Wills and Trusts

Professor Jenkins

“In Terrorem” Clause

“A beneficiary shall forfeit his bequest under the will if he contests the validity of the will.”

Rule: Is valid in Texas, but will not apply to an attack on the will that is based on reasonable grounds and instituted in good faith.

Property Destruction Orders Under the Will Court Will:

Weigh social utility of destruction against loss to society of valuable resource.

Weigh motivation of testator.

Probate Process

Probate or administration of estate of living person-VOID.

Probate of one believed to be dead proved by circumstantial evidence

4 year statute of limitations (unless proof that party was not in default-muniment of title only)

Probate of Lost Will

Date of execution Executor

Proof Required

Person is deceased. 4 years have not

elapsed since date of death.

Court has jurisdiction and venue.

Person applying for “letters” is qualified.

Venue

First sought in primary or domiciliary jurisdiction (where decedent was domiciled at time of death).

Intestacy- Statutes of Descent Descent and Distribution

Section 45-Community Property Disposition of Whole Community

Real Estate

Married-No Kids - All TO SS

Married W/Kids of Surviving Spouse- ALL TO SS

Married-Kids not Kids of Surviving Spouse- 1/2 SS & 1/2 KIDS

Other Property

Married-No Kids- ALL TO SS

Married W/Kids of Surviving Spouse- ALL TO SS

Married –Kids not Kids of Surviving Spouse-

½ SS & ½ Kids

Separate Property

Probate Section 38(a)

Real Estate

Unmarried-W/Kids To Kids equally per stirpes

Unmarried-No Kids ½ to MOM & ½ to DAD (or

brothers and sisters in place)

Other Property

Unmarried W/Kids To Kids equally per stirpes

Unmarried No Kids ½ to MOM & ½ to DAD

Real Estate

Married w/ Kids

2/3 to kids equally

1/3 SS for life

Real Estate

Married – No Kids

¼ to MOM

½ to SS

¼ to DAD

Other Property

Married W/Kids

2/3 to Kids Equally

1/3 SS

Other Property

Married-No Kids ALL TO

SS

Half Blood

Section 41

S

Half

1/5

A (Decedent)B, D

Whole

2/5, 2/5

Will Execution-Section 57

Who may execute?

One who is over 18 years (or married or a member of the armed forces).

Of sound mind

Nature & Extent of his/her property.

Persons who are “natural objects of her bounty.”

The disposition being made. How these elements relate to

form an orderly plan for distribution.

These only set the stage

Testator must have mind & memory relevant to all the thingsANDMust understand the significance of her acts!

ACTS

Direct Bearing

on

Testamentary

Act

Other Factors

Relate

To

Time

Of

Execution

Insane Delusion

Delusion- false conception of reality

Insane Delusion- false conception of reality to which testator adheres against all reason and evidence to the contrary

Execution by Interested WitnessTX Section 62“Purging” Statute

A bequest to subscribing witness shall not be void if his testimony proving the will is corroborated by…ONE OR MORE DISINTERESTED

and CREDIBLE PERSONS.Anyone present at the execution.

Section 61 If no corroboration, and intestacy

occurs, interested subscribing witness takes.

LESSER OF WILL SHARE OR INTESTATE SHARE.

Will RevocationIntent & Capacity RequiredSection 63

By subsequent Will Codicil Declaration in writing, executed with

like formalities By T

Destroying Canceling Or causing it to be

done in his presence

DRRDoctrine of Dependent Relative Revocation & Revival

Allows court to disregard a revocation based on a mistake of law or fact.

TEXAS “No Revival of a Revoked Will”

JURISDICTION

SIMILAR PROVISIONS

WILL 1

10,000 to A

Gold watch to B

House to C

$5,000 to D

$3,000 to E

Residuary to X

WILL 2

15,000 to A

Gold watch to B

House to C

Residuary to X

IN TEXAS, IF T DESTROYS WILL # 2 THINKING HE IS

REVIVING WILL # 1, COURT WILL REVIVE WILL

#2 UNDER DRR.

NO partial revocation by physical act in Texas

If will is not found -

Presumption of revocation by physical act.

Integration

Asks:Which pages present @ the time

of signing comprise T’s duly executed will?

Look for: internal continuity staples.

Republication By Codicil

An implied restatement or rewriting of the language of a valid will as of the date of the codicil.

Incorporation By Reference

Applies only when instruments that NEVER HAD testamentary life are incorporated into a will and given TESTAMENTARY EFFECT 1. Will must refer to writing IN

EXISTENCE with reasonable certainty. 2. Will description corresponds to

description and was the one intended by T.

A Devise of Contents:Section 58 (d) (1)

Does mean tangible, personal property

Does not include tangibles, choses in action, “titled” personal property represented by a certificate of ownership requires a formal title transfer.

Caveat: One must expect to find item in such a location.

Example WILL STATES “I leave the contents

of my iron chest to Mary.”At death, the chest contains:a) Passbook with $5,000 showing on

depositb) $5,000c) Automobile title to antique

Mercedes Benzd) Diamond tiara worth $1,000,000

Joint Will

The wills of 2 or more individuals in one instrument

Reciprocal Wills

Separate reciprocal wills which mirror each other.

Mutual Wills

Joint or reciprocal wills based on a contract between testators.

Contractual Wills Two Types

Contract Not RevokeContract To Will

TX: Section 59 AState a contracts existsContain material provisions of the

contract (Contract may be incorporated by

reference into the will if all elements are met)

BASIS OF CONTRACT

Survivor will not revoke

Contract Law AppliesThen Wills Law Applies

Remedy: Constructive Trust

AmbiguitiesLatent

Does not appear on face of

instrument.

Patent

Appears on face of instrument.

Extrinsic Evidence freely received to determine intent.

Ambiguities

WILL I leave $6,000

to my nephew Ben.

WILL I leave my beach

home in Kemah as follows:

25% to Ben 25% to Jerry

50% to Bartles 25% to James

There are 2 nephews named

Ben.

TRUST

A fiduciary relationship in which one person is the holder of legal title to property subject to an equitable obligation to keep or use the property for the benefit of another.

SETTLOR

TrustorDonorGrantor

RES

TRUST PROPERTY

SUBJECT MATTER

CORPUS

PRINCIPAL

TRUSTEE (legal title)

FOR

BENEFICIARY (Equitable Title)

“Cestui Que Trust”

Settlor Trustee For benefit of

Beneficiary

ResRES

Requirement to Create Valid Private Trust

1. Expression of Intent 2. At least one beneficiary 3. Property interest in

existence or ascertainable

A TRUST WILL NOT FAIL FOR WANT OF TRUSTEE – THE COURT WILL APPOINT ONE

Delivery

Constructive- gives donee means of obtaining the object (e.g. a Key)

Symbolic- gives donee something symbolic of the actual object (e.g. written instrument)

When manual delivery is difficult or impractical

Resulting Trust Arises by an operation of law

where an express trust FAILS or makes an incomplete disposition.

Outcome? Takes res back to settlor or

settlor’s estate

Power of Appointment

The right (power) to select (appoint) within prescribed limits who shall receive an interest in property or how various interests in property shall be allocated.

Permits one to dispose of property while postponing or giving to another the authority of disposition.

House to H to leave at his death to one or more of 4 children. If he fails to direct, then to A.

“I leave my house to H with power of appointment under his will.”

T’ee to choose among my nephews.

T’ee at his discretion.

Power of Appt.Semi-secret trust-invalid

Oral Intervivos Trusts of Land are Invalid

Restatement Rule: where the owner of an interest

in land transfers it inter vivos to another, but no memorandum properly evidencing intent to create a trust is signed as required by SOF, and the transferee refuses to perform the trust, transferee holds the interest upon the constructive trust for the transferor if the transferee at the time of the transfer was in a confidential relation to the transferor.

Elements to Impose Constructive TRUST

Confidential relationship Deed by Donor

Oral Agreement to Reconvey Real Property

Unjust Enrichment of Transferee

Secret Trust

Will indicates no trust e.g. “I leave $50,000 to Ben”

Remedy - constructive trust

Semi-Secret Trust Will describes a trust but no terms

Result – VOID

e.g. “I leave $50,000 to Ben to dispose as I have instructed.”

Resulting trust

Termination

Claffin Doctrine:

A trust may not be terminated by all of the beneficiaries if it would interfere with a material purpose of the settlor.

Charitable Purposes

A) Relief of Poverty B) Advancement of Education C) Advancement of Religion D) Promotion of Health E) Governmental or Municipal

Purposes F) Other Purposes the Accomplishment

of which is Beneficial to the Community.

The Doctrine of Cy Pres

Applies where the purpose of a trust has becomeIllegalImpossible Permanently impractical of

performance

Duty to Study Terms of Trust Instrument

Duty to Take Possession of Trust Property

Duty to Defend Trust Against Attack

DUTY TO EARMARK

Duty To Separate

Separate&

Earmark

Trust Property

Duty to Make Trust Property Productive

Duty to Make Trust Property Productive

$$$$$$$$

Conservative, Prudent Investment

Duty of Undivided Loyalty to Beneficiaries

Duty not to Mingle

Duty Not to Mingle Trust Funds With Trustee’s Own Funds

Duty Not to Delegate

Impartiality

Duty of Impartiality in Dealing With Income Beneficiary and Remaindermen

Duty to Retain Trust Documents and Vouchers and Keep Records

Duty to Account to Beneficiaries