Rev'cbl Trust is techincally an inter vivos

Non-Probate Assets NOTE: The provisions of UPC 2-700 et. seq. are
transfer; so wills act formalities do not
Two Main Kinds: (i) UTC Revocable trusts, per the ONLY REASON, statutorily, that these are
apply.
UPC 2-602; and (ii) UPC 2-706 Non-Testamentary not considered probate assets.
Non-Probate by function of C/L
Dispositoins. Non-probate by function of Statute.

Revocable Trusts

Modern Rule: A trust is presumed revocable Pour-Over Wills (i) Life Insurance Policies: Pays amount to named beneficiary at the death of the
unless devlared otherwise. Fully amendable, policyholder.
unless otherwiswe declared. UTC 602: Same, but Def: Set creates
(goes a bit farther says AMENDABLE fully, even trust without
w/o provi) res. Settlor Two Term: Covers for number Whole: Covers entirel ife, investment
executes will Kinds. of years. No saving product. Becomes "endowed" and then
[Traditional: Presumed irrevocable unless (valid) devises feature nor cash value. pays on death.
express/implied resev by settlor ] residue to the
Change to bene must be Exception: If INS co. violates own policy
trust [ie the will Req:
done per K's terms, an on alteration; court will permit
pours over into a K
Rule: Subsidiary Law of Wills alteration in a will is not policyholder's good faith attempt to
trust if anything formal.
effective. comply and allow redistirbution by will.
left[
B/c revocable trusts mirror wills in effect and use;
trend is to APPLY SAME RULES. [Also Wills -No test. formals; -Will disp will NOT effect life ins policy.
Modern Rule: Act?
abatement and Ademption]
Valid revocable
trust, 3rd -Creditors may not access; -Divorce does not extinguish right;
Capacity: Modern. To create, amend, revoke, notwithstanding Ptys -Forced share does not reach.
or add property--or direct actions of lack of prop.
trustee--need SAME capacity as that to make
Upc 2-511 "Test.
a will. (ii) Pension and Retirement Plans: Benefits of use: (1) Tax deferred contributions;
Additions to
Trusts. (2) earnings on qualified investements accure and compound (tax deferred); (3)
Present Interests lower tax bracket on the retirement side.
-Beneficiary's Rights: Maj. Like an heir
expectant, beneficiary has NO INTEREST until BENEFIT: B/c this is
trust becomes IRREVOCABLE. Mirrors rights not a true test. Definied Benefit Plan: Defined Contribution plan. Individual
of devisee. [no standing to challng]. trust, but instead is Retired employee gest Employer/employee make Retirement
-[OLD RULE]: Present interest. - Presnt considered a IV trust regular penion check for contributions to specific account Account (IRA)
interest must pass during life, giving -- does not need to life (annuity) or J&S for the employee -- employee K b/w acct holder
enforcement rights re:waste (otherwise is be probated. lives of employee and makes investment decisions. and custodial
testamentary and needs formalities) spouse. institution
(Even though the PASSES AT DEATH outside of
-Trustees' Duties: Owed only to Settlor, until property itself is NOTHING PASSES AT probate to designated Remainder passes
irrevocable. Only Settlor may enforce the trust gifted from the DEATH. beneficiary. outside of probate
duties. probate estate)
ERISA Limitations: Due to potential for abuse (tax), benefits may not be
Creditors and Spouses assigned or alienated.
Spousal Rights: Modern trent to sever will substitutes w/ divorce. NOTE: This defeats creditors prior to garnishment (attack at distrib).
Subject to forced share PREEMPTION: Intestate default rules are OVERRIDEN by ERISA -- ie
erisa does NOT revoke on divorce. controls.
Creditors' Rights:
Traditional Rule: No recourse against proeprty in settlors' revocable
trust UNLESS he was beneficiary. Alteration by WIlls: Change of beneficiary CAN be possible, but must be
Modern Rule: Trust property is subject to claims of settlor's creditors specifically identified as such.
in life and death. [IFF a) creditors use Probate Assets before
accessing trust AND b) Only those assets that settlro had enough
contorl over as would have enabled him to use for own benefit. (iii) Pay-on-Death Contracts and Accounts:

Future Interests in Revocable Trust Totten Trust: Joint Accounts: Demand account held by > 2
Settlor/grantor places money parties: status det. by INTENT.
Survivorship (120 hr rule) + Anti-Lapse (if Die b4 120 -> intestate into account with (i) Joint & Surv. Acct: Either person may withdraw,
heirs & not probate estate): UPC 2-207 applies antilapse to future instructions that it shall be survivor solely owns balance of account [J&S =
interests in trusts [settlro treated as Test]. Implications. passed to named nonprobate];
(1) Implied Condit. of Survival. -- All future interests in trust are beneficiary. Owner of acct (ii) Disguised PoD Account: If A opens joint acct w/
contingent on beneficiary's sruvival to distrib.; acts as trustee. b--intending only that B recieve upon A's death (B
(2) Substitute gift in Descendants -- If remainder benefi. does NOT "[Depositor], in trust for not given demand with. pwr, til deat);
survive to date, substitute [bene]. (iii) Convenience Account: A opens joint bank acct
Effect: Non-testametnary w/ B, with intention that B have power to withdraw
trust w/ test effect. for A's convenience, but not for other purpose suntil
Other Inter Viv w/ Test Effect. Ownshp Intrst: A's death.
(1) Belongs to depositor [if Ambiguous Intent Problem: When joint account is
Gift or Deed: Joint Ten w/ multiple, own only own established w/ funds of one person -->
Intestacy Gaming Schemes.
Ideal for RoS: deposit]; (2) Trustee has PRESUMPTION that the account is present gift
personal Sub. law of wills exclusive withdrawal of funds (and not a will-substitute device).
property -- not does not apply. Be/Make right during right (no J&S default if powers not limited or intent clearly
for real Marriage:
Adoption: If no fiduciary duty to bene); (3) manifest.
property, b/c Create with Can marry
other iss. -> Bene has no rights until
deed must be you & intended someone Ownership: Inter viv (proporitonal to net
reciprocal death of settllor.
unless recipient. real quick to contributions); any party may withdraw all funds.
complete Avail to creditors.
Transfer on give
bequest b/w Lapse: Anti lapse statute
Death Deed in Crteditors may intestate or Survivorship Rights: Some states PRESUME
single parent DOES NOT apply. Reverts
jur. levy. forced share survivor rights; others opposite (if no presumption,
and single kid to the Settlor's estate as
goes to estate of decedent)
lapse.