Legal Three

Wills & Trusts Attack Sheet for the California Bar Exam

—

by

esquire
in , , ,

WILLS – ROADMAP

  1. Execution of Wills

    1. Attested Wills: (1) in writing (2) signed by T (3) in presence of 2 witnesses (4) who also sign

    2. Holographic Wills: (1) signed by T, (2) material provisions in T’s own handwriting

      1. Extrinsic evidence is admissible to determine T’s intent

      2. Date issues: inconsistent provisions, capacity

  2. Enforcement of Wills

    1. Incapacity (under 18, unable to understand extent of property, know bounty) → will invalid

    2. Insane delusion (false belief, product of sick mind, affected will) → only affected part invalid

    3. Fraud in the execution (forged signature, didn’t know it was a will) → will invalid

    4. Fraud in inducement (misrepresentation effects content) → only affected part invalid

    5. Undue influence (3 types) → generally only affected part invalid

      1. Prima Facie Case: (1) T has a weakness makes him susceptible; (2) wrongdoer had access to T, (4) wrongful act gets the gift, (5) unnatural result

      2. Presumption: (1) confidential relationship, (2) wrongful act gets gift, (3) unnatural result

      3. CA – Statutory: gift to (1) drafter, (2) person w/ relation to drafter, (3) person in fiduciary relationship w/ T who also drafted [devisee gets only their intestate share unless review by independent atty who counsels T].

    6. Mistake – words left out → no relief, court will not re-write a will

    7. Mistake – words added → court will strike out those words

    8. Mistake in inducement (act b/c erroneous belief) → no relief unless mistake + intent on face

    9. Mistake in description (ambiguity) → court will allow parol evidence to determine T’s intent

  3. Revocation of Wills

    1. Revocation: by (1) subsequent will or codicil (explicit or implicit), (2) physical act (need simultaneous intent to revoke), (3) operation of law (omitted child/spouse or divorce/annulment)

    2. Dependent Relative Revocation (DRR): cancels a revocation where T revoked based on mistaken belief that a subsequent will or codicil effectuated his intent. If 2nd will does not effectuate T’s intent, the first will was not revoked.

    3. Ademption: where T has devised specially described property and that property is not owned by T at death, the specific gift is deemed revoked and beneficiary takes nothing unless there is evidence that T intended a general gift.

    4. By satisfaction: an inter-vivos gift to B is deducted from the devise, where the T express in a written document that she intended the gift to be in satisfaction of the devise.

    5. By advancement: an inter-vivos gift to an heir apparent is deducted from the donnee’s intestate share if the donor’s intent is expressed in a written document executed by donor and donnee.

  4. Components of Wills

    1. Republication by codicil: will speaks at date of codicil

    2. Integration: (1) papers present at execution, (2) with intent to incorporate

    3. Incorporation by reference: (1) writing in existence at execution, (2) will shows intent to execute, (3) writing sufficiently described in the will

    4. Facts of independent significance: who a B is, or what gift is given, may be given meaning by facts of significance independent from T’s will. Allows the court to fill in the blanks in T’s will w/ parol evidence that is trustworthy.

    5. Pour-over wills: where part or all of T’s estate is devised to the trustee of an inter-vivos trust that trust instrument may be admitted into probate – and the pour over provisions effectuated – via (1) incorporation by reference or (2) independent significance or (3) Uniform Testamentary Additions to Trusts Act – as long as you have a valid trust, which was executed before or concurrently w/ the execution of the T’s will, the pour-over provision is valid by statute.

  5. Interpretation of Wills

    1. Rule of lapse: if the beneficiary does not survive T, beneficiaries’ gift lapses, or fails, unless T expresses a contrary intent in the will. Passes by residual; if none by intestacy.

      1. If class gifts, only surviving class members take b/c the will speaks at the time of the T’s death. Deceased class members share will be deemed to have lapsed.

    2. California’s Anti-Lapse Statute: A deceased legatee who is a blood relative of the T or the T’s spouse takes by representation. Issue of a predeceased devisee may step into the shoes of the devisee, unless will provides otherwise.

  1. Intestate Succession

    1. Share of surviving spouse: (1) all CP, (2) all quasi-CP, (3) all, ½ or ⅓ of SP

    2. Share not passing to surviving spouse: (1) issue, (2) parents, (3) issue of parents (siblings), (4) grandparents, etc. Distribution:

      1. § 240: at 1st level → shares to all living persons, at 2nd level → shares to all living and deceased members of that generation who leave heirs.

      2. Per stirpes: distribute to all at 1st level (including deceased). The issue takes in rep.

    3. Special problems: adoption, stepchildren, foster-children, advancements.

    4. Simultaneous death: must prove by clear and convincing evidence heir (or beneficiary) survived decedent (or testator) by 120 hours

  2. Rights of Surviving Spouse and Children

    1. Pretermitted spouse: a will executed prior to marriage, which omits the surviving spouse is revoked as to that spouse, and she/he will receive her instate share of assets (D’s share of CP and quasi-CP plus up to ½ of D’s SP). Unless: (1) omission was intentional as shown in will, (2) D provided for spouse by other transfer, or (3) spouse made valid agreement waiving right to share in D’s estate.

    2. Pretermitted child: a will executed prior to birth or adoption of a child which omits that child is revoked as to that child, and she/he will receiver her instate share of assets. Unless (1) omission was intentional as shown in will, (2) D provided for child by other transfer, or (3) D evidenced plan that child’s other parent would take financial care of all the couple’s children.

  3. Bars to Succession

    1. Homicide: a person who feloniously and intentionally kills decedent is not entitled to any benefit from D’s estate by will, trust, intestacy, life insurance, joint tenancy, etc.

    2. Elder Abuse: a person who is found liable by clear and convincing evidence of abuse will be treated as s/he predeceased decedent. Includes physical abuse, neglect or fiduciary abuse.

    3. No contest clause: will be enforced unless B, with reasonable cause, brings contest on grounds of forgery, revocation or invalid transfer to person who drafted instrument.

Trusts – Roadmap

  1. Creation of a Valid Trust – 7 Elements

    1. Settlor/Trustor – Creator who often provides assets to create trust

    2. Delivery – handing over property from S to trustee

    3. Trustee – person holding legal title to trust property and managing assets

    4. Intent – S must intend to create trust in the present (mandatory words)

    5. Trust Property (Res) – must be presently existing property interest, not illusory

    6. Beneficiaries – person(s) holding equitable title and receiving benefits of assets

    7. Valid Trust Purpose – purpose cannot violate law or public policy

  2. Types of Trusts

    1. Discretionary Trust – Trustee has discretion to pay income or principal

    2. Mandatory Trust – trustee lacks discretion; must pay per terms of the trust

    3. Spendthrift Trust – limits voluntary and involuntary alienation

    4. Honorary Trust – not a valid trust as lacks human beneficiaries, but trustee can carry out S’s wishes to care for animal, maintain grave, etc.

    5. Secret Trust – Fact of the trust is secret; promise enforceable as a constructive trust

    6. Semi-Secret Trust – trustee named but beneficiaries are secret; unenforceable

    7. Totten Trust – bank account for benefit of third party

    8. Charitable Trust – trust for charitable purpose that benefits large number of unidentifiable beneficiaries (e.g. education, science, research). Cy pres if general charitable purpose.

    9. Resulting Trust – not a real trust – implied in fact trust based on presumed intent of the parties. Resulting trustee will transfer property to the S if alive, if not to residuary, if not to intestate heirs.

  3. Modification and Termination of Trusts

    1. General Rule – If S and all Bs consent, trust may be modified or terminated (only while S alive).

    2. The Clafin Doctrine – Trust cannot be modified or terminated, even if all beneficiaries agree, if to do so would be contrary to a material purpose of the S.

    3. Changed Circumstances – In Cal. court may modify or terminate trust (upon petition by trustee or B) if changed circumstances mean continuation in same manner would defeat trust purpose.

  4. Trust Administration and Trustee Duties: Trustee owes fiduciary duty to administer the trust solely in the interest of the beneficiaries. A breach can mean personal liability for trustee.

    1. Duty of loyalty – self-dealing – Trustee cannot buy or sell trust assets for trustee or spouse; trustee cannot borrow trust funds. If trustee engaged in self-dealing, courts apply the no further inquiry rule. Trustee’s good faith and reasonableness of transaction are irrelevant.

    2. Duty of loyalty – conflict of interest – Trustee breaches duty of loyalty by not acting in best interest of beneficiaries. E.g. selling trust property to buyer just to increase value of T’s own property. Remedies include ratification and surcharge.

    3. Duty of due care – trustee must act as a reasonably prudent person dealing w/ his own affairs.

    4. Duty to invest – split of authority – three alternative rules – discuss all three.

      1. State lists: In certain jxs., in the absence of directions in the trust, the trustee must follow a list of good investments.

      2. Common law prudent person test: The duty to invest requires the trustee to act as a reasonably prudent person investing his own property, trying to maximize income while preserving corpus. Key: each investment is scrutinized.

      3. Uniform Prudent Investor Act: Adopted by most states, provides that the trustee must invest as a prudent investor. Key: Each individual investment is not scrutinized, but, rather, performance is measured in the context of the entire trust portfolio.

    5. Duties relating to care of trust property:

      1. Duty to collect and protect trust property

      2. Duty to earmark trust property

      3. Duty not to commingle trust funds w/ trustee’s own

      4. Duty not to delegate investment decisions

      5. Duty to diversify investment

      6. Duty to account to trust beneficiaries.

    6. Remedies for the beneficiary:

      1. Ratify the Transaction – waive the breach if outcome is positive (no netting)

      2. Surcharge the Trustee – sue for any resulting loss

      3. Trace and recover the property (constructive trust) – except if sale to a BFP

Discover more from Legal Three

Subscribe now to keep reading and get access to the full archive.

Continue reading