached to B’s remainder • B is identified.  (3) Subject to open • Income to A for life. o No express survival requirement for C: o The property goes through C’s estate if B and C pre-decease A. • Nothing that could cut off or divest B’s interest. • (4) To B. o One remainder cannot divest another remainder. • (2) To B if B survives A o Contingent remainder. • (3) To B if B survives A. o Not subject to conditions and B is ascertained.McCouch o Vested  (1) Indefeasibly vested: • To pay income to A for life. but if B fails to survive A then to C. and as condition precedent so it will prompt you to ask what happens if B doesn’t survive A. and if B fails to survive A then to C. o Will take effect at A’s death no matter when A dies – even if B died first. Implied reversion. Exact takers are unascertained. remainder to B. o He gets it immediately – not attached to description of B’s interest. o If B dies first.Wills & Trusts Outline . o Something that could cause B’s interest to fail – but attached to C’s interest. Gives you chance to do something with it and fill in gap. named. Condition precedent. write it on face of instrument. HANDOUT – Classification of Future Interests: G conveys to A for life. o Notice: (3) and (4) are pretty much the same. o C takes property only if B is already dead. • Subject to condition SUBSEQUENT. but if B fails to pass the bar exam… • If there is some condition attached. it won’t be implied. remainder distributed to children.Fall 2006 . that could divest B’s interest. • There are children. then • (1) to B o Indefeasibly vested remainder.

 In most cases. Class Gifts: • Implies that the numbers of members of class can increase or decrease. o What are interests of unborn children? They have contingent remainder. dispose of entire property that way. Unascertained. could have class that closes at different time than distribution. and how they take share of property. • Two variations: o (1) Determining time when class closes. it will close when any existing class member becomes entitled to his share of property. o Their remainders vest when A dies and then condition precedent is removed. and how.  Can apply on individual basis for class member. o Ex: A’s children. o Rule of Convenience: rule courts developed to allow trustees/administrators to determine when class closes. leave it open until it closes naturally. its that they survive to time of distribution or some age. the takers are unascertained.Wills & Trusts Outline . 108 . • (8) To A’s children or their issue • (9) To A’s children. • (6) To A’s surviving children o Contingent remainder. o Contingent on survival. you take a snapshot when property is to be distributed.  When anyone is entitled to share of property. the issue of any deceased child to take such child’s share • (10) To A’s issue and if A dies without issue to B. Very straight-forward:  If a class has not already closed naturally. we look at time of A’s death for his descendants. just what form of rep. closes naturally when parent dies. plus a gift over by lines of descent to issue of any deceased taker. close the class. what conditions are imposed on that members’ entitlement?  Usually. o If no existing members that can claim share. o Child has a vested remainder subject to partial divestment because he is member of class.Fall 2006 . • Won’t know until A’s death how the property is to be divided. among how many people and who is in class.  Theoretically.  Time for determining that vesting does not necessarily have to be same time as class closing. o When property has to be divided – at that point it would be inconvenient to hold class open. o Probably take by some form of representation as is described by intestacy statutes. when A’s life estate terminates naturally. any child not in gestation. o Gift to group of people where the group may either increase or decrease. • Leaving to issue is tricky o CL: A’s children can have children and continue line of descendants. o Once A dies.  At what time can you say that the max membership of class has been established?  Anyone born after doesn’t get a share. Assume at CL that A is capable of having additional children as long as A is alive. o Gift to issue/descendants implies that there is a survival requirement. Class Closing: • Class can close naturally when it is physically impossible for more members to come into existence.McCouch • (5) To A’s children o Have one or more of the children been born? o The existing children have vested subject to open. • (7) To A’s issue o If the gift is to issue. we know for certain who gets the shares. o As long as A has some living descendants. o (2) With respect to class members. • Main problem: determining at what time. o Until A dies. o Gift takes effect immediately upon A’s death.

• (c) To A for life. o Other children that aren’t 21 are entitled to their share. what could happen to postpone vesting? 109 . o If one dies at 18. Rule Against Perpetuities: CL form: voids future interests that might vest remotely. o The failed shares gets re-divided among other members of class that reach 21. and A is living but has to survive until estate is probated. but the vesting of each interest may occur at different times.” • Whenever future interest. o When T dies closes the class.  If not vested. o As soon as has 21 yr old child. within 21 yrs of some life or being within creation of interest. o Up to 21 yrs after any life or being. but before A did? That child had issue. • Have to make sure all conditions are satisfied. o What if A had child who died after T died. o If die before 21. T leaves Blackacre: • (a) To A’s children o A is alive. o Class closing: once A’s dead. • (e) To A’s children when the youngest reaches age 21. Class is still open. Do they get gift? o Look at each child’s interest to see if met requirement o Child not required to survive. o Class can close at one point. or within 21 yrs after that person’s lifetime. o No one at T’s death entitled to claim immediately. his share fails. must determine time of creation o (2) What is latest time that it can vest?  If within 21 yrs after person’s life. o Any child in existence after T’s death and up to A’s death and divide accordingly. • (d) To A for life. Handout: T dies. share is re-divided among other class members. o (3) Who can serve as validating lifetime?  Problems: 1-4 on handout • (1) If you have gift to A. In T’s will.McCouch Conditions on Class Members: • Conditions apply individually to each member. if at all. future interests created and classify. but doesn’t meet condition. that is fine. We assume A can’t have anymore children.Wills & Trusts Outline . then that’s cool. o Distributable to kids at that point too. He was a class member. o To extent that its already vested. • Ex: “No interest is valid unless it must vest. Closes naturally. • Applying Rule o (1) Identify time of creation. but only when they get to 21. o Same as C. survived by A and 5-yr old named X. o If A leaves children all under age 21 – wait until those children are 21 before vested. No express survival requirement. then to A’s children who reach 21. class is not yet closed. Class closes naturally at A’s death. • With respect to each created. identify all present. the question is what is the latest possible time that it will vest or be defeated? o If contingencies are resolved within some identifiable existing person’s lifetime. the class closes. the rule is automatically satisfied.Fall 2006 . • (b) To A’s children who reach age 21 o Existing child who isn’t 21. then to A’s children o Gift postponed until A dies.

Case briefs OLD EXAMS ON FILE: shows what issues he’s likely to ask. o Lots of statutory material questions. and want to make sure that none of those future interests might vest remotely. Each interest will vest when they come into existence. then you have 90 yrs o wait and see if it vests and fails. • (2) Income to A’s widow for life with remainder to A’s children: o Remainder is vested when all children are vested. • Multiple choice: 30-35 questions. Commercial outlines. • He won’t talk about the exam questions. o Up until then it might remain open. • Take them with time constraints. o The latest time the class gift is at A’s death.Wills & Trusts Outline . Outline. o This can create problems – remainder to A’s issue then living – that is a condition precedent on “then living” which may not be resolved until her death. Solutions: • (1) Do it yourself drafting: o If you are uncertain about future interests in trust distributions. then that would violate. A is validating life. then gift fails. but class of after-born takers that depends on some event that might not happen for a long time. • (2) Uniform Statutory Rule: CA o Didn’t repeal CL – superimposes separate 90 yr fixed period onto the rule. Weds afternoon. If she wasn’t in existence. If A is still living. • Essay – several issues. Monday.” They might be living when he dies. o If an interest is not valid under CL rule. This is fine. Here. and say that if the trust has not already terminated by own terms when last survivor of these people dies (21 yrs after) the trust will terminate. 110 . and marries someone not yet born – very young girl – she becomes his widow. Either right or wrong. He doesn’t have model answers. If still subject to some unresolved contingency. At A’s death. Usually room for some discussion to get to answer. If A is dead.Fall 2006 . Book. and everyone has to wait until her death to know if interests are vested. Two parts: 50% each: time should probably be split equally as well. Bring CA statute. What if A gets married after T dies. but will answer questions about the specific topics and how to deal with it. Just draft a savings clause:  Specify a group of lives in being (existing people). Specify what to do with it. Trying to find issues on bright-line basis. all of whom are in existence at time trust is to take effect. o o o o o o o Email: gmccouch@sandiego. o Designed to be difficult. Make it on some person who is living. the court will reform trust and decide how it should be distributed to conform to likely intent. about 90 mins. o Don’t make contingent on survival of probate decree. gift is good because we only care about A. that class will close. o Not desirable – who knows what settler wanted 90 yrs from now.edu 619-260-7716 (home) 543-1261 He’ll be here Friday.McCouch  What happens if T dies and everyone else dies before will is probated? Then probate could go on for centuries – long past the rule’s period. its easy to make sure they wont. Would not work “to gkids who are living at time estate is probated. then A takes.

• Don’t reiterate question or tell him what the rule is. • If you think you see problems/ambiguities.McCouch Read FACTS CAREFULLY – gives relevant facts. rule will probably come out via analysis. call attention to it. • Short answer/essay (3 short answers). o Tell him issue by issue how you think it comes out and why. • Organize it well and make sure answer shows where you’re going. o Lots of questions will be inviting you into traps – looks like right outcome for wrong reason. o Analysis. If you think you spot a problem/ambiguity/mistake. discuss and analyze them. Focus on ANALYSIS. Use judgment. and UPC courts have come out with an answer. • Read facts and the question CAREFULLY. mark note in margin to professor. Be careful about time constraints. If CA statute follows the UPC. don’t do that readily. answer question you think being asked Won’t hesitate to ask about whether a fiduciary invested reasonably.Wills & Trusts Outline . Those are more likely to be in essay so that there is discussion. or something generally about future interests/rule against perps. 111 .Fall 2006 . that will help apply what court’s will come to in CA. • For those that aren’t in supplement. o o Assume CA law applies – only responsible for the statutory supplement that he gave us. • Spot issues. But this is unlikely. Pay attention to CA and UPC in preparing for exam. Pay close attention to what’s being asked. then look to CL or case law. Get right into the issue. arguments. o Probably 3-4 issues worth discussing in each problem. conclusion. Think again first.