Trusts & Estates Outline

I. Wealth Transfer Upon Death: The Fundamentals1. Freedom of Disposition

a. American succession law authorizes “dead hand control”b. The Power to Transmit Property at Death

Case: Shapira v. Union Nat’l Bank, 315 N.E.2d 825 (Ohio C.P. 1974).Facts: Decedent left a will leaving an inheritance to his son so long as he married a Jewish girl with Jewish parents. If he did not do so, it went to Israel.Holding: Valid bequest. Laws that protect a donor’s bequest trump those that would invalidate the transfer. Neither does the bequest invalidate public policy: there are enough Jewish girls in the area and the court is just upholding the donor’s request, not forcing him to marry against his will.

i. Hodel v. Irving (1987): the state cannot utterly extinguish the right to pass property, but can limit it to a certain extent

2. The Probate Processa. Probate and Non-Probate Property

i. Probate Property: property transferred via will or intestacyii. Non-Probate Property: Inter Vivos Trusts; Pay-on-Death & Transfer-on-

Death Contracts; Life Insurance; Joint Tenancyb. Probate Administration

i. Three Functions:1. Provides evidence of transfer of title, ensuring its marketability2. Protects creditors3. Distributes decedent’s property to those intended

c. Procedures for Probate Estatei. Opening Probate and Choice of Law

1. Law where decedent was domiciled at death governs personal property (primary/domiciliary jurisdiction); law where real property is governs that property (ancillary jurisdiction)

ii. Common Form and Solemn Form Probate1. Common form: ex parte proceeding in which no notice or process

was issued to any person2. Solemn form: notice given to interested parties and court has

greater level of participationiii. Formal and Informal Probate

1. Informal Probate (UPC § 3-301)a. Personal representative petitions for appointment without

notice; must provide will, swear to its validity, and information about devisees/heirs; must mail notice to interested parties

2. Formal Probate (UPC § 3-401)a. Litigated judicial determination of a question/claim

regarding the estateiv. Supervised and Unsupervised Trust Administration

1. Supervised Administration (UPC § 3-501)

a. Trustee subject to court’s continued scrutiny; can act without interim approvals, but must get permission before making distributions

2. Unsupervised Administration (UPC § 3-715)a. Trustee not subject to court’s scrutiny; default until

interested party petitions for supervised administrationv. Barring Creditors

1. Non-Claim Statutes require creditors to file a claim within a certain time period

II. Providing for the Family: Intestate & Forced Shares1. Rights of Surviving Spouses & Family Members

a. Simultaneous Deathi. Uniform Simultaneous Death Act: if there is no sufficient evidence of

survivorship, the beneficiary is deemed to have predeceased the donorii. UPC § 2-104: claimant must establish survivorship by 120 hours by clear

and convincing evidence2. Rights of Descendants

a. Generallyi. After spouse’s share is set aside, children and descendants of deceased

children take remainder to the exclusion of everyone elseb. Taking by Representation: Per Stirpes Distribution

i. English Per Stirpes (“By the Stacks”)1. Property divided into as many shares as there are living children of

the decedent and deceased children who have living descendants2. Decedent’s estate is divided at the generational level directly under

the decedent irrespective of whether or not there is a surviving descendant at that level

3. Vertical equality: each line of descent treated equallyii. Modern Per Stirpes (or, Per Capita Without Representation)

1. If any children survive the decedent, property goes under the English Per Stirpes system.

2. If not, estate is divided equally at the first generation in which there are living takers

iii. Per Capita at Each Generation (UPC)1. Property is divided into as many equal shares as there are: (1)

surviving descendants in the generation nearest to the decedent which contains one or more surviving descendants; and (2) deceased descendants in the same generation who left surviving descendants, if any

2. Distributed like modern per stirpes, but any part of the estate that drops to the next generational level is pooled, the divided equally among the persons at that generational level

3. Horizontal equality: each taker at each generation treated equally

c. Ancestors & Collateralsi. Parents

1. Ancestors generally do not take if there are living descendants; if no descendants, parents may take after spouse gets share

ii. Other Ancestors1. Various lines of succession/collaterals based on sanguinity

d. Disinheritance by Negative Willi. UPC § 2-101(b): authorizes negative wills; barred heir treated as if they

had predeceased the decedente. Transfers to Children; Defining Children

i. AdoptionCase: Hall v. Vallandingham, 540 A.2d 1162 (Md. 1988).Facts: Earl died, leaving a wife and four children. Wife remarried, and the new husband adopted the children. Earl’s brother died, and children brought a claim stating that Earl would have gotten a share of the intestate estate and so they were entitled to inherit through Earl.Holding: Children could not inherit from or through natural parents if they had been adopted by another parent. Court states that this would bestow upon the children a superior status.

1. UPC § 2-116: if there exists a parent-children relationship, the child may inherit by, through, or from that parent and vice versa

2. UPC § 2-119: parent-child relationship exists between child and adoptive parent, but not between child and natural parent, subject to certain exceptions; but possible for the court to order that a relationship exists between adopted child and natural parent

ii. Nonmarital & Posthumous Children; Effects of Reproductive Technologyf. Advancements Under Intestacy

i. Lifetime gifts given to heirs that may be subtracted from their devisesii. CL: gifts assumed to be advancements unless otherwise stated

iii. Hotchpot Rule: intestate estate and any advancement given to heirs is added to a “hotchpot” and the pot is divided amongst the heirs, and whoever got an advancement has that amount subtracted from their hotchpot share

iv. Modern Law: lifetime gift is not construed as an advancement unless explicitly held out as such (UPC requires written acknowledgement)

3. Bars to Successiona. Slayer Rule

i. If beneficiary is found to be responsible for donor’s death at least in civil court, they are not entitled to distribution

ii. In re Estate of Mahoney (Vt. 1966): slayer can inherit if convicted of involuntary manslaughter or below, but not of voluntary manslaughter and above

iii. Mercy killers still slayers (except in Wisconsin)b. Disclaimer

i. Refusal of an heir to take property devised to themii. Property disclaimed distributed as if disclaimant predeceased decedent

iii. UPC § 2-1106: disclaimed interest passes only to the descendants of a disclaimant who take by representation

III. Wills: Execution, Revocation, Components, & Capacity1. Execution of Wills: Formalities

a. Attested Willsi. The “Core Formalities”

1. (1) Writing; (2) signature; and (3) attestation2. Wills Act of 1837: required two witnesses at the time of testator’s

signing3. UPC § 2-502: permits attestation by notarization instead of

witnesses; allows witnesses to sign within a reasonable time of the testator’s signature OR the testator’s acknowledgement if the signature

4. Functions of the Formalitiesa. Evidentiary: provides proof admissible in courtb. Channeling: standardization of formsc. Cautionary/Ritual: instills significance of will creation and

executiond. Protection: protects testator from manipulation, imposition,

etc.b. The Strict Compliance Rule

i. Testator must accomplish all formalities for will to be admittedii. In re Groffman (P.C. 1969): will was signed and witnessed, but witnesses

did not witness the signature at the time of signing, so will was void (not in “presence” of testator at time of signing)

c. The Meaning of “Presence”

i. Line of Sight: presence satisfied if testator can see witness at time of signing

ii. Conscious Presence: testator, through sight, hearing, or general consciousness of events, comprehends that witness is in act of signing

d. The Signature Requirementi. Generally satisfied by handwritten/signed name at end of will

ii. Signature by mark, with assistance, or by another: look at intent of testator at time of signing

e. Interested Witnesses and Purging Statutesi. CL: Interested parties generally cannot be witnesses

ii. Purging Statutes: allow interested party to be a witness, but purges (voids) any bequest to that witness

iii. UPC § 2-505: interested parties can witness the will and the will will not be void/witness’s interest will not be purged

f. Ad Hoc Relief from Strict ComplianceCase: In re Pavlinko’s Estate, 148 A.2d 528 (Pa. 1959).Facts: Testators accidentally signed one another’s wills. Other than the names, the wills were virtually the same.Holding: Although the wills were otherwise duly executed, the fact that the testators signed the wrong wills voided them. No relief from the Wills Act formalities. Utilized strict compliance and the Four Corners Rule.

i. In re Snide: same facts as Pavlinko, but Court allows for reformation or curing of defect in the execution

g. Substantial Compliance (deems formalities executed)i. Court deems a defectively executed will as being in accord with the

formalities if there is clear and convincing evidence that the purpose of those formalities was served

h. The Harmless Error Rule (ignores formalities)i. UPC § 2-503: permits a court to waive the formalities if party establishes

by clear and convincing evidence that the will constitutes the testator’s intent

ii. “Intent” can mean any of the following:1. Intent to create a scheme of disposition of property;2. Intent to comply with the formalities; or3. Intent to “make a will” — the finality of intent to transfer at death

Case: In re Estate of Hall, 51 P.3d 1134 (Mont. 2002).Facts: Jim and Betty executed a joint will. Their lawyer was the only witness and he claimed the will was valid. Based on this claim, Jim instructed Betty to tear up their original will. Upon Jim’s death, Betty admitted the joint will to probate.Holding: The testators intended the will to be valid, and they reasonably relied upon the statement made by their lawyer, so the will was admitted.Case: In re Probate of Will & Codicil of Macool, 3 A.3d 1258 (N.J. App. Div. 2010).Facts: Louise and Elmer married for several years; her will left her estate to him. He died, so she wished to adjust her will. Her lawyer drew up a rough draft of the new will that did not completely incorporate her wishes. She then died.

Holding: Court did not admit the draft will because Louise was not able to see it before she died. Test: (1) decedent actually reviewed the will and (2) gave their final consent.

i. Notarized Willsi. UPC § 2-502: permits notarization in lieu of witnesses

Case: In re Estate of Horton, 325 Mich. App. 325 (2018).Facts: Decedent committed suicide; he left a “will” and final testament on the Notes app on his phone and left a handwritten note referring to the electronic note.Holding: Court admitted entry as a will. Found with clear and convincing evidence that he intended the electronic document to be a will.

2. Holographic Willsa. A will written and signed by the testator need not be witnessed

Case: In re Kimmel’s Estate, 123 A. 405 (Pa. 1924).Facts: Father wrote a note to his sons devising his personal property and a piece of real property to them. He died the following day.Holding: Court admitted letter to probate. Phrase, “If anything happens,” meant that father had testamentary intent. Although he only signed the letter “Father,” it counted as a signature because it was a method he always used when signing his letters to his sons.

b. Conditional Willsi. A clause that stipulates devises to of the testator dies in a particular way

ii. Courts generally do not uphold these, except construing them to “If I die”c. Preprinted Will Forms

i. May be admitted as holographic will if not witnessed if enough of it is in the testator’s handwriting

d. Signature & Handwriting Requirementsi. Signature

1. Can generally write your name anywhere on the documentii. Handwriting Requirements Through the Years

1. Common Law: entirely written, signed, and dated for holographic will to be valid

2. 1969 UPC: “Material Provisions” and signaturea. Surplusage Theory: signature and enough information to

discern testamentary intent without preprinted words3. 1990 UPC: “Material Provisions” and signature, and extrinsic

evidence admitted to discern testamentary intent3. Revocation of Wills

a. Revocation by Writing or Physical Acti. All states permit revocation by (1) a subsequent writing executed with the

Wills Act formalities and (2) a physical act such as burning/destroying the will

ii. UPC §2-507: Revocation by Writing or by Actiii. Express and Implied Revocatory Writings

1. Express: “I, John, make this my will and revoke all others”2. Implied (by Inconsistency): if a subsequent will makes a complete

disposition of the estate, any previous wills or codicils will be impliedly revoked

a. If a subsequent will does not provide complete disposition, it is treated as a codicil and anything not provided for under this will is devised under the previous will

iv. Formality in Revocation by Writing of Physical ActCase: Thompson v. Royall, 175 S.E. 748 (Va. 1934).Facts: Testator executed a will, then executed a codicil, both in line with Wills Act. She asked her lawyer to destroy the will and codicil; the lawyer instead wrote a note on the back of each sheet that the documents were void.Holding: Invalid revocation. Court found that to revoke the testator needed (1) doing of an act specified in the statute (cut, tear, burn, obliterate, cancel, or destroy), and (2) intent to revoke. To “cancel,” the cancelation would need to come into contact with the words of the will. Under UPC, no need for revocatory words to touch the word of the will.

v. Presumption of Physical Act RevocationCase: Harrison v. Bird, 621 So. 2d 972 (Ala. 1993).Facts: Testator executed a will, but later told her lawyer to tear it up. The lawyer allegedly tore it into four pieces and sent it to her, along with a letter stating she was without a will. Upon her death, they never found the original will but an interested party offered a copy.Holding: Testator properly revoked her will. If evidence suggests that she had a will, but the will is not found in her possession upon her death, presumption of revocation arises even though duplicates exist. No reliance of claims that the will was torn up, just that it wasn’t found.

vi. Harmless Error in RevocationCase: In re Estate of Stoker, 122 Cal. Rptr. 3d 529 (App. 2011).Facts: Testator had a will naming his then-girlfriend as main devisee. They broke up, and testator then dictated a will to a third party which revoked the will. Will was in third party’s handwriting and signed by testator.Holding: Valid revocation. Court applied the harmless error rule to revocation, stated that the will can be admitted if it is established by clear and convincing evidence that this was intended to be decedent’s last will and testament.

b. Partial Revocation by Physical Acti. Permitted under UPC § 2-507

ii. Majority permits whole or partial revocation by physical act and testamentary intent is discovered by subsequent investigation

c. Dependent Relative Revocation & Revivali. DRR: (1) Valid revocation that is (2) premised on a condition (3) that isn’t

realized, so revocation is ignored

Case: LaCroix v. Senecal, 99 A.2d 115 (Conn. 1953).Facts: Testator had a will leaving half of remainder to Senecal and other half to Nelson. She executed a codicil expressly revoking original will and changing Nelson’s name to his legal name. The codicil violated the Wills Act because it was witnessed by Senecal’s husband, an interested party per state law.Holding: The sole purpose of the codicil was to change Nelson’s name to his legal name, so court applies DRR to render revocation ineffective and revive the original will.

d. Revival of Revoked Willsi. Governed by UPC § 2-509

1. If W2 wholly revoked W1, and W2 is then revoked, Wi remains revoked; W1 is only revived if W2 only partially revoked W1

e. Revocation by Operation of Lawi. Marriage

1. Common Law: premarital will revoked upon marriage2. Modern Majority (UPC § 2-301): premarital will remains valid in

spite of subsequent marriage, but a surviving pretermitted spouse may take a portion unless the will expressly indicated that omission was intentional/spouse has already been provided for or it appears the testator left them out under contemplation of the effect (no express language required)

a. Look at pretermitted amount under UPC § 2-102ii. Birth of Children

1. Common Law: marriage followed by birth of children revokes a will executed before marriage

2. Modern Majority (UPC § 2-302): gives a child born after execution of parent’s will, and not mentioned in the will, a share of the estate

4. Components of a Willa. Integration of Wills

i. All papers present at the time of executed and are intended to be part of the will are treated as part of the will

Case: In re Estate of Rigsby, 843 P.2d 856 (Okla. App. 1992).Facts: Testator left a will; holographic formalities present on one full page. Parties found a second page folded together with the first page but was not fastened in any way.Holding: Second page not able to be probated. With regard to holographic wills, it must be made clearly apparent the testator intended that together both pages should constitute the will.

ii. Testator can avoid confusion by stapling, numbering, etc. the pagesb. Republication by Codicil

i. A validly executed will is treated as re-executed as of the date of the codicil only if to do so would carry out testator’s intent

ii. Updates the execution date up to execution of the latest codicilc. Incorporation by Reference

i. Existing Writings1. UPC § 2-510: allows a pre-existing writing not present at the time

of execution/not itself executed with the formalities to be absorbed into the will so long as the language of the will manifests this intent and describes the writing sufficiently to permit its identification

Case: Clark v. Greenhalge, 582 N.E.2d 949 (Mass. 1951).Facts: Testator executed a will leaving everything to Greenhalge except for a few things listed in a notebook; the will contained an express reference to the notebook.Holding: The notebook was incorporated. Testator intended to incorporate the notebook, and one of testator’s nurses testified that the notebook existed and was in progress prior to execution.

ii. Subsequent Writings and Tangible Personal Property

1. UPC § 2-513: allows testator to dispose of tangible personal property by a separate writing, even if prepared after execution, provided that the will makes reference to the separate writing

Case: In re Estate of Gonzalez, 885 A.2d 1146 (Me. 2004).Facts: Gonzalez showed his brother and sister-in-law his will prepared on a pre-printed will form that Gonzalez had already signed. Gonzalez had them sign a blank form as witnesses; he would copy the information in later. Gonzalez died suddenly shortly thereafter.Holding: Valid holographic will. Court permits the printed portions of a preprinted will form to be incorporated into the handwritten portions, even those containing testamentary intent, when the court finds such intent given all other evidence.

d. Acts of Independent Significancei. Used if beneficiary or property designations are identified by reference to

acts or events that have a lifetime motive and significance apart from their effect on the will

5. Ground for a Will Contesta. Mental Capacity

i. Testator must be capable of knowing and understanding (1) the nature and extent of his/her property, (2) nature objects of their bounty, (3) disposition they are making of that property, and (4) relating these elements to one another and forming an orderly devise regarding the disposition of that property

Case: In re Wright’s Estate, 60 P.2d. 434 (Cal. 1936).Facts: Wright executed a will. His daughter contested, arguing that he was of unsound mind. The witnesses also testified that he was of unsound mind.Holding: Valid will. Legal presumption in favor of sanity. “Testamentary capacity cannot be destroyed by a few isolated acts unless they directly bear upon and have influenced the testamentary act.” Duty of witnesses to determine soundness at time of witnessing; they should not have signed if they believed he was of unsound mind.

ii. Insane Delusion1. Delusion: false conception of reality that affected some part of the

disposition2. If there is any evidence to support belief, it is a mistake, not a

delusionCase: Breeden v. Stone, 992 P.2d 1167 (Colo. 2000).Facts: Testator was in a highly publicized hit & run accident and committed suicide as a result. Between the accident and suicide, he wrote a holographic codicil. Codicil was contested on grounds of delusion.Holding: No insane delusion. Cunningham Test: (1) testator understands the nature of their act; (2) they know the extent of their property; (3) they understand the proposed testamentary disposition; (4) they know the natural objects of their bounty; and (5) the will represents their wishes. Insane delusion test: (1) a person suffers from an insane delusion; and (2) that insane delusion must “materially affect the disposition in the will.” Testator suffered from insane delusion, but it did not affect disposition.

b. Undue Influencei. Influence that overcame the donor’s free will and caused the donor to

make a donative transfer that the donor would not otherwise have made

ii. Trier of fact infers undue influence if: (1) donor was susceptible to undue influence; (2) alleged wrongdoer had the opportunity to exert undue influence; (3) alleged wrongdoer had a disposition to exert undue influence; and (4) result appearing to be the effect of undue influence

1. Circumstantial evidence admissible to prove or disprove these elements

Case: In re Estate of Sharis, 990 N.E.2d 98 (Mass. App. 2013).Facts: Spinelli moved into decedent’s home, and slowly began getting power of checking account, power of attorney, etc. Spinelli contacted a lawyer, who talked to decedent briefly, and executed a will for decedent giving everything to Spinelli. Spinelli also transferred some $70k from decedent to himself.Holding: Undue influence test: (1) an unnatural disposition has been made (2) by a person susceptible to undue influence to the advantage of someone (3) with an opportunity exercise undue influence and (4) who in fact has used that opportunity to procure the contested disposition through improper means. Direct evidence not required.

iii. Presumptions & Burden Shifting in Undue Influence Cases1. Confidential Relationships: covers fiduciary, reliant, and

dominant-subservient relationships; requires person to be “other-regarding” due to potential for abuse

2. Suspicious Circumstances: play into test3. Presumption & Burden Shifting: If a suspicious circumstance

exists, burden shifts to alleged wrongdoerCase: Lipper v. Weslow, 369 S.W.2d 698 (Tex. App. 1963).Facts: Weslow wrote the will of decedent, which left nothing to Lipper. Evidence suggested that Weslow bore malice against Lipper.Holding: No undue influence. Lipper set the stage by showing evidence of a confidential relationship and opportunity but failed to establish evidence of undue influence.

c. Duressi. Wrongdoer threatened perform or did perform a wrongful act that coerced

the donor into making a donative transfer the donor would not have otherwise made

Case: Latham v. Father Divine, 85 N.E.2d 168 (N.Y. 1949).Facts: Testator left a will leaving everything to Father Divine. Allegedly, testator wished to change the will to leave everything to her family. Father Divine allegedly heard of this, and performed surgery on testator, killing her.Holding: Evidence of duress. Rule: where a legatee has taken property under a will, after agreeing outside that will to devote that property to a purpose intended and desired by the testator, equity will enforce a constructive trust lest there be fraud.

d. Fraudi. Wrongdoer knowingly or recklessly made a false misrepresentation to the

donor about a material fact that was intended to and did lead the donor to make a donative transfer that the donor would not otherwise have made

ii. Fraud in Execution1. Person intentionally misrepresents the character or contents of the

instrument signed by the testator, which does not carry out the testator’s intent

iii. Fraud in Inducement1. Misrepresentation causes the testator to execute or revoke a will, to

refrain from executing or revoking a will, or to include a particular provision in the wrongdoer’s favor

IV. Wills: Construction Problems1. The Plain Meaning Rule: Ambiguity, Mistake, & Omission

a. Plain Meaning & No Reformationi. Plain Meaning Rule: plain language of the will cannot be disturbed by

extrinsic evidence, though such evidence may be admitted to resolve certain ambiguities

ii. No Reformation Rule: courts may not reform the will to correct a mistaken term to reflect what testator intended

Case: Mahoney v. Grainger, 186 N.E. 86 (Mass. 1933).Facts: Testator left remainder of her estate to her “heirs at law”; her only living heir was her aunt. Prior to execution, testator stated she wished to leave her estate to her ~25 cousins.Holding: No reformation; estate goes to the aunt. Court must look to the plain meaning of the words on the will, and “rigidly exclude” extrinsic evidence.Case: In re Estate of Cole, 621 N.W.2d 816 (Minn. App. 2001).Facts: Testator allegedly wished to leave $25k to Vining; the lawyer messed up and wrote “two-hundred thousand dollars ($25,000)” in the will.Holding: Court admitted evidence from the draftsman to fix the alleged mistake. Will patently ambiguous, and so the court should (1) avoid doing violence to the words employed in the instrument and distrust the reliability of outside evidence and (2) effectuate the testator’s intent. Testimony available to fix ambiguities, subject to two limitations: (1) the surrounding circumstances should be considered first and direct evidence of testator’s intent should be considered only if the ambiguity persists; and (2) extrinsic evidence is to be used to determine what the testator meant by the words used, not anything outside those words.

iii. Patent Ambiguity: ambiguity evident on the face of the documentiv. Latent Ambiguity: ambiguity manifests itself only when will is applied to

the factsb. Ad Hoc Relief for Mistaken Terms

Case: Arnheiter v. Arnheiter, 125 A.2d 914 (N.J. Ch. 1956).Facts: Testator’s will instructed the executor to sell her property at 304 Harrison, but testator actually had property at 317 Harrison.Holding: Court cannot change the language of the will but applied “falsa demonstratio non nocet” to strike “304” from the language, thus fulfilling the testator’s intent.

i. Falsa demonstratio non nocet: “where a description of a thing or person consists of several particulars and all of them do not fit any one person or thing, less essential particulars may be rejected provided the remainder of the description clearly fits

Case: In re Gibbs’ Estate, 111 N.W.2d 413 (Wis. 1961).Facts: Testator’s will provided that 1% should go to “Robert. J. Krause” at “4708 N. 46th St.” Robert W. Krause came forward to claim because he was a friend. Robert J. Krause was a stranger but came forward to claim anyways. Trial court found that the testator meant Robert W.

Holding: Court properly admitted evidence to find that the testator meant Robert W. Testator told the lawyer he wanted “Bob” to get 1%, and the lawyer filled in the wrong information. Rule: details of identification, particularly matters as middle initials, street addresses, etc. are highly susceptible to mistake and should not be upheld to frustrate clearly demonstrable intent.

ii. Always admissible to go beyond four corners of the will to determine testamentary capacity, family structure, legal terms, and resolution of latent ambiguities

c. Openly Reforming Wills for Mistakesi. Erickson v. Erickson (Conn. 1998): court may reform a will if a mistake

by the scrivener is shown by clear and convincing evidenceii. Governed by UPC § 2-805: The court may reform the terms of a

governing instrument, even if unambiguous, to conform the terms to the transferor’s intention if it is proved by clear and convincing evidence what the transferor’s intention was and that the terms of the governing instrument were affected by a mistake of fact or law

Case: In re Estate of Duke, 352 P.3d 863 (Cal. 2013).Facts: Testator left a will that stated if both husband and wife died simultaneously the estate should be split between two charities. Wife died first, and then husband died without changing his will. Probate court did not admit extrinsic evidence of testator’s intent and probated estate via intestacy.Holding: Court should have admitted evidence. Reformation possible if clear and convincing evidence establishes an error in the expression of the testator’s intent.

iii. UPC §2-8051. We allow extrinsic evidence to resolve issues in other legal docs2. Categorical refusal to allow extrinsic evidence is supported by

history3. Necessary to permit reformation to prevent unjust enrichment4. Adoption of clear and convincing standard will not be productive

in litigation, except in cases we want to litigate5. Plain meaning rule causes more uncertainty and unpredictability

than breaking with precedent6. We allow reformation for other will substitutes

2. Lapse: Death of Beneficiary Before Death of Testatora. Lapsed & Void Devises

i. Lapsed specific or general devises fall into residue when lapsedii. Lapsed residuary devises pass to heirs by intestacy

iii. Lapsed class gifts go to other members of the class equallyiv. Void devise: if a devisee is dead at time of execution, the devise acts as

though it had lapsedv. No Residue-of-a-Residue Rule: T leaves residue to A and B. B dies; entire

residue will go to A upon T’s death.Case: In re Estate of Russell, 444 P.2d 353 (Cal. 1968).Facts: Testator left a will that left specific devises and split the residue evenly between a friend and a dog. Dog predeceased the testator.

Holding: Dog’s residuary share should pass by intestacy, not go to the other residuary devisee. Court admitted evidence to find that testator intended the residue to go to the friend and the dog evenly. Since the devise to the dog was void, dog’s share passes by intestacy.

b. Antilapse Statutesi. Do not “prevent” lapses, but substitute other beneficiaries

ii. Presumed Intent1. For certain predeceasing devisees, testator would prefer a

substitute gift to descendants than to pass by the common law of lapse

iii. Scope1. Antilapse statute applies to a lapsed devise only if the devisee

bears a particular relationship to the testator specifiediv. Default Rules

1. Prescribes default rules that yield to an expression of the testator’s intent that is contrary to the statute—statute doesn’t control if court finds alternative testamentary intent

v. Word of Survivorship1. Do not provide sufficient indication of an intent contrary to the

application of the statutec. Class Gifts

i. Disposition does not create a class if identities and shares of beneficiaries are fixed

ii. Application of Antilapse Statutes to Class Gifts1. Statutes will view class gifts as single generation devises

3. Changes in Property After Executiona. The Distinction Between Specific & General Devises

i. Specific: specific devises of real/personal propertyii. General: i.e., cash gifts

b. Ademptioni. Applies to specific devise of real or personal property when that property

was sold or given away between will execution and death of testatorii. Devisee has no claim to property that is no longer devisable; does not

apply to general, demonstrative, or residuary devisesiii. UPC § 2-606: Nonademption of Specific Devises

1. Intent theory: devisee may be entitled to replacement property or the value of that property if the devisee can show that the testator did not intend ademption

c. Satisfactioni. Applies when a testator makes an inter vivos transfer to a devisee after

will executionii. Presumption of satisfaction if testator is parent of devisee and gift is of a

similar nature to that devised by the willd. Abatement

i. If an estate does not have enough funds to pay off all debts and devises, shares will be abated (prorated) to pay off debts

ii. Absent an abatement clause, usually abated in this order: (1) residuary clauses reduced first, (2) general devises reduced second, and (3) specific and demonstrative devises are last and reduced pro rata

4. Limits on Freedom of Dispositiona. In most states, a surviving spouse is entitled to an elective or forced share—

typically 1/3 of decedent spouse’s estate (surviving child has no right)b. Spousal Elective Share

i. Separate property system: spouses own separately all earnings and acquisitions from earnings during the marriage

ii. Community property system: spouses retain separate property brought to the marriage, but own all earnings during the marriage in equal, undivided shares

iii. Unmarried Cohabitating Partners1. CL: no rights2. Some states allow rights for domestic partnerships/civil unions

iv. Must the Surviving Spouse Accept a Life Estate?1. UPC: once elective share is determined, spouse “charged” with

value of all other interests received under the will. If amount does not add up to elective share, spouse can get the rest pro rata from other devises

2. If testator dies leaving will leaving out spouse and spouse died before ability to elect, spouse either takes (support theory) or doesn’t (partnership theory)

v. Incompetent Surviving Spouse1. Spouse can generally take, subject to surrounding circumstances

vi. Abandonment1. Minority: elective share denied to spouse who abandoned/refused

to support decedent

Less than 1 year ...................................................................................... 3% 1 year but less than 2 years..................................................................... 6% 2 years but less than 3 years .................................................................. 12% 3 years but less than 4 years ................................................................. 18% 4 years but less than 5 years ................................................................. 24% 5 years but less than 6 years .................................................................. 30% 6 years but less than 7 years ................................................................. 36% 7 years but less than 8 years ................................................................. 42% 8 years but less than 9 years .................................................................. 48% 9 years but less than 10 years ............................................................... 54% 10 years but less than 11 years .............................................................. 60%11 years but less than 12 years ............................................................. 68% 12 years but less than 13 years .............................................................. 76% 13 years but less than 14 years .............................................................. 84% 14 years but less than 15 years .............................................................. 92% 15 years or more .................................................................................. 100%

5. Augmented Estatea. UPC §2-202 provides an elective share of the surviving spouse is 50% of the

value of the marital-property portion of the augmented estateb. Augmented estate: (1) sum of the decedent’s net probate estate, plus (2) the

decedent’s nonprobate transfers to others, plus (3) the decedent’s nonprobate transfers to the surviving spouse, plus (4) the surviving spouse’s property and nonprobate transfers to others. UPC § 2-203

c. Look to pages 543–44.

6. Rights of Spouse or Issue Omitted from the Willa. Spouse Omitted from Premarital Will

i. Most states allow for an omitted spouse to take an intestate share, unless there is evidence to show that omission was intentional, the will states that it should remain as-is regardless of subsequent marriage, or testator provided for spouse outside of the will in lieu of in will

ii. UPC § 2-301b. Disinheritance of a Child

i. Governed by UPC § 2-302

V. Trusts: Creation, Types, and Characteristics1. Creation of a Trust

a. Bifurcation of Titlei. Legal title resides in the trustee; equitable title in the beneficiary

b. Intent to Create a Trusti. Settlor need only manifest intent to create a trust

ii. Oral trusts must be proven by clear and convincing evidenceiii. Testamentary Trust

1. Trust created by will; will not fail for want of a trusteeiv. Deed of Trust

1. No particular formalities must be met to create an inter vivos trust of personal property

Case: Jimenez v. Lee, 547 US 126 (Or. 1976).Facts: Jimenez’s grandparents gave her money for her education. They gave it to Lee, her father, as custodian. He used it to buy stocks in his own name.Holding: Trust made for Jimenez. Even though donors did not state they wanted the money to be held in trust, their actions nonetheless meant they intended a trust.

v. Declaration of Trust1. Settlor simply declares themselves trustee, no formalities required

c. The Requirements of a Trust Resi. Res = property

ii. Trust needs some res to existCase: Unthank v. Rippstein, 386 S.W.2d 134 (Tex. 1964).Facts: Donor wrote a letter promising and “binding his estate” to pay $200 to defendant every month for the next five years. He did so until he died.Holding: No valid trust creation. No clear statement that the decedent wished to use his estate as valid res for defendant’s benefit.

d. Trust Beneficiariesi. A private trust must have one or more ascertainable beneficiaries

ii. Need not be ascertainable upon creation, but bounded by the Rule Against Perpetuities

iii. UTC § 402: trust must have a definite beneficiary, or be a charitable trust, animal care trust (§408), or a trust for noncharitable purposes (§ 409)

Case: Clark v. Campbell, 133 A. 166 (N.H. 1926).Facts: Testator’s will intended to create a trust with his “friends” as beneficiaries.Holding: No valid trust. Cannot create a trust for an indefinite beneficiary. Must define who the friends are.

VI. Nonprobate Transfers & Planning for Incapacity1. Revocable Inter Vivos Trusts

a. Donor can draft it how they wish, it is ambulatory, and no rights go to beneficiaries until donor’s death

b. The Wills Act & Present Transfersi. Revocable trusts can be created by deed of trust—classic third-party

trustee scenario for the benefit of someone else—or declaration of trust—donor names himself trustee with trust benefitting him during his lifetime and passing as he wishes upon his death

ii. Present-Transfer Theory: upon creation, and inter vivos trust passes future interest to the beneficiaries to become possessory at settlor’s death

iii. Farkas v. Williams (Ill. 1955): settlor executed a declaration of trust, creating an inter vivos transfer of a contingent equitable interest in remainder; trust not purely testamentary in nature and so did not fail for want of formalities

iv. “Present-Transfer” largely antiquated; courts just allow revocable trusts for their own sake now

Case: Fulp v. Gilliland, 998 N.E.2d 204 (Ind. 2013).

Facts: Fulp created a trust, into which she placed her assets and the family farm. She named herself settlor, trustee, and beneficiary, with a remainder interest in her children. She sold the family farm to her son at a heavily discounted price to pay for her living expenses, and one of the daughters petitioned as future beneficiary.Holding: When a revocable trust is still revocable, the trustee need only serve the settlor. Remainder beneficiary’s interests comes second to the settlor’s.

2. Revoking and Amending a RIVTa. UTC § 602(a): presumption of revocability unless settlor states otherwiseb. RIVT can be amended or revoked in any manner that clearly manifest’s settlor’s

intent, unless settlor specifies a particular method of amendment or revocationCase: Patterson v. Patterson, 266 P.3d 828 (Utah 2011).Facts: Settlor created an RIVT which stated she could only amend or revoke any disposition under the trust with a written instrument and also that the interests in the trust “shall continue until this Trust is revoked.” She modified the trust, removing her son Ron. Ron argued that per the terms of the trust, she could amend without revoking.Holding: Valid amendment. The settlor of a revocable trust has complete control over the trust until the settlor’s death. The trust did not provide an exclusive method of amendment. “The settlor may amend or revoke the trust by any method manifesting clear and convincing evidence of the settlor’s intent.”

3. The Subsidiary Law of Willsa. Will substitutes still subject to substantive restrictions on testation, rules of

construction, and other rules applicable to testamentary dispositionsCase: State Street Bank & Trust Co. v. Reiser, 389 N.E.2d 768 (Mass. App. 1979).Facts: Dunnebier placed stock from several different companies into a RIVT. He also received a working capital loan from the Bank and placed it into the same trust, along with the residue of his estate. He died four months after receiving the loan, without enough money in his estate to pay off the loan.Holding: Bank permitted to invade trust res to recover debt. “Where a person place property in trust and reserves the right to amend and revoke, or to direct disposition of principal and income, the settlor’s creditors may, following the death of the settlor, reach in satisfaction of the debts.”

i. Rule espoused in UTC § 505(c)(3)Case: Clymer v. Mayo, 473 N.E.2d 1084 (Mass. 1985).Facts: Mayo named her husband as primary beneficiary of her will, several non-probate accounts, and an RIVT, with the remainder to pour over into the RIVT. They divorced, and she removed him from the will and non-probate documents but not from the RIVT, and then died.Holding: Divorce removed husband from RIVT. It seemed clear from settlor’s and legislative intent that the revocation-on-divorce statute should apply to trusts as well, at least in this case.

4. The Other Will Substitutesa. Life Insurance Policies

i. Term life insurance: a contract that obligates the insurance company to pay the named beneficiary if the insured dies within the policy’s term

ii. Whole life insurance: a permanent life insurance policy that is certain to be paid to the beneficiary; no term

iii. No need for formalities because it’s a private contract

Case: Cook v. Equitable Life Assurance Society, 428 N.E.2d 110 (Ind. App. 1981).

Facts: Douglas had a life insurance policy and named his wife, Doris, as beneficiary. They divorced and Douglas married Margaret. Douglas never changed the name of the beneficiary from Doris to Margaret but left a holographic will upon his death that “left” the life insurance policy to Margaret.Holding: Court gives effect to life insurance documents naming Doris as beneficiary. “An attempt to change the beneficiary of a life insurance contract by will and in disregard of the methods prescribed under the contract will be unsuccessful.” Douglas needed to change the beneficiary on the private insurance contract; the will does not affect it.

b. Pay-on-Death Contractsi. Modern law has come to accept POD contracts as valid despite a lack of

Wills Act formalities (governed by UPC § 6-101)c. Multiple-Party Bank Accounts

i. If A and B are joint tenants in a bank account, they both have power to withdraw funds, but if one dies then the other has full control and funds do not pass through probate

Case: Varela v. Bernachea, 917 So. 2d 295 (Fla. App. 2005).Facts: Varela and Bernachea lived together; the latter deposited funds into a CMA account, on which both were joint tenants. Varela deposited $280k from the CMA account to a personal account, and Bernachea sued to settle the ownership status of the CMA account.Holding: Joint account with full rights to both parties. When a joint account is established with the funds of one person, a gift of the funds is presumed. Presumption can only be rebutted by clear and convincing evidence to the contrary. Barnachea failed to rebut the presumption by clear and convincing evidence.

d. Joint Tenancyi. Upon the death of one tenant, the surviving tenant owns the property

absolutelyii. In order for a joint tenant to transfer any interest in property owned during

life, she must sever the joint tenancy during life, or else all interest is retained by the surviving joint tenant

VII. Trusts: Fiduciary Administration1. The Duty of Loyalty

a. Trustee generally has a duty of undivided loyalty to beneficiaryCase: Hartman v. Hartle, 122 A. 615 (N.J. Ch. 1923).Facts: Testator died, left a will naming sons-in-law executors. The will directed them to sell the farm; one of the sons sold it and gave it to his wife, who turned around and sold it for a profit.Holding: Executors breach their fiduciary duties owed to the estate and the devisees. A trustee cannot buy for himself as his own sale. Wife who sold for a profit under same disability.Case: In re Gleeson’s Will, 124 N.E.2d 624 (Ill. App. 1955).Facts: Gleeson died, naming petitioner as trustee of her trust, which included a farm that he had been leasing. Following Gleeson’s death, petitioner held over as lessee per terms of the lease, and later re-leased a portion of the land to himself, realizing a profit.Holding: Trustee breached him fiduciary duties. General rule prohibits a trustee from dealing in an individual capacity with the trust property. Even though it was argued that trustee paid a higher price than usual and land would otherwise have gone to waste, that all doesn’t matter under the no further inquiry rule.

i. No Further Inquiry Rule: court will look no further into trustee’s claims of good faith beyond seeing that trustee benefitting by self-dealing

ii. Only defenses: (1) settlor authorization; (2) beneficiary consent; or (3) court approval

2. The Duty of Prudencea. Imposes on the trustee an objective standard of careb. Applies to all functions: custodial, administrative, investment, and distributivec. Distribution

i. Duty to make either mandatory or discretionary disbursements of income or principal to beneficiaries, per trust language

ii. Mandatory Distributions: those that trust requires trustees make to beneficiaries

iii. Discretionary Distributions: gives trustee discretion to take actions necessary to fulfill the underlying purposes of the trust

Case: Marsman v. Nasca, 573 N.E.2d 1025 (Mass. App. 1991).Facts: Testator died, leaving a trust for the care and maintenance of her husband, Cappy. She directed the trustee to make quarterly payments, along with any other as he may need for his lifestyle (he had horses and liked “fine clothes”). Cappy asked trustee for money; trustee only gave him so much so Cappy felt he could no longer ask for money. He ended up mortgaging his house, and eventually giving his daughter-in-law a remainder interest in the house if she took over his bills. Daughter-in-law died, leaving house with her husband. Cappy then died, and his new wife petitioned to get the house back.Holding: Trustee breached his fiduciary duties to Cappy. Trustee had a duty to inquire into Cappy’s finances to figure out exactly how much “comfortable support and maintenance” would require. Court established a constructive trust to be funded by payments withheld from Cappy.

1. No language, however strong, will entirely remove any power held in trust from the reach of a court of equity—trustee must act in good faith according to the terms of the trust, and there will never be complete discretion

d. Investment & the Prudent Investor Rulei. When investing, the trustee must favor primary beneficiaries over

remainderse. Custodial & Administrative Functionsf. Other Duties

i. Collect and protect trust property, earmark trust property, not to mingle trust funds with the trustee’s own, keep adequate records, bring and defend claims

3. The Duty of Impartialitya. UTC § 863: trustee has an obligation to act impartially for the benefit of each

beneficiary with regard to investing, managing, and distributing trust propertyb. Trustee must reasonably construe terms of the trust—sometimes that will lead to

favoring one beneficiary’s interests over another’s, but that’s how it be sometimesc. Howard v. Howard (Or. App. 2007): H created a trust for the benefit as W as

primary beneficiary and S as remainder beneficiary, but named both co-trustees; court found that as co-trustees they must favor interests of W as primary beneficiary over S as remainder

d. The Principal and Income Problemi. Principal: increases in asset value (e.g., land/stock appreciation)

ii. Income: rents, cash dividends on stock, interest on bonds, etc.4. The Duty to Inform & Account

a. UTC § 813: trustee must keep beneficiaries informed, especially regarding matters relevant to asset protection

b. UTC § 813(a): trustees must respond to a request for information “promptly”

VIII. Trusts: Alienation & Modification1. Alienation of the Beneficial Interest

a. Discretionary Trustsi. Creditor of discretionary trust beneficiary has little recourse against the

beneficiary’s interest, and the beneficiary cannot voluntarily alienate his interest in the trust

ii. “Pure” Discretionary Trust1. Trustee has absolute discretion over distributions2. Creditor may be entitled to an order (Hamilton order) requiring

that if a trustee does make a distribution, they must pay the creditor before anyone else (so long as beneficiary has enough to live off)

iii. Support Trust1. Trustee required to make distributions to ensure comfortable

support of beneficiary2. Beneficiary cannot alienate interest, creditor cannot compel

distribution3. Support trusts insulate property from attachment of most creditors,

except for children/spouse enforcing a claim for support/alimony, or some “supplier of necessities”

iv. Discretionary Support Trusts1. Treated as pure discretionary trusts

v. Collapsing the Categories Under the UTC1. UTC § 504: subject to exceptions for child support/alimony,

creditor of discretionary trust beneficiary cannot compel distribution even if beneficiary can do so

b. Spendthrift Trustsi. Beneficiary cannot voluntarily alienate their interest and creditors cannot

attach distributions, even for mandatory distributions (no Hamilton order)ii. Trusts generally assumed to be spendthrift unless otherwise stated (UTC §

502)Case: Scheffel v. Krueger, 782 A.2d 410 (N.H. 2001).Facts: Kruger had a spendthrift trust. He was found guilty in civil court of rape and the jury awarded the victim over $500k in damages. Victim petitioned the court for a Hamilton order.Holding: Court denied request. Since the trust was spendthrift, state law explicitly did not permit attachment, even in cases such as this.

c. Self-Settled Asset Protection Trusts

i. UTC § 505: generally, a person cannot shield their assets from creditors by placing them in a trust for their own benefit

2. Modification & Termination of Trustsa. Two ground for modification/termination without settlor’s consent:

i. Claflin Doctrine: By consent of all beneficiaries if the modification/termination is not contrary to a material purpose of the settlor

1. Only applies to non-charitable trustsii. Equitable Deviation: Changed circumstances not anticipated by the settlor

that would defeat or substantially impair the accomplishment of the purposes of the trust

1. Applies to all trusts, charitable or otherwiseb. Consent of the Beneficiaries & the Claflin Doctrine

i. Generally, a trust cannot be terminated/modified if: (1) it is a spendthrift trust; (2) the beneficiary is not to receive the principal until attaining a certain age; (3) it is a discretionary trust; or (4) it is a trust for the support of a beneficiary

Case: In re Estate of Brown, 528 A.2d 752 (Vt. 1987).Facts: Brown died, leaving a trust. Trust docs specified that the res was to be used to pay for a college education for Woolston’s children. Once trustee determined this purpose accomplished, the trust was to be used to support Woolston and his wife for the rest of their lives. After they die, remainder to Woolston’s children. After all of the children had been through college, Woolston petitioned for termination, arguing that the material purpose had been fulfilled. All beneficiaries joined/consented.Holding: No termination. Court found two material purposes—put kids through college and support Woolston and his wife. The first had been accomplished, but the second was still in progress, so trust could not be terminated even with consent of the beneficiaries.

ii. UTC § 411: removes material purpose requirement if settlor also consentsc. Deviation & Changed Circumstances

i. Traditional Law1. Proposed deviation due to changed circumstances not anticipated

by the settlor which substantially impair accomplishment of the material purposes of the trust must be necessary, not simply advantageous (typically only for administrative terms)

ii. Extension to Dispositive Provisions1. UTC § 412: equitable deviation applicable to both administrative

and dispositive terms—only need to show that deviation will further the purposes the trust, not necessity

Case: In re Riddell, 157 P.3d 888 (Wash. App. 2007).Facts: Riddell set up trust used to support Ralph and Beverly; upon their deaths the principal goes to their children. Their daughter, Nancy, suffered from schizophrenia and was in and out of hospitals. Ralph petitioned to modify the trust to set up a “special needs” trust for Nancy instead of outright disposition.Holding: Court modified initial trust to set up a special needs trust for Nancy. Court used equitable deviation doctrine to find that the settlor’s intent was frustrated by changed circumstances (Nancy’s medical condition) and the special needs trust would accomplish the settlor’s material purpose.

2. Deviation under UTC must conform with the settlor’s probable intent

d. Decantingi. Trustee given discretionary power over distribution uses that power to

distribute the trust property to a second trust with updated provisionsii. Must conform with the material purpose of the initial trust

iii. Does not require court involvement, unless someone petitions3. Charitable Trusts

a. Differences between private and charitable trusts: charitable trusts (1) must be for a charitable purpose, (2) are not subject to the Rule Against Perpetuities, (3) are subject to an entirely different enforcement scheme (typically AG’s office), and (4) can be more liberally modified

b. Charitable PurposesCase: Shenandoah Valley Nat’l Bank v. Taylor, 63 S.E.2d 786 (Va. 1951).Facts: Settlor created a “charitable” trust that intended to give to all 1st, 2nd, and 3rd graders at a certain school money “in furtherance of their education.”Holding: No valid charitable trust, lacks charitable purpose. Court found that the will was simply benevolent, not charitable. Kids will just use the money to buy whatever they want.

i. UTC § 405(a): charitable purposes include (1) relief of property; (2) advancement of education or religion; (3) promotion of health, (4) governmental, or (5) municipal purposes; or (6) other purposes the achievement of which is beneficial to the community

c. Modifications of Charitable Trustsi. Cy Pres

1. If a charitable trust’s purpose becomes illegal, impossible, or impracticable, a court may direct application of the property to another purpose that is within the settlor’s general charitable intent

2. Also available is the purpose becomes wastefula. Used when the amount of property held in trust exceeds

what is needed for the particular charitable purpose to such an extent to consider continued operation wasteful

Case: In re Neher’s Will, 18 N.E.2d 625 (N.Y. 1939).Facts: Neher left her home in charitable trust for the benefit of the community to build a hospital. The Village accepted the home but petitioned the court for modification, stating that it lacked the resources to maintain a hospital and that a hospital was just established in the next town.Holding: Court allowed modification. Property was a gift to the community, not to a particular institution. Court found that support of the community was the settlor’s general charitable intent, and saw no issue in allowing the community to build administrative offices instead.

3. UTC § 413(a): established a presumption that the donor had a general charitable intent