TWELFTH EDITION

BUSINESS LAW
TEXT AND CASES
Legal, Ethical, Global, and Corporate Environment

Clarkson 
Miller 
Cross

CHAPTER 52 WILLS AND

TRUSTS
 § 1: WILLS
 Will provides for a Testamentary
disposition of property.
 A will is the final declaration of how a
person desires to have his or her property
disposed of after death. 

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 WILLS
 Person who dies with a will, dies
testate (intestate without a will).
 Executor: personal representative named in
a will.
 Administrator: personal representative
appointed by the court when person dies
without a will.

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 WILLS
 Laws Governing Wills.
 Probate Laws (vary widely among states).
 To probate a will means to establish its
validity and carry the administration of the
estate through a process supervised by a
probate court.
 Uniform Probate Code.

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 WILLS
 Gifts by Will. Devise: gift of real estate.
Bequest or Legacy: gift of personal
property.
 Types of Gifts: specific, general, or
residuary .
 Abatement.
 Lapsed Legacies.

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 WILLS
 Requirements for a Valid Will.
 Testamentary Capacity and Intent: requires
a “sound-mind” and testamentary intent.
 CASE 52.1 Shaw Family Archives, Ltd. v
CMG Worldwide, Inc. (2007). Why didn’t
Monroe have the capacity to bequeath the
right of her likeness?

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 WILLS
 Requirements for a Valid Will (cont’d).
 Writing Requirements: can be handwritten,
or holographic will (but nuncupative (oral)
will is possible). Signature Requirements: at
least two witnesses, so will is ‘self-proving.’
 Witness Requirements. 

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 WILLS
 Requirements for a Valid Will (cont’d).
 Publication Requirements: not required
under the UPC.
 Revocation of Wills: executed will is
revocable by the maker anytime before
death.
 Revocation by Physical Act. 

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 WILLS
 Revocation of Wills (continued).
 CASE 52.2 Peterson v. Harrell (2010). Can
a provision be canceled without revoking
the entire will?
 Revocation by Subsequent Writing: called a
codicil.
 Revocation by Operation of Law.

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 WILLS
 Rights under a Will. The law imposes
certain limitations on the way a person
can dispose of property in a will.
 Beneficiaries can renounce (disclaim) their
shares.
 Spouses in some states can renounce what
is given them in the will and elect to take
the forced share.
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 WILLS
 Probate Procedures.
 Informal Probate Proceedings: Family
Settlement Agreements, and Small Estates.
 Formal Probate Proceedings: larger estates,
guardianship appointment, and trusts for
minors or incompetent persons.

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 WILLS
 Property Transfers outside the
Probate Process.
 Living Trusts.
 Joint Ownership of Property.
 Gifts Intervivos (while one is alive).
 Life Insurance Policies.
 Individual Retirement Accounts (IRA).

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 § 2: INTESTACY LAWS
 Statutes of descent and distribution
which attempt to carry out the likely
intent and wished of the decedent
who died without a will.
 Surviving Spouse and Children.
 Surviving spouse usually receives ½ of the
estate if there is a surviving child.

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 INTESTACY LAWS
 Surviving Spouse & Children (cont’d).
 Surviving spouse usually receives only ½ of
the estate, 1/3 if two or more children, 1/2
if one surviving child, or entire estate if no
children or grandchildren.
 If no surviving spouse or child the order of
inheritance is: lineal descendants, and
then collateral heirs (if no lineal
descendants).
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 INTESTACY LAWS
 Stepchildren, Adopted Children,
and Illegitimate Children.
 Stepchildren -- not considered children of
deceased.
 Adopted children -- considered children of
deceased.
 Illegitimate -- must prove paternity.

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 INTESTACY LAWS
 Distribution to Grandchildren.
 Per stirpes distribution: heirs take the share
their deceased parent would have taken had
that parent lived. 

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 INTESTACY LAWS
 Distribution to Grandchildren.
 Per capita distribution: each person takes an
equal share of the estate.

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 § 3: TRUSTS
 A trust is any arrangement whereby
property (real or personal) is held
by one party for the benefit of
another.
 Essential Elements: designated
beneficiary, designated trustee, funds
sufficiently identified to enable title to pass
to the trustee, actual delivery to the trustee
with the intention of passing title.
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 TRUSTS
 Express Trusts.
 Living Trusts: revocable living trusts,
irrevocable living trusts.
 Testamentary Trusts.
 Charitable Trusts.
 Spendthrift Trusts.
 Totten Trusts.

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 TRUSTS
 Implied Trusts.
 Constructive Trusts: arises by operation of
the law in the interest of equity and
fairness.
 CASE 52.3 Garrigus v. Viarengo (2009).
What circumstances prompted the court to
create a constructive trust?

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 TRUSTS
 Implied Trusts (continued).
 Resulting Trusts.

 The Trustee: person holding trust

property.
 Trustee’s Duties: honesty, good faith, and
prudence in administering the trust and
high degree of loyalty to beneficiaries. 

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 TRUSTS
 The Trustee (continued).
 Trustee’s Powers: state law governs in the
absence of specific language in will or
instrument.
 Allocation Between Principal and Income.


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 TRUSTS
 Trust Termination.
 Trust ends when expressly specified in
trust; if trust does not provide specification
of termination, trust doesn’t end at death
of beneficiary or trustee, when its purpose
has been fulfilled, or when purpose
becomes illegal or impossible.

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 § 4: OTHER ESTATE PLANNING
ISSUES
 Power of Attorney.
 Durable Power of Attorney.
 Health Care Power of Attorney.

 Living Will: advanced health directive

that allows a person to control what
medical treatment they will receive
after a serious accident or illness.

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