Wills and Trusts

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• LO52-1: Outline the tools, process, and
reasons for estate planning
• LO52-2: Recognize legal issues related to wills
• LO52-3: Describe how trusts are used as
estate planning tools
• LO52-4: Identify the end-of-life decisions that
are important from a legal perspective and
how they are expressed
• LO52-5: Recognize how international law
protects wills 52-2

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• The past few weeks have been very difficult for 39-year-old Ana Marie Hunnicut. In that time
frame, her father, Alvaro Rodriguez, a longtime resident of Yuma, Arizona, was diagnosed with
terminal cancer and died. As her father's only immediate family member (Rodriguez's wife Izarra
had passed away eight years ago), Hunnicut is responsible for probating her father's estate.

Early this morning, while going through the important papers her father had kept in an unlocked
safe in his home office, Hunnicut came across a paper entitled "Last Will and Testament of Alvaro
Diego Rodriguez." The document was dated September 1, 2013, and was written entirely in what
appeared to be her father's handwriting, including his signature. In it, Rodriguez revoked all
previous wills and willed all of his personal and real property, including all bank deposits, to the
Border Network for Human Rights, a nonprofit humanitarian group dedicated to assisting Mexican
immigrants and influencing United States immigration policy. The estate is worth $175,000.

Hunnicut is both perplexed and heartbroken. Her father had always attended to her needs, and in
a 2005 will (an original copy of which Hunnicut had in her possession), he had left all of his estate
to his daughter. The 2005 will had been prepared by a local attorney, witnessed by two friends of
the Rodriguez family, and notarized by a local notary public.

• Does Rodriguez's 2013 will take precedence over his 2005 will? Does it matter that the 2005 will
was executed with formalities, including the signatures of two witnesses and a notary public, and 52-3
the 2013 will was not? From an ethical and/or legal standpoint, is Hunnicut obligated to honor the
2013 will, even though doing so means she will receive none of her father's estate?
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Chapter 52 Hypothetical Case 2
• Cecil Husted, a divorced father of two children, recently died of a heart
attack at the age of 70. Husted was an internationally acclaimed film
cinematographer and director, known for such films as 2110: A Galactic
Adventure and The Glistening. The year before he died, Husted created a
videotaped will in which he left all of his $7 million estate to his daughter,
Sophia Collingsworth. The executor of Husted's will, his colleague Albert
Fontrow, submitted the will to probate.

Husted's son, Hal Husted, has challenged the will in probate court. Hal
Husted seeks to invalidate the videotaped will and thereby receive a one-
half share of his father's estate through the laws of intestate distribution
(the laws of intestate distribution apply by default when an individual dies
without leaving a valid will; through intestate laws, children of a decedent
share equally in terms of property distribution).
52-4
• Will Hal Husted succeed in his legal challenge to his father's will?

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Estate Planning and the
Uniform Probate Code
• Estate planning: Process by which an
individual decides what to do with his/her
real and personal property during and
after life
• Uniform Probate Code: Guides states in
developing laws related to estate planning

52-5

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Important Estate Planning Tools
• Will: Legal document that outlines how a
person wants his/her property distributed
on death
• Trust: Allows a person to transfer property
to another person; property used for
benefit of a third person

52-6

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Reasons Individuals Engage in
Estate Planning
• To provide for their family financially after
their death
• To reduce taxes and preserve wealth
• To promote family harmony
• To allow individuals in nontraditional
family relationships to gain benefits of
traditional family relationships
52-7

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• Intestacy statutes: Outline how a person's
property will be distributed if he/she dies
without a will

52-8

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Requirements for a
Legally Valid Will
• Testamentary capacity: Person must be old
enough to write will, and must be of sound
mind
• Document in writing (usually a typed,
written instrument)
• Testator's signature, including initials on
each page
• Witnesses who attest to the will 52-9

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• Oral will: Will that testator declares verbally during his/her last
illness, in front of witnesses, who later document testator's
wishes
• Holographic will: Will that testator writes and signs in his/her
own handwriting; usually, states do not require witnesses,
because when entire will is in handwriting, there is reduced
chance of fraud/forgery
• Mutual will: Will that two/more testators execute in which
they leave property to each other, provided the survivor
agrees that when he/she dies, remaining property will be
distributed consistent with plan created by all testators
52-10

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• Grounds for contesting will
• Will fails to meet legal requirements
• Testator a victim of fraud/undue influence
• Changing will: By writing a will codicil (wills are ambulatory,
meaning testators can change them)
• A codicil is a separate document with new provisions that outline
changes to will
• Testator must follow same procedures to make a valid codicil as
those followed in making original will
• Revoking will: Most common method is destruction of will
• Settlement of estate: By way of a personal representative
(executor/executrix) through process known as probate 52-11

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• Person who creates trust (settlor) delivers and
transfers legal title to property to another person
(trustee), who holds the property and uses it for
benefit of third person (beneficiary)
• Trusts are usually created through formal, written
documents
• Common trust components
• Trust corpus: Property held in trust
• Income corpus: Trust income generated through
interest and/or appreciation
52-12

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• Express
• Living trust: Created when settlor is alive
• Testamentary trust: Created through a will
• Implied: Created by court
• Constructive trust: To hold property in
trust for its rightful owner
• Family incentive trust: Responds to
concerns raised by wealthy
businesspersons 52-13

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• Termination of trust: Through provision in
trust that either indicates date on which
trust will terminate, or specifies an event
that will terminate trust

52-14

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End-of-Life Decisions:
Advance Directives
• Types of advance directives (through which
person can express his/her wishes about efforts
to prolong life and the right to die) include:
• Living wills: Allow individuals to express their
wishes regarding extent of medical treatment
desired if they are in an accident or suffer from a
life-threatening illness
• Health care proxies/durable powers of attorney:
Allow individuals to make medical decisions for
others 52-15

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Uniform Anatomical Gifts Act
(UAGA)
• Provides that any individual 18 years old/older
may give all/any part of his/her body to donee
on death
• Such donations are called anatomical gifts
• Organ donor card: Expresses donor's desire to
donate organs or tissue

52-16

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Convention Providing for a Uniform Law
on the Form of an International Will
(1973)
• Sponsored by International Institute for
Unification of Private Law (UNIDROIT)
• Protects wills written in other countries,
provided the wills follow a particular format

52-17

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Chapter 52 Hypothetical Case 3
• Known as the "Queen of Mean," hotelier and real estate developer Leona
Helmsley gained notoriety in the 1980s for the purported quote, "Only the
little people pay taxes." (She was convicted of federal tax evasion and
sentenced to a short prison stay as a result of her crime.) Helmsley died in
2007, leaving behind a will that devised $12 million for the care of her eight-
year-old dog, a Maltese named Trouble. She completely disinherited two
grandchildren; the will offered no explanation for their disinheritance other
than "reasons which are known to them." Donald Trump was quoted as
saying, "The dog is the only thing that loved her and deserves every single
penny of it."

• Should a probate court rewrite such a will, reducing the amount of money
reserved for the care of the dog and allocating a reasonable portion of the
funds to the two grandchildren who received nothing from the will? Is it
ethical for a testator to completely disinherit close relatives, especially when 52-18
such a snub favors a dog?

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Chapter 52 Hypothetical Case 4
• Seven years ago, 83-year-old Sara Muldowney signed a durable power of attorney
agreement that stipulated that her son, Robert Muldowney, could make medical decisions
for her if she became incapacitated. Her daughter, Sylvia Cantor, was not named in the
document nor any other document relating to Muldowney's affairs or estate.

Yesterday, Sara Muldowney suffered a severe stroke. She has been placed on life support,
and doctors have advised her son and daughter that Muldowney could persist for years in
that state. Without the life support, they have told her children, she will certainly die, and if
she does at some point regain consciousness (an unlikely event), she will be paralyzed,
require a ventilator to breathe, and be unable to speak or care for herself.

Robert Muldowney decides to withdraw life support from his mother and let her die
peacefully. Cantor is outraged and wants her mother to survive by any means necessary.

• Can Robert Muldowney override his sister's wishes and allow his mother to be removed
from life support? Does Cantor have legal grounds to fight her brother's decision?
52-19

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