K.

Ray 2008-2009

WILLS & TRUSTS

INTESTATE SUCCESSION
Intestate Succession is the transfer of assets at death where the decedent did not leave instructions for his/her assets. IS does not apply to assets that are governed by 3rd party Ks (life ins, IRA, acct w/ named beneficiary) When do you have IS? 1. No will. Where someone takes no action to write a will or equivalent 2. Failed will. Where someone has written an will / testamentary instrument, but it is not properly executed 3. Assets omitted from will. Where there is a distribution of part of an estate pursuant to a testamentary instrument. Fails to have a residuary clause (transfers rest of property) Definitions: Heir: Any person, including surviving spouse who is entitled to take property of the decedent by IS Issue 50: Issue of a person means all his/her lineal descendants of all generations w/ parent/child relationship Child: First level _____________________________________________________________________________________________ INTESTATE ESTATE PASSING TO SURVIVING SPOUSE: 6401

1. Community Property: Property that was gained during the marriage

6401(a): The surviving spouses intestate share is 1/2 of the community property that belongs to the decedent under 100. [Spouse ends up with 100%]

2. Separate Property: Property that was acquired before marriage; property that was gifted during the
marriage or inherited during the marriage

6401(c): The surviving spouses intestate share is:

1. 100% of intestate estate if no surviving issue, parent, sibling, or issue of a deceased sibling 2. 1/2 of intestate estate if: [one blood line]
(1) Decedent leaves one child or the issue of one deceased child (2) Decedent leaves no issue, but leaves a parent or parents or their issue or the issue of either of them 3. 1/3 of the intestate estate if: [two blood lines] (1) Decedent leaves more than one child (2) Decedent leaves one child and the issue of one or more deceased children (3) Decedent leaves issue of two or more deceased children _____________________________________________________________________________________________ INTESTATE ESTATE NOT PASSING TO SURVIVING SPOUSE: 6402 The part of the IE not passing to the SS or the entire IE if there is no SS passes as follows: (100%, 1/2, 2/3)

a) Issue: To the issue of the decedent. Issues take equally if they are all the same degree of kinship, but if
unequal, those of more remote take by 240

b) Parents: If no surviving issue, to the decedents parent or parents equally c) Issue of Parents (siblings): If no surviving issue or parent, then to issue of the parents (siblings/nieces/nephew)
or either of them

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d) Grandparents: To grandparents or issue of grandparents (aunts/uncles)

e) Stepchildren and their issue f) Next of kin g) In-laws; If none, property escheats to the state Division Into Equal Shares 240: Find the first generation where at least one person is living, and then distribute the shares at that level. (kids share parents share) [Go to 6401 first, and then 6402, then to 240 if needed] Failure to Survive Decedent 6403: A person who fails to survive the decedent by 120 hours (5 days) is deemed to have predeceased the decedent for the purpose of Intestate Succession. (IS only!) and heirs are determined accordingly. Simultaneous Death 220: If the title to property or the devolution of property depends upon priority of death and it cannot be established by clear and convincing evidence that one of the persons survived the other, the property of each person shall be administered or distributed, or otherwise dealt with, as if that person had survived the other. (Probate both estates as if each had outlived each other) Unborn Relatives of Decedent 6407: Relatives of the decedent conceived before the decedents death but born thereafter inherit as if they had been born in the lifetime of the decedent. [In gestation] _____________________________________________________________________________________________ REARRANGING INTESTATE SUCCESION: Agreements Among Heirs: If intestate heirs do not like distribution, can make private agreements w/ heirs Disclaimer: The party disclaiming is treated if he or she predeceased the decedent.
Ts!!!]

Not just for IS, but also for W &

265: A disclaimer means any writing which disclaims any interest that would otherwise be taken by a beneficiary. [IS, Wills, Irrevocable Trusts, etc.] 275: A beneficiary may disclaim any interest, in whole or in part, by filing a disclaimer. 279(a): Safe harbor: Is presumed a reasonable period, if w/in 9 months of transfer (date of death) 282(a): ? 282(b)(1): Have to divide at disclaimers level, even though disclaimants are considered to have predeceased the grantor. o 282(b)(1) is designed to prevent an heir from disclaiming property for the purpose of increasing the share of his or her line at the expense of other lines of the decedents descendants. (Doesnt shift to the next generation for 240 purposes!) 283: Is not a fraudulent transfer by the beneficiary In California you have a right not to take the gift.

Advancement in IS 6409(a): If a person dies intestate, as to all or part of his or her estate, property the decedent gave during lifetime to an heir is treated as an advancement against that heirs share of the IE only if one of the following conditions are satisfied:

Decedent declares in a contemporaneous writing that gift is an advancement against the heirs share of the estate OR

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Doesnt have to be signed Exam trigger: Someone making an intervivos gift to someone who qualifies later as an heir when donor dies intestate. This could qualify as a holographic will if the will is signed and not contemporaneous.

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Heir acknowledges in writing that it is an advancement against the heirs share of the estate

PARENT AND CHILD RELATIONSHIP: Who is an issue when there is a child adopted or born out of wedlock under intestate succession? Parent-Child Relationship 6450: A parent-child relationship is required to inherit intestate. A parent-child relationship exists between:

a) OWC: A person and the persons natural parents, regardless of marital status of the natural parents b) Adopted Child: relationship exist between an adopted person and the persons adopting parent or parent
Adoption 6451:

a) An adoption severs the parent-child relationship between adopted child and the natural family unless both
of the following are satisfied: (1) Adopted child and natural parent lived as a parent and child (stepparent situation) or the natural parents were married or co-habiting at conception and died before the persons birth(soldier) AND (2) Adoption by stepparent or replacement parent Out-of-wedlock Birth 6452 (No inheriting sperm donors) If a child is born out of wedlock, a natural parent (or relative) cannot inherit from or through the child unless: (a) the parent or relative acknowledged the child, AND (b) the parent or relative contributed to the support or the care of the child. 6454 & 54 A stepparent or foster parent is not a parent, unless (MOL): The relationship began during Minority, is Ongoing, and it is established by clear and convincing evidence that the foster/step-parent would have adopted the person but for a Legal barrier. _____________________________________________________________________________________________ CLASS GIFTS: Class Gifts:
[Not IS: Must have an instrument]

(Rules of Construction) Class

members are determined when transferor dies

21102: The intent of the transferor as expressed in the instrument controls the legal effect of the dispositions made in the instrument. However, if the transferor does not state in the instrument, then it defaults to the rules of construction. 21115(a): When there is an instrument (will / trust) and there is a class gift, 21115(a) says that adopted children and out of wedlock children (and their issue) are included in the class gift, but take only as determined by intestate succession.

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21115(b): Additional criteria: If the transferor is not the natural or adoptive parent, but from some other relative, the adopted child or the OWC will not be considered the child of that parent (parent-child relationship will not exist) unless there is evidence that the adopted child lived while a minor as a regular member of the adoptive parents household. [ex: gives notice to grandparent who is making the gift and recognizes the
relationship]

Exam Trigger: 1. Instrument (Will or Trust) 2. Class Gift 3. One or more members in the class gift are an adopted child or out of wedlock child 4. W or T: There is no evidence of testators intent Exam Steps: 1. Apply rules of construction 21115 and go back to IS rules 6450 / 6451. Are they an issue for IS? 2. If the adopted child takes under IS, then will be included in the class gift. If the transferor is not adoptive parent, but some other relative making the class gift, then go to 21115(b) and must have evidence of co-habilitation.

EXECUTION OF WILLS
Will: 88: Will includes codicil and any testamentary instrument which merely appoints an executor or revokes or revises another will. [There are two types of wills in Cal: (1) Witnessed will (attested) and (2) Holographic will (unattested)] _____________________________________________________________________________________________ ATTESTED WILL
[Must have intent] [Anything can be a signature if it is intended to be used as a signature, even an X]

Witnessed Will; Requirements 6110:

a) Except as provided in the following. The will shall be in writing and satisfy the requirements of this section: b) The will shall be signed by one of the following: 1) By the testator 2) In the testators name by some other person in the testators presence and by the testators direction c) The will shall be witnessed by being signed during the testators lifetime by at least two persons each of whom: (AB 2248 added new language) 1) being present at the same time, witnessed either the signing of the will OR the testators acknowledgment of the signature or of the will AND 2) understand that the instrument they sign is the testators will.

d) Although a will was not executed in compliance with subsection (c), the will is treated as if it had been executed in compliance with that subsection if the proponent of the will established by clear and convincing evidence that the decedent intended the will to constitute the decedents will. (AB 2248)

Only for the witness requirement. Ex: An attested will and testator crosses out and writes in new information and signs it. To qualify for a will, it must comply with the execution requirements. Here, it was signed, but not re-witnessed. Subsection (D) might save the will if it can be established by clear and convincing evidence that the decedent intended for it to be a will.

Interested Witness 6112: 1) Must be competent at the time of the signing

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2) Purging statutes: (Cal)

If an interested witness signs the will, then there is a presumption that the devise was procured by duress, menace, fraud, or undue influence. If the interested witness satisfies this presumption, then the interested witness may take under the will. If the presumption is not rebutted, then the interested witness takes no more than his/her intestate share and any bequest in excess of the intestate share is purged to the residuary clause if any or it will pass by IS. The presumption does not apply if there are two other witnesses to the will who are disinterested. Remember, doesnt make the will invalid, just limits the share of the interested witness _____________________________________________________________________________________________ UNATTESTED WILL
[Must have intent: Kurault: Found to be a will due to the testators intent]

Holographic Will; Requirements 6111: A will that does not comply with 6110 (witnessed will) is valid as a holographic will, whether or not witnessed, if the signature and the material provisions are in the handwriting of the testator. [Doesnt have to be dated or witnessed]

Signature requirement: It is well-settled in California that the signature need not be located at the end of the holographic will but may appear in another part of the document provided the testator wrote his name there with the intention of authenticating or executing the instrument as his will. In Cal, a testator can alter a holographic will by making handwritten changes w/out signing the will again.

GROUNDS FOR CONTEST [exam trigger: excluding children (natural objects of ones bounty]
TESTAMENTARY INTENT: Must have testamentary intent. Can be used to show a sham will. Extrinsic Evidence; Admissibility 6111.5: Extrinsic evidence is admissible to determine whether a document constitutes a will pursuant to 6110 (witnessed will) or 6111 (holographic will), or to determine the meaning of a will or a portion of a will if the meaning is unclear. [Courts may use extrinsic evidence to determine whether the document is a will
or resolve ambiguity]

Conditional Will 6105: A will, the validity of which is made conditional by its own terms, shall be admitted to probate or rejected, or denied effect after admission to probate, in conformity with the condition.

A conditional will that expressly requires the existence of a certain condition is valid only if the condition comes to pass. However, a will that merely expresses a motive for making will is valid regardless of whether the testator dies as a result of the thing that motivated him to make the will in the first place.

Conditional wills are wills that contain an express clause conditioning their being given effect upon some event occurring. However, it is often unclear whether a clause in a will was intended to be an express condition precedent to the will being given effect or merely an explanation for why the person got around to executing a will.

Sham Will: Looks like a valid will, but the testator did not have the requisite testamentary intent. _____________________________________________________________________________________________ TESTAMENTARY CAPACITY [age and competency] Requirements for Making a Will 6100: a) An individual 18 or more years of age who is of sound mind may make a will. [at the moment of making the will] b) A conservator may make a will for the conservatee if the conservator has been so authorized by a court order.

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Persons Not Mentally Competent to Make a Will 6100.5: (frequently invoked)

a) An individual is not mentally competent to make a will if at the time of making the will either of the
following is true: 1) The individual does not have sufficient mental capacity to be able to A) understand the nature of the testamentary act; OR B) understand the nature and situation of individuals property; OR C) understand the individuals family relation to living descendants, spouse, and parents, and those whose interests are affected by the will. 2) The individual suffers from a mental disorder with symptoms including delusions or hallucinations, which delusions or hallucinations result in the individuals devising property in a way which, except for the existence of the delusions or hallucinations, the individual would not have done.
[causation]

Lucid Interval: A person who is mentally incapacitated part of the time but who has lucid intervals during which he or she meets the standard for mental capacity can make a valid will. FRAUD / FORGERY: A testator can be defrauded in a variety of ways:

[3rd party interference]

Fraud in the Execution: Occurs when a testator is intentionally misrepresented (defrauded) about the nature or contents of the document he or she is signing. Fraud in the Inducement: Occurs when a testator is intentionally misled into forming a testamentary intention that he or she would not otherwise have formed.

_____________________________________________________________________________________________ UNDUE INFLUENCE / DURESS

[3rd party interference: presumptions created]

Duress, Menace, Fraud, or Undue Influence; Effect on Execution or Revocation 6104: The execution or revocation of a will or a part of a will is ineffective to the extent the execution or revocation was procured by duress, menace, fraud, or undue influence.

Duress: If the wrongdoer threatened to perform or did perform a wrongful act that coerced the donor into making a donative transfer that the donor would not otherwise have made. Fraud: If the wrongdoer knowingly or recklessly made a false representation 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 Undue influence: If the wrongdoer exerted such influence over the donor that it overcame the donors free will and caused the donor to make donative transfer that the donor would not otherwise have made.

_____________________________________________________________________________________________

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CONSTRUCTIVE TRUST: [Equitable Remedy] If a wrongful act from a 3rd party prevents a testator from executing a will or revoking a will, or the result of a mistake in a transaction where one party is unjustly enriched at the expense of the other, courts have held a constructive trust is available for relief. The court probates the will and afterwards sets up a trust with the direction to the trustee to deliver the assets to the person who should have received the gift.
Execution Revocation _____________________________________________________________________________________________________________________

REFERENCE TO MATTERS OUTSIDE THE WILL

Incorporation By Reference 6130: A writing in existence when a will is executed may be incorporated by reference if the language of the will manifests this intent and describes the writing sufficiently to permit identification. Is effective when:

1. A writing in existence when will was executed 2. Manifests the intent (evidence to incorporate) 3. Sufficient description to be indentified

[before will was written] (ex: yellow pad list by bed)

Reference to Unattested Writings 6132: A will may refer to a writing that directs disposition of tangible personal property not otherwise specifically disposed of by the will, except for money that is common coin or currency and property used primarily in a trade or business. Subject to a $25K limit. [written before or after] (exam: use this if want to add
after will)

Is effective when: 1.

2. 3.

An unrevoked will refers to the writing The writing is dated and is either in the handwriting of, or signed by, the testator The writing describes the items and the recipients of the property with reasonable certainty

Distributions of personal effects may be changed w/out going to atty by referencing an unattested writingwhich may be done before and/or after the will is executed. In Cal, can modify the list
(keep adding to it)

K. Ray 2008-2009 Reference to Acts and Events with Independent Significance 6131: A will may dispose of property by reference to acts and events that have significance apart from their effect upon the dispositions made by the will, whether the acts and events occur before or after the execution of the will or before or after the testators death.

Acts having independent significance: If it is a testamentary act, then it is not valid. If it is not a testamentary act, then it has independent significance and property will be distributed in accordance with the will. Look for class gifts. A will must identify the individual and the property. In a class gift, the members keep changing. In order to not violate the Statute of Wills, the changing of class members is an act of independent significance. Exam trigger: cannot identify individual people. A will may refer to an act or event that is to occur outside of the will and the act or event may control either who takes under the will or how much a beneficiary takes, as long as the reference act or event has its own significance on its effects upon the will

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Ex: I give $1K to each of my brothers-in-law. Valid even though they might change if the testator remarries because remarriage has an independent significance apart from distributing property upon his death. Ex: I give to X all of the items that are in my safe deposit box. Valid even though the contents might change because the safe deposit box has other independent significance apart from giving away the property. Ex: I give my jewelry in the drawer. Valid if the jewelry is sorted by color because this is a non-testamentary act. Invalid if sorted by who gets what because this is a testamentary act. Ex: I give $1K to each person on a list that I will place in my top drawer. Invalid because the list has no other independent significance apart from distributing the property on the testators death.

REVOCATION OF WILLS

[A will can be revoked by writing; act; presumption; operation of law]

Acts Constituting Revocation 6120: A will or any part thereof is revoked by any of the following:

a) A subsequent will which revokes the prior will or part expressly or by inconsistency b) Being burned, torn, canceled, obliterated, or destroyed, with the intent and for the purpose of revoking it by
either: (1) the testator or (2) another person in the testators presence and by the testators direction. _____________________________________________________________________________________________ REVOCATION BY SUBSEQUENT WILL:
[must have intent]

Express / Implied Revocation 6120(a): A will (or any part) can be revoked in writing by two ways:

Express Revocation: (express revocation clause) New will. I hereby revoke my prior will . . .
o If an attorney has drafted the will, will most likely contain an express revocation clause.

Inconsistency (implied revocation): Subsequent gift that is inconsistent. (no express revocation clause) _____________________________________________________________________________________________ REVOCATION BY UNATTESTED REVOCATORY ACT:
[(1) act; (2) intent]

Physical Revocation 6120(b): A will (or any part) can be revoked by burning, tearing, canceling, obliterating, or destroying by the testator OR by another person in testators presence and by the testators direction as long as the testator intended to revoke it.

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Partial revocation by revocatory act: If cancellation is by marking, the cancellation does require a physical mark to the actual words of the instrument. (cancelled null and void is ok) If the mark doesnt touch the words, then will have to meet the requirements of a holographic will, where it must be in the handwriting of the testator, signed, and have testamentary intent. Revocation by burning does not require the fire to touch the words No revocation occurs if done by an accident because there is no intent to revoke.

Presumption of Intent to Revoke: (implied, not statutory) If a will contestant proves that the testator had custody of the will, a will that is found physically mutilated is presumed to be revoked. However, this presumption can be rebutted by using extrinsic evidence ( 6111.5) Missing Wills; Presumption 6124: If the testators will was last in the testators possession, the testator was competent until death, and neither the will nor a duplicate original of the will can be found after the testators death, it is presumed that the testator destroyed the will with the intent to revoke it. Proof of Lost or Destroyed Wills 8223: The petition for probate of a lost or destroyed will shall include a written statement of the testamentary words or their substance. If the will is proved, the provisions of the will shall be set forth in order admitting the probate. [offer copy for its terms] If a will was last in the testators possession and cannot be found following the testators death, a rebuttable presumption cannot be
overcome, the will is deemed revoked. If the presumption is rebutted, the will is deemed lost and extrinsic evidence will be admitted to prove its terms. If the terms can be established by clear and convincing evidence, the lost will should be probated.

Duplicate Will 6121: A will executed in duplicate (2 formal copies/no photocopies) or any part thereof is revoked if one of the duplicates is burned, torn, canceled, obliterated, or destroyed, with the intent and for the purpose of revoking it, by either (1) the testator or (2) another person in the testators presence and by the testators direction. _____________________________________________________________________________________________ REVOCATION BY OPERATION OF LAW: Change in Circumstances: Marriage, Divorce, Remarriage Divorce or Annulment of Marriage 6122: Divorce or annulment revokes a will and it is as though the former spouse predeceased the testator. Revokes any disposition of property made to the former spouse and revokes any provision nominating the former spouse as a fiduciary Remarriage: If revoked by divorce, then will be revived by the testators remarriage to the former spouse REVIVAL OF A REVOKED WILL: Revival is a violation of the Statute of Wills. However, there is a narrow exception. Revival may
apply to an entire instrument or a gift within an instrument.

Exception to Anti-Revival Law 6123 If a second will which, had it remained effective at death, would have revoked the first will in whole or in part, is thereafter revoked by acts under 6120 or 6121 (duplicate), the first will is revoked in whole or in part UNLESS it is evident from the circumstances of the revocation of the second will OR from the testators contemporary or subsequent declarations that the testator intended the first will to take effect as executed.
Exam: Will 1 will be offered for probate. 1. 2. 3. 4. 2 Wills: Will 1 is properly executed; Will 2 is properly executed Will 2 revokes Will 1 by express or implied revocation by inconsistency Will 2 is then revoked (by physical act) under mistaken belief that this would revive Will 1 Is Will 1 revoked? Here, there is a possibility of revival. To find revival:

There must be evidence of testators intent evidenced by the surrounding circumstances to revive Will 1 OR from the testators contemporaneous or subsequent declarations. The testator must know what was in the first instrument.

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DEPENDENT RELATIVE REVOCATION: Ineffective Revocation

K. Ray 2008-2009 DDR is known as the Law of Second Best. DRR is a judicial doctrine that is applied where the revocation is dependent (conditioned) upon some mistake of law or fact that the testator believed and the testator would not have revoked but for the mistake, the revocation will not be given effect if it furthers the testators intent. if you have a revival situation then you will do revival and DDR. If it is a failed execution then DDR only. In dependent relevant revocation it is the 2nd will that is being revoked. This is applicable where there is no revival statute or you fail to meet the revival requirements. The first will is revoked, no discussion about it. It is the second wills revocation that may be ineffective and needs to be analyzed. Look for the benchmark to determine what the true intent of the testator is.

The court must make a decision of whether the testators intent was closer to being in will 2 or intestate succession. Revival: Ex: Testator revoked Will 1 by express or inconsistency when he wrote Will 2. Then, testator wanted Will 1 and revoked Will 2 by a physical act on the mistaken belief that is would revive Will 1. The choice becomes either to apply the DDR doctrine which will make the revocation of Will 2 ineffective or to not apply DDR and have the assets go through intestacy. The outcome will be the one of the two choices which furthers the testators intent. (look to benchmark) Will 2 would be offered for probate. Callahan Will 1 20% BS 80% GS Revoked expressly or by inconsistency Will 2 40% BS 60% GS Revoked by physical act Intestacy (or residuary clause) 50% BS 50% GS 1. Find mistake of law/fact 2. Look to the benchmark and probate the will which would furthers the testators intent

Replacement will situation: Where the testator revokes a gift by act (valid revocation) on belief that a new will or codicil is valid, but the new will or codicil is not valid (mistake of law). The intended beneficiary stands to take nothing because the original gift has been validly revoked and the new gift fails due to the mistake of law. Dependent relative revocation reasons that it is better to save the original gift if that is what the testator would have wanted if he or she had known that the new will/codicil was invalid. The scotch-taped Will 1 is probated. DRR applies. Will 2 was never a will because it fails execution. Will 1 Valid Testator revokes by physical act act (saves pieces) Writing Intestacy Fails-execution Is not a valid will Does not revoke Will 1 by express or inconsistency [mistake of law]

Gift within the instrument: Ex: Pete has a valid will that provides in part as follows: I give $10,000 to Lulu. Thereafter, Pete decides that Lulu deserves more. He takes out the will and draws a line through the $10,000 and handwrites above the lined out gift $20,000. Thereafter he dies. How much, if anything, does Lulu take? When Pete drew the line through the original gift of $10,000, Pete validly revoked the gift by act. When Pete handwrote in $20,000 he was attempting a holographic codicil that fails. Lula stands to gain nothing. But, by invoking the DRR, she will get the original gift of $10,000 and the revocation is ignored. 2nd situation (no revival): will 1 is properly executed, will 2 is not executed properly. Will 2 fails. Testator tears up will1 thinking 2 is good. Now DDR can be applied to will 1. Will 1 is the one revoked under mistake of thinking 2 was properly executed. To apply the doctrine it must further the testators intent. If it doesnt, then intestate succession.

POST-EXECUTION EVENTS AFFECTING WILLS

CLASSIFICATION OF DEVISES: 21117:
[Change in the testators property]

Specific: A specific gift is a transfer of specifically identifiable property. General: A general gift is a transfer from general assets that does not give specific property a. You can give a gift you dont have and the executor of your will will go out and buy it to give when the time comes.

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K. Ray 2008-2009 _____________________________________________________________________________________________ ADEMPTION OF SPECIFIC DEVISES BY EXTINCTION: Ademption only applies to specific gifts (devises)! Identity Theory: C/L If a specific gift was not in the estate as identified, the gift fails (adeemed by extinction). Intent of testator is not considered Intent Theory (modern approach): Ademption depends upon the testators subject intent, determined on a case-by-case basis. Reclassification to avoid ademption of by extinction: To avoid this application the court can reclassify the gift is a general gift.

Avoidance of the Identity Theory: [Intent theory] Because ademption is such a harsh doctrine, courts have developed a number of avoidance doctrines to justify not applying ademption. 1. Reclassification of the devise from specific to general: The doctrine of ademption by extinction applies only to specific devises. Where the wording of a gift is ambiguous, the beneficiary can argue that the gift is general. If the gift follows my, then unlikely this will apply Change in form: The testator intended the beneficiary to have the asset in the new form. (would argue its the same asset) The doctrine provides that if the item that is subject of the specific gift is in the estate, but there has been a change in the item that goes to its form, not its substance, the court should give the beneficiary the item. E.X. change in shares, but so similar in form that it can be considered the same asset. Time-of-death construction technique: The property held by the testator at death counts, not the property the testator owned at execution because A will speaks at the death of the testator. Construe the will at the time of death, not execution.

2.

3.

Specific Gifts; Recipients Rights 21133: [Outstanding balance; when there are some kind of proceeds left] A recipient of a specific gift has the right to the remaining property specifically given and all of the following: [Apply if
Testator has not received all the cash ]

a) Any balance of the purchase price: owing from the purchaser to the transferor at the time the gift takes
effect in possession or enjoyment by reason of sale of the property. (e.x. if mom sales house and proceeds are still coming in, the proceeds goes to beneficiary.) b) Any amount of eminent domain award: for the taking of property unpaid at the time the gift takes effect in possession or enjoyment c) Any insurance proceeds unpaid at the time the gift takes effect: in possession or enjoyment on fire or casualty insurance on or other recovery for injury to the property. d) Property owned by a transferor at the time the gift takes effect in possession or enjoyment and acquired sure, of the security interest for a specifically given obligation. (i.e. of plan to give nephew proceeds and the proceeds are nor forthcoming but the decedent keeps the house under foreclosure, then the beneficiary gets the house because it furthers the testators intent.)
If the specific gift is transferred voluntary/involuntary, and the testator dies, there is still an outstanding balance due the testator as a result of the transfer, then the beneficiary of the specific gift that was adeemed takes the outstanding balance in lieu of the specific item.

Specifically Given Property Sold or Mortgaged By Conservator or Agent; Transferees Rights 21134: [Conservatorship exception/ 3rd party] If specific property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated principal, the transferee has the right to a general pecuniary value equal of the specific gift. (as to not undermine testators intent)

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E.x. if 3rd party sells specific asset devised, the money you have in your assets will go to compensate for the value of that asset you would have received. We assume that Ts intent would be frustrated sine beneficiary didnt get that gift because T didnt really have capacity to direct them to give it away since assigned power of attorney or agent. If money is spent on taking care of T then specific devisee will still get reimbursed. When power of atty/conservator liquidates specific devised gifts then beneficiary is entitled to compensation of value for that gift. _____________________________________________________________________________________________ ACCESSIONS AND ACCRETIONS: Corporation theory: The additional shares are the result of a corporation initiated transaction (merger, acquisitions, stock splits, etc.) and not the result of a testator initiated transaction. At-Death Transfer of Securities: 21132: The beneficiary is entitled to the additional shares received by a testator as the result of a stock split occurring in the interval between the execution of a will and the death of the testator. [Devisees do not get any additional purchases] Cash dividends do not belong to the specific beneficiary. It is a percentage of ownership by the testator. Its not about the specific number devised. e.x. if the testator has 100 shares and devises them to A, and then there is a stock split and the 100 shares becomes 200 shares, then A gets the 200 shares.

ADEMPTION BY SATISFACTION [Equivalent to advancement in IS] the gift is null and void because the testator has paid out the
beneficiary throughout there lifetime.

Lifetime Gifs; Satisfaction of At-Death Transfer 21135: Property given by a transferor during his or her lifetime to a person is treated as a satisfaction of an at-death transfer to that person in whole or in part only if one of following conditions is satisfied:

1) The instrument provides for deduction of the lifetime gift from the at-death transfer [in will] 2) The transferor declares in a contemporaneous writing that the gift is in satisfaction of the at-death transfer
OR that its value is to be deducted from the value of the at-death transfer (note has to come at time of gift)

3) The transferee acknowledges in writing that the gift is in satisfaction of the at-death transfer (thanks mom for
my share now because I need it now) OR that its value is deducted piano now instead of later and it will no longer be in the estate).

from the value of the at-death transfer (Ill take the

_____________________________________________________________________________________________ LAPSE AND ANTI-LAPSE:

[Change in beneficiary]

Lapse 21109: The devise lapses (fails) if the devisee predeceases the testator because property can only be transferred to a living person. So if I leave a 1/3 of my estate and she dies, it does not go to her husband. Class gifs: If a member of the class dies, no lapse. The deceased share is divided equally among the other members of the class. [exam: distinguish class v. individual] Lapse also applies where the transferee is treated as predeceased the testator. Ex: disclaimer, divorce, etc

Anti-Lapse 21110(a): If a transferee has predeceased the transferor, the issue of the deceased transferee will take in the transferees place pursuant to 240 IF the transferee is kindred to the transferor. This section also applies to class gifts. Kindred means blood relatives or stepchildren. Not spouse. Kindred can also mean of the decedents spouse.

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Anti-Lapse Exception 21110(b): The issue of a deceased transferee do NOT take in the transferees place if the instrument expresses a contrary intention OR a substitute disposition. Express survivorship language Substitute disposition
Rationale: Anti-lapse statutes leave the law-imposed condition of survival intact, but modify the devolution of lapsed devises by providing a statutory substitute gift, usually the devisees descendants who survive the testator. The anti-lapse statute is based upon presumed intent. If the beneficiary is related closely enough to the testator and is survived by issue, the testator presumed to have preferred that the gift go to the issue of the predeceased beneficiary rather than fail. This presumption is a rebuttable presumption, but the contrary intent must be expressed in the will. (contrary intention requirement)

Failed Transfers 21111: If a transfer fails for any reason, the property is transferred as follows:

1) If instrument has an alternative disposition, then property transfers by terms of instrument 2) If no alternative disposition, but a residuary clause, then property goes to residue 3) If no alternative disposition nor residuary clause, then property is transferred by intestate succession
Exam: 1. 2. 3. 4. Beneficiary dies before the testator: Lapse issue because the dead cannot take Is the beneficiary kindred of the testator? If no (unrelated: neighbor, friend) then lapse. Go to 21111 to see how failed gifts are disposed. If yes, then anti-lapse might apply UNLESS the testator didnt intend for anti-lapse to apply. Then show facts by express evidence of contrary intent: survivorship language or substitute disposition. If no contrary intent is shown, then issue take pursuant to 240.

When you see bene predeceased T, mention 1) lapse 2) anti-Lapse and analyze if bene kindred to make anti-lapse apply, then if facts support it 3)evaluate if there is exception to anti-lapse (express contrary intention or substitute gift or requirement of survival.

PROTECTION AGAINST UNINTENTIONAL DISINHERITANCE

[Omitted Children and Spouses: Applies to Wills and Revocable Living Trusts] OMITTED CHILDREN: Child Born / Adopted After Execution of Will 21620: Except as provided in 21621, if the decedent fails to provide for a child born or adopted AFTER the execution of ALL of the decedents testamentary instruments, the omitted child takes an intestate share. Exception: When an Omitted Child Does Not Take 21621: An omitted child does not take under 21620 if any of the following occurs: (Exception to the omitted child rule)

The decedent intentionally and expressly omitted the child I intent to exclude The decedent transferred substantially all of the estate to the other parent of the omitted child The decedent provided for the child outside of the estate by an in lieu of transfer (equal) o Ex: Decedent bought life insurance in the amount equal to the other childrens gift

Azcunce case situation?: A second will was executed after first will and failed to include child born after
first will. [Failure of 21620 to apply]

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K. Ray 2008-2009 Decedents Erroneous Belief or Lack of Knowledge 21622: An unintentional omission does not void protection IF the decedent did not know of the childs existence or believed the child was dead, but the child will take only an intestate share.
Exam: Instrument #1; birth; no instrument after birth; child takes per intestate share Instrument #1; birth; instrument #2 w/ child omitted; omitted child does not take b/c an intentional omission is presumed (T would have included if meant to)

_____________________________________________________________________________________________ OMITTED SPOUSES: Omitted Spouses Share 21610: Except as provided in 21611, if the testator fails to provide for the omitted spouse who married the testator AFTER execution of ALL of the testators testamentary instruments, the omitted spouse takes: of the testators community property (as under 100) Take per intestate share of the separate property (no more than value of the separate property in the estate)

When an Omitted Spouse Does Not Take 21611: An omitted spouse does not take under 21610 if any of the following occurs:

Exam:

The decedent intentionally and expressly omitted the spouse The decedent provided for the spouse outside the estate by an in lieu of transfer (life ins) The omitted spouse made a valid agreement waiving the right to share in the decedents estate (pre-nup)

Instrument #1; marriage; omitted spouse takes community property and IS of separate property Instrument #1; marriage; Instrument #2 w/ spouse omitted; omitted spouse does not take b/c an intentional omission is presumed (T would have included if meant to)

WILL CONTRACTS
TYPES OF WILLS:

Mutual Wills: Are separate wills containing similar or reciprocal provisions Joint Wills: A single will executed by two people. The will operates as the will of each and probated twice (once for each person). They do not give rise to a contract not to change the will unless there is express language saying so. Joint and Mutual Wills: The wills have reciprocal provisions. They are not favored because they invite litigation. (SS changes and beneficiary claims a contract not to revoke) o Historically, suggests that there was K not to revoke. Modernly, no presumption.

Exam: Beneficiary is arguing that there is a contract, so the initial will cannot be revoked

WHEN IS THERE A CONTRACT? Will Contracts: 21700:

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K. Ray 2008-2009 (A) A contract to (1) make a will (or other instrument), or (2) not to revoke a will or (other instrument), or (3) to die intestate, can be established only by one of the following:

1. Material provisions in the will or other instrument (writing) 2. Expressed reference in a will or other instrument to a K AND extrinsic evidence proving the terms of the
K (a writing)

3. Writing signed by the decedent evidencing the K (like a letter promising to devise) 4. Clear and convincing evidence of an agreement between the decedent and the claimant or a promise by
the decedent to the claimant that is enforceable in equity. (can be oral) (Exam: look for services rendered)

No writing because this is Quatum Meruit (payment for services rendered) and may be implied (doesnt rise to level of a K)

5. Clear and convincing evidence of an agreement between the decedent and another person for the benefit
of the claimant or a promise by the decedent to another person for the benefit of the claimant that is enforceable in equity. (3rd party) (B) The execution of a joint will or mutual wills does not create a presumption of a K to revoke the wills or wills. The K must be clearly expressed. Statutory rights supersede the K in the will, which the 2nd spouse usually was not a party to.

Exam: A second marriage and both have kids from their first marriages only. Two wills are made, mutual and reciprocal; leaving all to SS, then all to kids equally. H dies, W gets new will, leaving all to her own kids only. K to make a will: 1. (3) A writing signed by decedent 2. (4) Clear and convincing evidence 3. (5) Clear and convincing evidence 1. 2. 3. 4. 5. K to revoke a will: Mutual willDoes not create a presumption (B) Evidence of a K? (Go thru 1-3) (1) Material provisions (2) Express reference (3) A writing signed by decedent

_____________________________________________________________________________________________

MISTAKES IS DONATIVE DOCUMENTS

REFORMATION:

Wills: Wills cannot be reformed because the Statute of Wills requires the testators signature and the testator is dead. The trend is for reformation under the guise of construction Trusts: Trusts can be reformed IF it can be proven (at the time of reformation) and there was a mistake in execution. Irrevocable trusts cannot be reformed after settler dies.

AMBIGUITY: Courts cannot reform wills, but can resolve ambiguities to the meet the testators intent, as proved by relevant extrinsic evidence (cannot add, but can ignore/delete) Ordinary Grammatical Meaning 21122: (Plain meaning rule) The words of the instrument are to be given their ordinary and grammatical meaning.

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Extrinsic Evidence 6115.5: Extrinsic evidence is admissible to determine whether a document is a will (per 6110/6111) OR to resolve ambiguities. Extrinsic evidence is NOT admissible if the terms are clear. So, extrinsic evidence would not be admissible to show that the testator used the words to mean something other than there plain meaning.

Personal Usage Doctrine: (Exception to the no-extrinsic evidence rule): Using the testators personal meaning of a term.
o If the testator has always referred to a person by a name other than the persons true name (nickname), and the testator uses that name in the will, cts will take extrinsic evidence to show that the testator always called the person by than name and to show that the person called by the nickname is the person who is supposed to take the gift, not the person whose true name actually matches the name in the will.

Equivocation: (Exception to the no-extrinsic evidence rule): When the words of the will apply equally to two persons or things. The court will take extrinsic evidence to determine which of the objects or people was the intended object or person.

Interpretation of Words to Give Every Expression Some Effect: 21120: Preference given to avoid intestacy or failure to transfer . Construction of Parts in Relation to Each Other 21121: All parts of an instrument are to be construed in relation to each other and so as, if possible, to form a consistent whole. If the meaning of any part of an instrument is ambiguous or doubtful, it may be explained by any reference to or recital of that part in another part of the instrument. (Ambiguities may be explained by references elsewhere)
Exam: 1. The document in unclear 2. Use extrinsic evidence rule 6115.5 to determine what the meaning should be OR 1. Use the documents own language per 21120/21121 to interpret (nothing need be deleted and nothing may be added)

MISTAKEN INCLUSION: Extrinsic evidence may be used to establish the real purpose, and then delete the mistake, leaving that which belongs. This arises where the description of an object or person in the will appears fine on the face of the will, but when the ct goes to apply it, there is no object or person that matches the exact description, but there is an object or person that almost matches the description. Cts will take extrinsic evidence to establish the mistaken inclusion to determine which words to strike. But, cts will not insert any words to correct the mistaken inclusion. The cts will strike the mistaken inclusion and look to see if the remaining words adequately describe _____________________________________________________________________________________________ MISTAKEN OMISSION: (Either beneficiary or gift)

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K. Ray 2008-2009 Courts cannot add to a will, but they can get creative in the remedy. The Statute of Wills prevents adding the omission and cant get around it. BUT, when the ct looks at the whole instrument, the ct can construe the whole instrument and apply it to the missing section. [21120/21121] Construction of Parts in Relation to Each Other 21121: All parts of an instrument are to be construed in relation to each other and so as, if possible, to form a consistent whole. If the meaning of any part of an instrument is ambiguous or doubtful, it may be explained by any reference to or recital of that part in another part of the instrument. (Ambiguities may be explained by references elsewhere) _____________________________________________________________________________________________ MISTAKEN INDUCEMENT: The general rule is that a mistaken inducement cannot be remedied and it will fail. However, if the testators set forth an alternative gift, then it can be remedied. (Nothing can be added per SOW) An otherwise unambiguous will may be reformed to conform to the testators testamentary intent IF it is established by clear and convincing evidence:

1. If there is a mistake in fact or in law affected the specific terms of the document; AND 2. It furthers the testators actual intent.
Belief: A gift given through a mistaken belief (fact or law) may be corrected only if there is an alternative gift and its reasoning is already expressed in the will. The exception is 21622s omitted child (Ts error or ignorance of a childs being alive/dead), then will take as an omitted child
The ct cannot write in a gift, but sometimes a testator has written into the will why he has not giving the gift. Ex: T thought Y was dead was dead, so gift is to Ys kids and this is explained in will. Then Y shows up.

Exam:

Fraud: The person who takes through duress or undue influence (fraud) still takes; the will is probated as is but the court creates a constructive trust for the benefit of the intended beneficiary
If there is a mistaken inclusion, it cannot be remedied and will fail. Exception: If Ts set forth alternate gift in instrument, then it can be remedied Exception: If T thought child was dead, child will take as omitted child Exception: If take due to fraud, then ct will remedy by constructive trust

TRUSTS: FORMATION AND FORMALITY

TRUSTS DEFINED: A trust is a fiduciary relationship with respect to property, in which title and beneficial ownership are separate. The trustee holds title to and manages the trust property for the benefit of another person(s), who are called beneficiaries. A lifetime trust can be irrevocable or revocable. If it remains revocable until the settlors death, it operates as a will substitute and serves the function of avoiding probate. Assets are divided into legal title and equitable title, which are transferred during the settlors lifetime to a trustee who holds, subject to the trust agreement. _____________________________________________________________________________________________

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K. Ray 2008-2009 PARTIES TO A TRUST: Settlor: Creates trust, names trustee, and may reserve beneficial interest (as beneficiary) Trustee: Holds legal title to the trust assets per the trust agreement with a fiduciary duty to the beneficiary. Once accepted, responsibility cannot be abandoned. Beneficiary: Is the party / parties for whose benefit the trustee holds title to the trust property; holds equitable title. _____________________________________________________________________________________________ TYPES OF TRUSTS: Express Trusts: Created by person. Are typical trusts, expressed by the settlor for ongoing management of trust property: May be Inter-Vivos or Testamentary Constructive Trusts: Created by law. Are remedial trusts for wrongful conduct or unjust enrichment. Resulting Trusts: Created by law. Returns trust assets to settlor if trust fails in whole or in part. Private Trusts: Are subject to the RAP Public Trusts / Charitable Trusts: Are NOT subject to the RAP Pour-Over Wills (Trusts): Pour over certain assets (or entire estate) from Testators will into an existing trust when the testator dies, thus adds property to trust. o The will and trust are still valid even though the testator may reserve the right to amend the existing trust (change the disposition of his property) after the will is executed. o Avoids probate, but only those assets placed in the IVT b/c unlike a will where it applies to all the decedents probate assets at death, an IVT applies only to those assets transferred to the IVT. _____________________________________________________________________________________________ CREATION OF A TRUST: Methods of Creating Trusts 15200: A trust may be created by any of the following methods:

1. Self-Declared Trusts: Are declarations by the settlor naming himself as trustee (not in will) 2. Inter-Vivos Trusts (revocable / irrevocable): Are transfers of property by the settlor during his lifetime to
another person as trustee.

o o

Revocable Inter-Vivos Trusts: Acts as a will substitute to avoid probate. It allows the settler retain control over the property. Irrevocable Inter-Vivos Trusts: Used for tax advantages

3. Testamentary Trusts: Are transfers of property by the owner to another through a willso probate is
NOT avoided takes effect at the owners death. Allows control of assets after death. REQUIREMENTS OF A TRUST:

1. Trustee: A trust will not fail for lack of a trustee as the court may appoint one 2. Trust Purpose: 15203: A trust may be created for anything not illegal or against public policy 3. Intent: 15201: A trust is created only if the settlor properly manifests an intention to create a trust.
Precatory Language: Unless a testator or other transferor manifests an intention to impose enforceable duties on the transferee, the intention to create a trust is lacking and no trust is created.

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K. Ray 2008-2009 If the court finds that the imposition of legally enforceable duties was intended, the trust is called a precatory trust.

4. Property: 15202: A trust is created only if there is trust property. Property gets transferred / impressed
into the trust. (cannot be a mere expectancy)

5. Beneficiary: 15205: A trust, other than a charitable trust, is created only if there is a beneficiary. The
beneficiary must be ascertainable. Public policy is to have a party interested in enforcing the trust and keeping the trustee honest.

Unborn / Unascertained Beneficiaries: Beneficiaries must be ascertained. Exception: if the beneficiaries are the settlors unborn children Exception to the Doctrine of Merger: 15209: Allows for the creation of a revocable living trust to act as a will substitute. If a trust provides for one or more successor beneficiaries after settlors death, the trust is NOT invalid, merged, or terminated if:

a.

One sole settlor/trustee/beneficiary during settlors lifetime b. 2+ settlors, at least one is trustee, and at least one of the settlors is beneficiary during settlors lifetime.

Honorary Trusts: Trusts for the benefit of a pet or to maintain ones gravesite, while honorable, technically fails for want of ascertainable beneficiaries, but can be saved as an honorable trust

Animals: 15212: Trust for care of animals: A trust for the care of a designated domestic or pet animal may be performed by the trustee for the life of the animal, whether or not there is a beneficiary who can seek enforcement or termination of the trust and whether or not the terms of the trust contemplate a longer duration. Gravesites: (not statutory)

Exam: Unborn / Unascertained Beneficiaries Settlor Settlor as Trustee w/ income for Settlors life; then to Settlors spouse/kids (S unmarried/no kids yet) ordinarily would be a merger because the Trustee = Beneficiary (so no one there to enforce), BUT 15209 validates this and allows trust to act as a will substitute for his lifetime, in no issue merger with Settlors estate Settlor Beneficiary as Trustee w/ income for Beneficiarys life; then to Beneficiarys spouse/kids (B unmarried/no kids yet) no merger as Settlor retains a reversionary interest in a resulting trust and keeps Trustee honest (as a hidden beneficiary for Settlors will or intestate heirs)

FORMALITIES: No writing is required unless land is involved (SOF) or its in a will (SOW).

Statute of Wills: Applies to Testamentary Trusts only. Statute of Frauds 15206: If real property is impressed w/a trust, the trust is invalid unless the terms of the trust are in writing.

o Remedy for failed Inter-Vivos Trusts (real property): Constructive trust

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o Remedy for failed Testamentary Trusts: (Depends if secret or semi-secret) 1. Secret Trust: Is one in which the face of the will makes no reference to the testators intent that
the beneficiary identified in the will was to take in a fiduciary capacity as a trustee and not as an ordinary beneficiary. A constructive trust is imposed and the property is ordered distributed to the intended beneficiaries.

2. Semi-secret Trust: Is one in which the will hints at or expresses the testators intent that the
beneficiary is to take for the benefit of others, but the identity of the trust beneficiaries and/or the terms of the trust are not set forth in a writing that can be given effect. A resulting trust is imposed on the trustee and the property is ordered returned to the testators probate estate. _____________________________________________________________________________________________ SPENDTHRIFT, DISCRETIONARY, AND SUPPORT TRUSTS: (Extent of beneficiarys interest) In the absence of a valid restraint on alienation, a beneficiary of a trust can transfer his/her beneficial interest and the beneficiarys creditors can subject such interest to the satisfaction of their claims to the same extent as a corresponding legal interest. Spendthrift Trusts: If the settlor includes a spendthrift clause in the trust, the general rule is that neither income nor principal can be assigned by beneficiary (voluntary) nor reached by creditors (involuntary attachment) until paid to beneficiary.

If settlor is beneficiary: In a trust where the settlor is also the beneficiary, a spendthrift clause will NOT be valid against the settlors creditors. It is against public policy to permit one to shield ones assets from creditors.

Discretionary Trusts: If the trustee has discretion over when to distribute the income and/or principal, the trust is a discretionary trust. (Versus mandatory trusts where the trustee must distribute all the income to a beneficiary on a regular basis) Discretionary trusts have a spendthrift clause quality inherent in the trust.

If the trustee has knowledge of the transfer of the beneficiarys interest or has been served with a judgment creditor seeking to reach the beneficiarys interest, and the trustee pays to or for the benefit of the beneficiary, the trustee is liable to the creditor. If the trustee does not have notice, then not personally liable. Special Needs Trusts: Are strictly discretionary trusts, usually tied to a particular purpose.

Support Trusts: A support trust is a trust that requires the trustee to pay as much income (and, if expressly provided in the trust, principal as well) as necessary for the beneficiarys support and education.

The trustee can distribute only as much as necessary for support. Creditors can attach any of the income and/or principal exceeding the amount necessary for the education/support of a beneficiary.

Exception Creditors: A trust cannot protect against: (Applies to spendthrift, discretionary, and support)

MODIFICATION AND TERMINATION OF TRUSTS:

TT: Revocable until death and not subject to reformation. IVT: Is a will substitute (default revocable unless otherwise expressed)

Support Judgments: Claims for child or spousal support Restitution Judgments: Judgments awarding restitution in connection with a felony Liability for Public Support: If beneficiary is liable to repay public support for self/spouse/minor-child

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K. Ray 2008-2009 A trust ends naturally when all of the trust principal is disbursed pursuant to the terms of the trust. Under special circumstances, however, the terms if the trust may be modified or the trust may be terminated prematurely. REVOCABLE TRUSTS: All that would be necessary to modify or terminate the trust is for the settlor to revoke. IRREVOCABLE TRUSTS:

Modification or Termination of Irrevocable Trust by ALL Beneficiaries 15403: If ALL the beneficiaries of an irrevocable trust consent, the court may grant their petition to modify or terminate the trust UNLESS the court determines that carrying out the trusts material purpose outweighs the beneficiaries interest in modifying/terminating it.

o However, the court does not have discretion to permit termination of a trust that is subject to valid
restraint on transfer of the beneficiarys interest. Indestructible trusts: (1) discretionary trusts; (2) spendthrift trusts; (3) support trusts; and (4) trusts in which the property is not to be distributed to the beneficiary until he/she reaches a specific age. Claflin Doctrine.

Guardian Ad Litem 15404: Where some of the beneficiaries are minors or are unborn, one way to attempt to secure their consent is to petition the court to appoint a guardian ad litem to represent the interests of the minor or unborn beneficiaries.

Exam: For premature termination of a trust: 1. 2. All beneficiaries must consent. If minor/unborn need guardian ad litem AND There is NO unfulfilled material purpose

_____________________________________________________________________________________________ UNFORESEEN CIRCUMSTANCES:

Modification or Termination in Changed Circumstance 15409: A court may modify or terminate the trust if there are unforeseen circumstances. The court may order the trustee to do acts that are not authorized or are forbidden by the trust if it would further the trusts purposes

REVOCABLE TRUSTS AND OTHER WILL SUBSTITUTES

REVOCATION UPON DIVORCE:

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Revocation of Trust of Former Spouse 5600: An ex-spouse does not take UNLESS:
1. 2. 3.

The non-probate transfer is irrevocable when settlor dies; There is clear & convincing evidence settlor intended to preserve the non-probate transfer to exspouse; OR There is a court order that the non-probate transfer remains in effect.

If fails, treats as if the ex-spouse predeceased _____________________________________________________________________________________________ DEATH OF TRANSFEREE: Simultaneous Death 220: If title depends on priority of death, and if the deaths are simultaneous, then the property of each is administered as if each had survived the other. Lapse 21109: The devise lapses (fails) if the devisee predeceases the testator because property can only be transferred to a living person. Lapse also applies where the transferee is treated as predeceased the testator. Ex: disclaimer, divorce, etc

Anti-Lapse 21110(a): If a transferee has predeceased the transferor, the issue of the deceased transferee will take in the transferees place pursuant to 240 IF the transferee is kindred to the transferor. Kindred means blood relatives or stepchildren. Not spouse.

Anti-Lapse Exception 21110(b): The issue of a deceased transferee do NOT take in the transferees place if the instrument expresses a contrary intention OR a substitute disposition. Express survivorship language Substitute disposition _____________________________________________________________________________________________ SLAYERS RULE: You cant inherit from the victim you murder. _____________________________________________________________________________________________ CHANGES IN THE TRUST PROPERTY Ademption by Extinction: If you give a specific property in the instrument and its not there at death, it is considered to adeemed by extinction.

Identity theory (c/l rule) Intent theory (modern rule): Looks to why the item is not there as it relates to the intent of the transforer.

Specific Gifts; Recipients Rights 21133: [Outstanding balance] A recipient of a specific gift has the right to the remaining property specifically given and all of the following: [Apply if Testator has not received all the cash ]

e) Any balance of the purchase price f) Any amount of eminent domain award g) Any insurance proceeds unpaid at the time the gift takes effect
Specifically Given Property Sold or Mortgaged By Conservator or Agent; Transferees Rights 21134: [Conservatorship exception/ 3rd party]

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If specific property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated principal, the transferee has the right to a general pecuniary value equal of the specific gift. (as to not undermine testators intent)

At-Death Transfer of Securities: 21132: The beneficiary is entitled to the additional shares received by a testator as the result of a stock split occurring in the interval between the execution of a will and the death of the testator. [Devisees do not get any additional purchases] Ademption by Satisfaction 21135: Property given by a transferor during his or her lifetime to a person is treated as a satisfaction of an at-death transfer to that person in whole or in part only if one of following conditions is satisfied:

1) The instrument provides for deduction of the lifetime gift from the at-death transfer [in will] 2) The transferor declares in a contemporaneous writing that the gift is in satisfaction of the at-death transfer
OR that its value is to be deducted from the value of the at-death transfer

3) The transferee acknowledges in writing that the gift is in satisfaction of the at-death transfer OR that its
value is deducted from the value of the at-death transfer. _____________________________________________________________________________________________

CHARITABLE TRUSTS
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RAP: Charitable trusts are not subject to the RAP. When written, a period of time is usually omitted, so if the trust fails, it will usually fail as an express, private trust for violating the RAP. Ascertainable Beneficiaries: Because CT are charitable purposes that benefit the community at large, there is no requirement that the trust have ascertainable beneficiaries. Supervision: Attorney General represents the public interest regarding and enforcing CTs

CHARITABLE PURPOSES: A trust is a charitable trust if it has a charitable purpose. A purpose is charitable if it is for: (GOPHER) 1) 2) 3) 4) 5) 6) Government / municipal purposes Other beneficial uses Poverty Health & Safety Education Religion

CY PRES DOCTRINE: Where a trust with a general charitable purpose expresses a particular charitable purpose, and it becomes illegal, impossible, or impracticable to carry out that particular charitable purpose, rather than imposing a resulting trust, modify the trust purpose to another particular purpose within the general charitable purpose. 1) Find illegal / impossible / impracticable 2) Find that the settlor probably would rather have the purpose modified than have the trust fail, based on stated intent. Neither inefficiency nor ineffective philanthropy constitutes impracticability May not be invoked upon the belief that the modified scheme would be more desirable or would constitute a better use of income Does not authorize the court to vary the terms of a trust merely because the variation will meet the desire and suit the convenience of the trustee

ADMINISTRATIVE DEVIATION: Where the administrative provisions of a trust cause the purpose to become illegal, impossible, or impracticable, the doctrine of administrative deviation provides that the administrative provisions of the trust should be modified before modifying the trust purposethereby preserving the settlors intent. Racial Discrimination: If the CT is racially discriminatory (and involves state action) it is illegal and may be able to apply Cy Pres. If not, then the assets go back to residuary/intestate. Gender Discrimination: If the CT has gender discrimination, then illegal and may be can apply Administrative Deviation and remove the State from the action / selection process. NO Cy Pres applied.

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FIDUCIARY ADMINISTRATION

Duty to Administer: The trustee has a duty to administer of the trust instrument after having accepted the trust agreement. Duty of Loyalty: The trustee has a duty to administer the trust solely in the interest of the beneficiaries only. Duty of Impartiality: If there are 2 or more beneficiaries, the trustee must deal impartially with them and in investing and managing the trust property, taking into account differing interests of beneficiaries. o Investing: Maximize income for short term and long term. Conflict of Interest: a) The trustee has a duty not to use/deal/with the trust property for the trustees own profit or for any purpose unconnected with the trust, nor take part in any transaction in which the trustee has an interest adverse to the beneficiary b) The trustee may not enforce a claim against the trust property the trustee purchased after or in contemplation of appointment as trustee, but the court may allow reimbursement that the trustee paid in good faith for the claim. c) A transaction between the trustee and a beneficiary which occurs during the existence of the trust or while the trustees influence with the beneficiary remains and by which the trustee obtains an advantage form the beneficiary is presumed to be a violation of the trustees fiduciary duty Duty to Take Reasonable Steps to Preserve: The trustee has duty to take and keep control of and to preserve the trust property. Duty to Produce Income: If that is one of the trusts purpose Duty of Not Commingle: A trustee may not commingle trust assets and other (persona) assets Duty Not to Delegate: A trustee cannot delegate those activities and responsibilities that he/she can reasonably be expected to perform. Where the trustee has properly delegated other acts, the trustee MUST supervise. Duty to Participate: If there is more than one trustee, must take reasonable steps to prevent a co-trustee from committing a breach or compel a co-trustee to redress a breach Duty to Use Special Skills: A trustee has a duty to use his/her special skills and if settlor relied on trustees representation of having special skills in selecting the trustee, the trustee is held to the standard of the skills represented

Standard of Care: a) The trustee must administer the trust reasonably as a prudent person would under the circumstances. b) Settlor may expand or restrict this by express provision (exoneration clause) and the trustee is not liable for good faith reliance on the provisions c) This does not apply to investment and management Standard of Care for Investments: is REASONABLE DIVERSIFICATION unless expressed otherwise. Duty to Keep Beneficiaries Reasonably Informed: of the trust and its administration

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PENALTY: Removal as trustee and surcharge (making up losses)

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