Wills and Trusts - Law Outline

7/30/2019 Wills and Trusts - Law Outline

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The transfer of property upon deathWills only become effective when you die you can constantly change and modify it.Trusts the major nonprobate way of doing things

I. Introduction to Probate and the Probate Process

I. Probate and Nonprobate Property

1. Probate property passes under the decedents will or by intestacya. If the transfer of property is not done by nonprobate means, you need an officialway to do it

b. One advantage of probate Non-claim statute: if you think this person owes youany money, you better make your claim now or else be foreclosed later on

2. Nonprobate property passes under an instrument other than a will; Includes:a. Joint tenancy property (both real and personal) joint (checking/savings)

accounts, rights of survivorship; automatically transfers to survivorb. Life insurance a contract; upon his death his money goes to her; need death

cert.c. Pensions, IRAs (retirement accounts)d. Government bonds another type of joint accounte. Contracts with payable-on-death provisions, andf. Interests in trust set up and can transfer while alive, upon death it is

automatically transferredg. Giftsh. Cars title makes a difference in whether you need to use probate. Who owns

it? Special procedure, but does not necessarily have to go thru probatei. Real estate you need official notice that you have titlej. Pay on death accounts bank accounts with specific instructions about when I

diek. Furniture, personal property if married, assume these things are held together,

as a practical matter, people usually do not carry too much about this stuff.3. Separate the probate and nonprobate property

a. Take nonprobate and do away with it accordinglyb. Take probate property and ask Did this person have a will? If so, it will

explain what to do with the probate property. If they do not, their probate

property will be given away thru intestate succession.4. What do they owe? Pay out any lawful debts.

II. Do people absolutely need to have a will? It depends1. It is possible to transfer all of your property thru nonprobate means; the will may just be a

catch-all2. You may want a will if you have specific requests (ie Mary gets the fur coat), because of

the non-claim statute (ie clean up a business), b/c you can decide who will handle theestate designation, or to name a guardian/provide for minor children

III. Table of Consanguinity Intestate succession only applies to probate property1. Intestate succession sets up the rules if someone dies without a will2. Most often, people die totally intestate; Or, even if they had a will, they did not give away

all of their property and they now go thru intestate succession3. Relation by blood in-laws and spouses dont count (unless its the spouse of the

deceased)4. Exhaust the first chain first until youve given away all the money5. First line collaterals are the parents, brothers, nephews, etc; Second line collaterals are the

uncles, first cousins, etc. Some states will draw the line after the second lineIV. Intestate Succession

1. Assuming someone dies without a will, go to the table of consanguinity; Scheme:a. Start with the deceased, look for a spouse, and then go down the line of children,

grandchildrenb. If there are no kids, go to parents, siblings and others

2. Surviving Spouses UPC 2-2102, 2-103


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a. If there is a surviving spouse and no will, look at 2-102: The surviving spousewill be mandated a specific share whether the person died intestate or with a will.

b. If there is no surviving spouse and no will, look at 2-103c. 2-102(1): First situation, if there is a surviving spouse, she will get at least

half. If there are no descendents, she will get the entire estate. If the onlydescendents of the decedent are also the only descendents of the survivingspouse, she gets the entire thing. Assumption about the relationship betweensurviving spouse and children she will pass it on to children at her death andthat she will act in the interest of her children.

d. 2-102(2)-(4): Policy issue: Assuming there is a surviving spouse and nochildren, do the parents get any share? (3) and (4) deal with the second marriagesituation. Assumption is that the surviving spouse will be less likely to take careof children who are not her own. (3) is if the surviving spouse has other kids; (4)is if the decedent has other kids. There are assumptions of how surviving spouseswill treat their kids.

e. 2-103: If there is something else that is left over that has not gone to thesurviving spouse. (1) tries to give an easy answer: to the decedents descendentsby representation. What does by representation mean?

3. Problem p. 76: In-laws do not count!a. Per stirpes (English in book): We can also think of people as particular

members of a family or branch (vertical). Because it focuses primarily on thebranch, you could have some very wide distributions within generations;

b. Per capita with right of representation: One theme is that every member ofthe same generation should be treated the same (horizontal). What generation dowe use for the first cut at the pie? Instead of automatically starting with the 1 stgeneration, it starts with the 1st generation where someone is alive; If the 2 aredead in the first generation, then we go to the grandchildren and if there are 3,divide by 1/3s. All grandchildren are treated alike, no matter how many are ineach linear family. Divide equally by the number of people have at least oneperson alive in a generation.

c. UPC Scheme Per capita at each generation: UPC 2-106. The theory iseasy. All it cares about is treating every member of a same generation the same.Also finds the first generation where someone is alive. Whatever is left over is

divided equally among the next generation down. All fractions should be thesame horizontally. Each child has the same fraction, each grandchild has thesame fraction.

4. 2-104: Requirement that Heir Survive Decedent for 120 hours (5 days)a. You would have to probate two estates in succession; This is an administration

problemb. The UPC decided to put this in as a matter of law under intestate succession. Not

every state does this. Make sure you look at dates that people die (Exam).5. 2-108: Posthumous children An individual in gestation at a particular time is treated

as living at that time if the individual lives 120 hours or more after death.6. 2-114: Adopted Children

a. When the child is adopted, he is treated exactly like everyone else in the newfamily.

b. UPC takes an intermediate position. The adopted child becomes part of the newfamily.

1. (b) deals with the second marriage and the legal relationship if the newspouse adopts the child. The rights of the natural parent are not terminatedby adoption by spouse. The kids are not made any worse off because ofthis this is an incentive for adoption. The second part gives theadvantage to the child; there is no by in this language, meaning thenoncustodial natural parent cannot inherit from the child, but the child canfrom him. In some cases, the kid can inherit from both parents.


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2. (c) has a proviso neither natural parent can inherit from or thru a childunless the natural parent openly treats the child as his or hers.

7. 2-113: Related Through Two Lines typically involves adoption within the familya. Parents have died, and grandparents adopt their grandchildren to take care of

them. This creates overlap natural grandparents, legal parents.b. UPC says child is entitled to only a single share based on the relationship that

would entitle the individual to the larger share (typically as a child, not agrandchild)

8. Children Born out of Wedlocka. Laws have changed. Cannot justify these restrictions on kids. Issue of

acknowledgement.1. Formal goes to court and swears these are his kids2. Informal dad is less willing, but there are witnesses and letters that he

acknowledges he is the dad.b. Limits the Supreme Court acknowledges

1. Its ok if states want to limit it by saying the person must have formallyacknowledged it when he (dad) was alive.

c. Under UPA (Uniform Parentage Act) parent-child relationship extends to everyparent and child, regardless of marital status. A parent-child relationship ispresumed to exist between a father and child if

1. while child is less than age 2, the father lives in the same house andopenly holds out the child as his natural child

2. the father acknowledges his paternity in writing filed with appropriatecourt or agency

9. Half-bloods very narrow issue; rarea. H1 and W have 3 children; H1 dies, W remarries and has 2 kids with H2. What

are the rights of the 1st group of children? They get half-shares under commonlaw.

b. UPC 2-107: Relatives of half blood inherit the same share they would inherit ifthey were of whole blood.

10.Surrogate Motherhooda. Whose child is it for purposes of intestate succession? Some states do not

recognize these contracts as against public policy.

b. Some states say the surrogate mother is the mother and the other mother mustadopt the child.

c. What do you do where a women wants a child, and writes an agreement that youdo not have to support the child. Virtually every state says you cannot contractaround child support.

11.Letter of Instructiona. Wills do not do everything that is necessary.b. Purpose: To list what their property is (Property we own, addresses, where the

deeds are, insurance, amount, where the papers are, etc); To give personalinstructions and give descriptions on funeral, etc.

12.Problem 120-121a. Probate Lot and cabin, Remainder interest in moms home, Gen Corp stock,

Mutual Fund

b. Non -Probate Residence,* Checking account, COD, IRA, American MutualFund, Life Insurance

c. Conflict of laws: with respect to real property, the laws that apply are the lawswhere the property is physically located.

d. You need to clear title to real property13.Wills are public documents divide by personal and real property. Residual clause if

there is anything extra or anything I forgot, heres where it goes.14.Table of Consanguinity

a. You dont look to the next line unless everyone in the previous line is gone.


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b. Under the UPC, dont go past the grandparent line (2nd line collaterals); If youare ever under intestate succession, you have to be within the first two lines.Then it will go to the state

c. UPC 2-103(4) cut off after second line collaterals, and split by paternal andmaternal.

15.Laughing Heirs Distant relatives. Laughing all the way to the bank. UPC cuts offlaughing heirs

V. Administration of Probate Estates1. Appoint personal representative to wind up decedents affairs; Duties include -

a. Inventory and collect assets of decedentb. manage the assets during the administrationc. receive and pay the claims of creditors and tax collectorsd. clear any titles to cars, real estate, or other assetse. distribute remaining assets to those entitled

VI. Simultaneous Death1. Husband and wife name each other as beneficiary; what happens when they die together?

This typically has to do with non-probate property. USDA tries to take the default rulesand change them.

a. Default rules: Beneficiary gets the money. Problem is that you extend the periodof when you probate this stuff and the money has to go thru two successive

proceedings in a relatively short period of time.b. USDA has a solution to this. If this situation arises, it will try to keep the

property within the same estate (husbands property stays with the estate of thehusband, and vice versa). It involves only a single administration. Purpose is tokeep the assets within the same family line. Still only a default rule will, letterof instruction can explain how to handle this.

2. Janus v. Tarasewiccza. Facts: Husband and wife died after taking cyanide-laced Tylenol capsules.

Husband was pronounced dead on Sept. 29, wife on Oct. 1. $100,000 insurancepolicy on husband, with wife as beneficiary.

b. Under default rules, the money would go to her estate and to her family. (Courtdecision)

c. (New) USDA will treat it as if each had predeceased the other, and pretend for

purposes of the policy, that the wife died first. The money will stay in thehusbands estate.

3. The courts seem to go out of their way to find evidence to prove they did not diesimultaneously.

a. H and W drown try to prove one was a better swimmer; Plane crash carbonmonoxide in one; Car crash one was hit first

4. USDA (1993) Not every state has adopted this.a. First thing it does: creates 120-hr (5-day) requirement (UPC); If beneficiary

does not survive for 5 days, he is presumed to have predeceased the testator.b. Second, it gives specific rules about what will be evidence of death.c. Exceptions to USDA survival is not required if governing instrument deals

with simultaneous death; USDA is simply the default rule.VII. Reasons for Change in Intestate Share

1. Advancements 2-109 based on assumption that the parent would want an equaldistribution of assets among the children and that true equality can be reached only iflifetime gifts are taken into account in determining the amount of the equal shares.

a. Gift it is out of estate and does not count as an advancement.b. Loan expect it to be paid back; debt owed to the estate; you pay money back

and it goes back into the pot of distribution.c. Advancement I will give you this money now, and it will come off the share

you would otherwise receive at my death. You will get $10k less when I die.d. UPA 2-109 : Makes it relatively hard to prove an advancement.


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1. Decedent must have declared the advancement in a contemporaneouswriting (must be done right away; cannot come back later and say youmeant it as an advancement) or

2. the heir acknowledges the advancement in writing (may be done anytime).

e. Hotchpot : UPC does not tell you everything you need to know. You puteverything together in a single pot. Assume 3 kids and $10,000 advance to onechild. For accounting purposes only, add the advance into the whole estate. $50kplus $10k = $60k. What is each childs respective share? $20k each. Now applythe advancement, A gets $10k, B gets $20k, and C gets $20k. $50k estate isdistributed.

f. You do not have to pay back amount of advancement that was bigger than yourhotchpot share..

g. What if A dies before dad? Does the advancement (debt) carry over to thechildren? UPC 2-109(c) property is not taken into account unless thedescendants contemporaneous writing provides otherwise. So, thecontemporaneous writing needs to say if its an advancement and whether itcarries over to the other children.

2. Slayer Statutesa. In this probate proceeding, this individual is no longer entitled to this.

b. What has to be proven? All we need in the civil proceeding is proof by apreponderance (versus beyond a reasonable doubt in criminal); A conviction incriminal court makes this easy. If he was not found guilty, it does not preclude afinding of preponderance in a civil proceeding.

c. Remedy Pretend that he died before the person he killed. What about hischildren? Corruption of blood does conviction of crime run to entire family?No.

3. Loans Understand the emotional context Practical Concernsa. Transactions during life with your kids. Was this transaction a gift,

advancement, or loan?b. Kid wants to borrow money; there should be formal documents (but probably

not); the kid stops paying on his loan. Make sure the kid goes to a lawyer and isrepresented.

c. Have some stipulations in the will about what is to happen with the loan andhow the other kids are to be treated. Treat it as an advancement? Give slightlylarger gifts to other siblings?

4. Disclaimers Do I have to take the money Ive been given through a will?a. It is a vehicle for estate planning; First option is to take it (w/ estate taxes, etc);

Or, you can disclaim, and it just skips over you and it will go directly to thegrandkids

b. Every state will have a general disclaimer statute for property (not just wills)c. Must be in writing and within a relatively short period of time after death of

decedent (3-6 months usually)d. If I die, does a representative of my estate have the ability to do this? Post-death

estate planning.e. Once the property has been disclaimed, it relates back to the time of the gift. If I

get it in Jan. and in Mar. I disclaim we pretend that you never owned it and that itwent to your kids on Jan. 1st.

5. Negative Wills Only in UPCa. Critical for intestate successionb. You dont like who will get your property if you die intestate. Be sure that you

give it away to someone else (non-probate or effective will)c. If something is wrong with the will, and you end up dying intestate or partially

intestate, you can declare that X does not get any of my money.II. Wills Execution (Part 5 of UPC)

A. Formal Wills


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1. Requirements of Executiona. First reason/function of wills Ritual; A special ceremony.b. Second Evidentiary function (writing, witnesses) b/c the person who knows

the most about this is dead. Gives us more confidence to know this is what hewanted.

c. Third Protective function wills are written when you are older and not untilyou are about to die. What condition are these people in? The last version willgovern upon their death. They may have been older and more vulnerable.

d. UPC (1990) requires writing, subscription, and attestation & signature by 2witnesses

e. If you fail to follow some of the formalities, the will might still be upheld asvalid.

2. In re Groffman his 2 witnesses were not there at the same time. Invalid.a. Presence Line of sight (I can see you) v. Conscious presence (physical; I

knew you were there)3. UPC 2-502: UPC makes it easier, but do not assume that this is the way it is supposed

to be done.a. Uses the term conscious presence if someone else is signing for the Testator.b. T may sign outside the presence of witnesses; Just needs to acknowledge

signature or will to the witnesses. Does not need to be expressly stated - Can be

inferred from Ts conduct. T can sign anywhere in/on the will. Does not have tobe at end.

c. Witnesses do not need to sign in the presence of the testator or of each other.d. Signed (mark, initial, nickname) by at least 2 witnesses, within a reasonable

time after witnessing or acknowledgement; Do not have to sign immediately.Could sign after Ts death.

4. Substantial Compliancea. Movement away from formalism (where intent did not matter)b. UPC 2-503: Harmless Error. Treated as if it was if 1 of 4 things are met by

clear and convincing evidence. Suddenly, we care about intent. If we screw up,we dont want to completely invalidate the will.

c. Dispensing Power (Court looks at it, and then asks Are we certain enough thatthis person intended this document to be his will by clear and convincing

evidence?) Ord. Substantial Compliance (well let it go; the will is ok)

5. In re Will of Ranney Witnesses signed the self-proving affidavit (last page, separatepaper), but not the actual will at the attestation clause. Not a valid will under commonlaw. Today: Substantial Compliance: If youre close enough, well let it go and hold thewill valid. How badly can you screw up? ie. not enough witnesses.

a. Attestation Clause says Im a witness and tracks the formal requirements for awill. Purpose is for evidence. One of several reasons you have witnesses is sothat when the testator dies, someone can say yes, this is correct and I was there.This clause adds prima facie evidence.

b. Self -Proving Affidavit UPC 2-504 Looks like an attestation clause but has anotary. This adds even more evidentiary value. Purpose is for conclusiveevidence (this goes beyond prima facie evidence) that the formalities were

followed. This takes care of having to go to court later on. It is conclusive aboutthe ceremony. It does not prove defenses and will not protect against everyattack. There is nothing to be lost by having this. This is a separate piece of paper witnesses sign twice.

c. Many states have included these together, and the witnesses just have to signonce.

6. In re Estate of Hall Couple saw a lawyer and drafted a will, man died before it wasformally written out. They signed and Lawyer notorized the draft. No witnesses. Theywent home and ripped up the earlier will. At common law: invalid will. Today: Mightbe ok under harmless error.


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7. Requirements of Witnessesa. Witness must only have legal competency Certain age (may be called to

testify)b. Witnesses used to have to be disinterested.c. Remedies: What do we do with the particular gifts to the beneficiaries?

1. Easiest you do not get the gift. Money goes back into the generalestate.

2. Second approach Purging statutes: Takes away any extra incentiveunder the will. Compare what youre getting under the will with what youwould have gotten under intestate succession. Any extra you got under thewill is taken away.

d. UPC 2-505 : Does not care about interested witnesses. Just need competency.Might be able to make an argument for undue influence.

e. Estate of Parsons 3 witnesses (E gets $100, M gets real estate, B gets nothing).2 disinterested witnesses needed for a valid will under common law. E decideslater to disclaim and argues it reverts back and so there are actually 2disinterested witnesses at the signing of the will. Court says a disclaimer does notrevert back; there must have been 2 disinterested at the execution.

8. Execution Ceremonya. A will is an ambulatory document and only becomes effective when you die.

b. General Procedures Pages are fastened together and specifies exact # of pages.Lawyer makes sure the testator read the will and understands it. Lawyer, testator,3 disinterested witnesses, and notary in a room (lawyer can be notary). Closedoor, no one enters, no one leaves - Satisfies the presence requirement.

c. Publication Testator must declare that this document is their will. Is this yourwill?

d. Testator signs every single page and at the end.e. Attestation Clause Witnesses sign (they do not have to know the contents of

the will just know that it is his will and that is his signature)f. Self-Proving Wills Testator and witnesses sign before notary, notary signs and

sealsg. Safeguarding Wills Lawyer should give copy to testator and keep original in

file.

h. Letter of Instruction no legal status, but very helpful. Heres where our assetsare, this is what property we own, heres our insurance policy, pension assets.Probate and non-probate, this is everything so you can find it. Inventory. Specialinstructions about funeral.

i. Videotape Many states (including IN) allow this. The videotape does notconstitute the writing. This is an additional safeguard for an execution ceremony see everything that happens, see them talk, see the witnesses, and see thateverything was done. Evidence.

B. Holographic (and Conditional) Wills 2-502b1. A will that is in the handwriting of the testator. If you have witnesses sign your

holographic will, then it is a holographic formal will.2. It is possible to have a holographic codicil to a formal will.3. Requirements

a. UPC 2-502b allows for holographic wills, whether or not witnessed, if thesignature and material portions of the document are in the testators handwriting.

b. This makes it easier to recognize a holographic will.4. Harmless error applies to holographic wills!5. Special Problems with Holographic Wills

a. Form if we have a formal will drafted by a lawyer, its pretty clear what it is.With a holographic will, all that is required is a writing. This could be all kindsof things letters, written in the side of a wall, on a bag, carved into a tractor. Itdoes not have to look like a regular legal document. It can be anything inpermanent form, as long as its writing.


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b. Intent you must know that this particular document was intended by thetestator to be his will. Or is this just a general exposition this is what I like, butits not really my will.

c. Conditional will Only effective if X happens or during a specific period oftime. If something happens to me on this trip... I am not executing a generalwill, but rather just a conditional will. If the condition does not come to pass andhe returns from the trip, did he mean for this to be effective only during thisperiod or as a general, open-ended if I die?

d. Kimmels Estate letter home if enny thing happens... and says where hismoney is and who is property goes to. Is this a will? Argue its a letter, no intentas a will.

C. New Will v. Codicil1. In re Estate of Kuralt Ct found the holographic will was a codicil to his 1994 formal

will. The letter met the threshold requirements for a valid holographic will. Intent.2. A codicil is a testamentary instrument that amends a prior will; it does not replace it.

D. Other Types of Wills1. Statutory Wills some states have authorized simple statutory fill-in-the-form wills.

They must be signed and attested in the same manner as any attested will. Many fail inprobate because they are improperly completed or executed.

2. Noncupative Wills Oral will. (oral is spoken, verbal is with words/written) This is a

special limited exception recognized in some states. Typically involves someone who isabout to die and all they have time to say is how they want their property to go.

a. It may be limited to personal property.b. Some may say you cannot contradict your formal will; you can only addc. Some say it has to be reduced to permanent form (writing) within a short period

of time. Typically not recognized if someone just testifies that it was said 6 moago.

E. Formal Wills Practice Concerns1. Children equal or unequal shares?

a. If you give it away in a will, its going to be public.b. 1st example: One child has done better financially than the other. Talk to the

children!c. If youre going to give different amounts, here are some options: Give equally in

the will (which is public), and then give more outside to one child (life insurancepolicy, side transfer of money/property)

d. Revocable intervivos trust. Never expect that disputes will go away after youdie.

2. Children equal or unequal sharing of power?a. Have multiple trustees and let the children decide for themselves.b. Let them have a hand in it if their money depends on it, theyll clear it up

together3. Valuable and household contents.

a. Personal items inventory them and mark them. People will come in and grab.b. Parents should ask the children. Parents can give it away while theyre still

alive. Out of estate.4. Succession of family business

a. This one asset constitutes most (or all) of the estate. Hard to divideb. One member wants to keep it going, one wants to sell, etc. One option is to have

that child buy out the other child(ren). Difficulty is valuation sweat equity, etc.Why should I pay you when something is valuable because of what I did to it?

c. Equalize outside the will life insurance. One gets the business, the othermoney.

5. The family residencea. May be painful or difficult to sell; What if one child wants it? What if one child

still lives there?b. Second spouse situations are also complicated. 1st kids kick out that 2nd spouse?


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c. Let the 2nd spouse have the house for a certain period of time, and then sell it.d. Life insurance gives the kids something right away. Use other nonprobate

assets.6. How much is too much?

a. Dont surprise them. Tell kids early if theyre not going to get as much as theythink.

b. You might want to get assets out of your estate before you die. You can give$11,000 per year to a person as a gift, which is not subject to taxes. Pay forcollege up front.

7. Controlling children with moneya. You have to marry someone of a particular religion this is illegal, it will be

struck down; you have to marry a particular person illegal.b. Things you can control (legal, but not always wise): you have to go to X school

and graduate before I die; I want you to graduate from X within a certain timeperiod; you can go anywhere you want, but I will only pay if you go to X; Go andbecome a doctor/lawyer you will get a bonus. This is an incentive.

c. They may be concerned about a kids work ethic. Give incentives to keep going.8. Lawyers People just want you to do it for them and tell them how its supposed to be

done. Fewer disputes about the estate will occur when people are happy. (angry clientswill sue).

C. Components of Wills

A. Integration1. All papers present at the time of execution, intended to be part of the will, are integrated

into the will.2. Look to intent. If there are just scratchings, argue that it was not meant to change the will

B. Republication by Codicil1. Codicil: An amendment to an existing will

a. Standards, intent, formalities are the same as with formal wills.b. Usually used to a make a relatively simple change to a pre-existing will.

2. A will is treated as re-executed (re-published) as of the date of the codicil. You rely onthe formalities and date of the second document (codicil).

3. Example: A testator revokes a 1st will by a 2nd will, and then executes a codicil to the 1stwill. The 1st will is republished, and thus the 2nd will is revoked by implication

4. Applies only to a prior validly executed will5. First ask, What is the relationship between these documents?

a. It may just be a codicil to the pre-existing willb. Or, the second document may be meant as a 2nd will to take the place of the 1stc. The first sentence should explain what the document is. If there is no language,

you have to look at the underlying structure and terms.6. If it is a codicil, there is a long-standing doctrine about republication. It shifts the date of

the 1st will.a. When you execute a codicil, the will is republished as of the codicil date.b. The two are meant to be looked at together, and are considered to have the same

date.7. When it is republished, you are relying on the 2nd instrument

C. Incorporation by Reference

1. UPC 2-510: Any writing in existence when a will is executed may be incorporated byreference if the language of the will manifests this intent and describes the writingsufficiently to permit its identification

2. Clark v. Greenhalge specific, written bequests of personal property contained in anotebook were incorporated by reference into the terms of her will.

a. There was a list, then a will, then a change, and then a codicil.b. Argue that the changes are incorporated by reference because of the

republication by codicil.3. You can have your will, and then incorporate by reference another document, which now

becomes part of the will.


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4. Traditional limitations at common law:a. The will itself must make reference to this other documentb. This document has to be in existence on the date that the will is executedc. Why? Worry that it could be changed later w/o formalities and increased

problems of fraudD. UPC Separate Writing

1. UPC 2-513: This is some other piece of paper, maybe all in handwriting, and you haveto figure out if it is a part of the will.

a. It has to be mentioned in the will.b. Only tangible, personal property not the home, stocks, or moneyc. Must be signed by the testator and describe the items with reasonable certainty.

The rest of the list does not have to be handwritten.d. It is specifically different from common law incorporation by reference: It may

be referred to as one to be in existence at the time of the testators death. Thetestator can write it later.

e. It may be prepared before or after the execution of the willf. It can also be altered later by the testator

2. This is a very limited doctrineE. Acts of Independent Significance

1. UPC 2-512

2. You will have to do a little investigation. Look outside the will to interpret andunderstand what it means. Is there a car? How many employees? Who are they?

3. Ex: I give you the car that I own on the date of my death. This is vague and is allowed.4. Ex: I want to give $1,000 to each of my employees who work for me on the date of my

death.5. If it is accessible to someone else (desk drawer), there is a concern that the person will

change the will. Concern with fraud. Safe deposit boxes are ok and will be upheld asAIS.

D. Revocation of Wills

A. UPC 2-507: Revocation by Writing or Physical Act. Easier than common law. The cancellationdoes not need to touch any of the words on the will.

B. You need the same standards to revoke it as you do to make it. (Intent, formalities, etc) You needboth the intent and the act. Otherwise, its not revoked.

C. Revocation by Subsequent Instrument1. Typically, you revoke a will be making a subsequent will. I hearby revoke all other wills

and codicils... so that there is no doubt about it.2. If I just revoke the codicil, then the underlying will still stands.3. If I just revoke the will (and not the codicil), what happens? The codicil is also deemed to

be revoked when the underlying will is revoked.4. If the 2nd will makes a complete disposition of the estate, a presumption arises that the 2nd

will was intended to replace the previous will.5. If the 2nd will does not make a complete disposition of the estate, a presumption arises

that the 2nd will was intended to supplement (codicil) rather than replace the previouswill.

D. Revocation by Physical Act1. Total physical revocation

a. Removal of Ts signature (tear, erase, line thru, etc.) constitutes a sufficientrevocatory act to revoke the entire will.

1. T can also direct someone to remove his signature under the consciouspresence test. Does not need to be in Ts line of sight.

b. Harrison v. Bird Attorney tore up Birds will at her request, but not in herpresence. She never wrote a new will. Presumption that she destroyed her willherself after the attorney sent her the pieces. Will was revoked.

c. Thompson v. Royall She wanted to revoke her will and codicil, but decided notto destroy it so that she could use it as a memoranda to write her new will. Shehad the intent, but did not write in her own handwriting that it was revoked. She


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did not physically mutilate or deface or cancel any written parts of the will.Revocation was ineffectual. The requisite act was not done. Different result underUPC.

d. First thing you have to ask is whether the revocation is a subsequent instrument?Is it a holographic will? Second, did she revoke it by physical act?

2. Partial physical revocationa. UPC allows partial physical revocation; some states also recognize itb. This is an issue because of the problems for fraud.c. First step, does this handwriting constitute a valid holographic will? Does this

state recognize them? Then what about partial physical revocation?E. You can probate a lost will. There are ways to prove the existence of the will.F. I cross something out and write something else in there. What does this mean?

1. First , does this state recognize valid holographic wills? If yes, is this a valid holographiccodicil? Apply the normal standards.

2. Second , if this is not the case, then ask if it is a partial physical revocation? Two parts:Revoking by the line thru and writing on it.

3. If the state does not recognize holographic or partial physical revocations, then the doodleon the paper means nothing.

4. Third , if it is a partial physical revocation, then it may be a case where I want to applyDDR. Maybe I was mistaken by what I did and I didnt realize what would happen.

G. Relevant Acts After Revocation Arguments for Undoing a Revocation1. Dependent Relative Revocation

a. If the testator purports to revoke his will upon a mistaken assumption of law orfact, the revocation is ineffective if the testator would not have revoked his willhad he known the truth. Its not what T thought was going to happen he wasmistaken.

b. Three options.1. What is it that this person thought they were doing? Intent. Give T what

he wanted (what did T really want to do? What did T think he was doing?)You cannot actually do this.

2. T was mistaken, so what is the impact of this if we apply the law? Asapplied (What would the law require if we just applied the law to what Tdid? This is a true legal ruling)

3. What would happen if we just undid it and went back to square one?Undo the revocation and pretend it didnt happen.

c. All DDR is about is choosing which of the last 2 options are closer to the intent(as applied or undone). You can never give them what they really want. DDR isdesigned to come as close as possible to what T wanted; there should be goodevidence of intent.

d. Estate of Alburn Milwaukee will in 1955 and Illinois will in 1959. Shedestroyed the Illinois will under the mistaken belief that the Milwaukee willwould control. Under DDR, Illinois will goes to probate. (State specific)

2. T crossed out $10,000 and wrote in $15,000. The first is a revocation and the second is anattempted something.

a. DDR analysis:1. First step, does the state recognize holographic wills? If so, does this

scribble satisfy the requirements for holographic wills? (material portionchanged and signed) If yes, you are done. If a state does not recognizeholographic wills or if it is not valid as a holographic will, then go to thenext step.

2. Second, does the state recognize partial physical revocations? If no,then its just a doodle and means nothing. If the state does recognizepartial physical revocation, then you go to DDR. Two options. As applied he gets $0. Undone then he gets the $10,000.

3. UPC DDR states that revival will now cure most problems and will not have to go thruDDR


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4. Revivala. UPC 2-509: Whole, partial, and 3rd will revocationb. I revoke will #1 with will #2. What if I decide to revoke will #2, with nothing in

its place? Does will #1 come back? Three options:1. A few states will give will #1 full revival.2. Some states have a modified version of that. Will #1 will come back if

that was the intent of the testator. UPC says the revocation of #2 willrevive #1 if it is evident from the circumstances of the revocation of #2 orcontemporaneous or subsequent declarations that T intended #1 to takeeffect as executed. The UPC presumes that Ts act of revoking #2 wasnot intended to revive #1.

3. Or, some states will say no revival at all because the formalities werenot followed. You have to execute the will according to the formalities andyou did not.

E. Defenses to Formation of Wills and Will Contests

A. Mental Capacity1. UPC 2-501: An individual 18 yrs or older who is of sound mind may make a will.2. Restatement 8.1: Testator must be 18 and capable of knowing and understanding in a

general way a. the nature and extent of his property (what property I have)

b. the natural objects of his bounty (people to give it to)c. the disposition that he is making of that property, andd. capable of relating these elements to one another and forming an orderly desire

regarding the disposition of the property.e. The test is of capability, not of actual knowledge.

3. Requisite intent must be there for making a will/codicil, revocation, etc.4. In re Estate of Wright gave $1 to many relatives; Witnesses testified of Wrights

unsound mind and lack of testamentary capacity. Will upheld. You can be weird.5. Capacity to make a will requires less mental ability than to manage ones investments,

make a contract, or make a gift. However, legal capacity to make a will requires agreater mental competency than is required for marriage.

B. Insane Delusion1. General incapacity means you dont have the capacity to make the will the whole will is

struck down.2. Insane delusion is different it is an unreasonable belief about a particular or narrow

topic. You may have had general capacity, but you had delusional beliefs about anarrow subset of things. The argument is that this goes to particular provisions in thewill.

3. In re Strittmater T was feminist and left her estate to the Natl Womens Party. Insanedelusion affected the entire will - Will not upheld. Different result today.

4. In re Honigman Testator cut off his wife; insane delusion that his wife was unfaithful;Court remanded to allow the jury to decide if he was delusional. If relatives can comeforward and give another reason, (help poor relatives, etc.), then wife loses.

5. Insane delusion is a belief not susceptible to correction by presenting the testator withevidence indicating the falsity of the belief.

a. A mistake is susceptible to correction if the testator is told the truth.

b. Courts do not reform or invalidate wills because of mistake.6. You have to show the causation; show that this defect caused a manifestation in the will.7. If you can come up with an alternative explanation, that will undercut any of these

claims.C. Undue Influence

1. To have undue influence, there must be coercion. Influence alone is ok.2. Iowa: The rule for rebutting the presumption of undue influence arising from a

confidential relationship only requires the grantee of a transaction to prove by clear,satisfactory, and convincing evidence that the grantee acted in good faith throughout thetransaction and the grantor acted freely, intelligently, and voluntarily.


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3. Lipper v. Weslow Testators will left nothing to her daughter-in-law or grandchildrenfrom one son; other son wrote will. No evidence of undue influence.

4. In re Will of Moses Undue influence found where T went to another lawyer to draft herwill and left everything to her other lawyer-lover.

5. In re Kaufmanns Will Undue influence found with gay men.6. Most commonly used defense.7. Its always a good idea to get written letters explaining reasons and that it is their

intention to do this.D. Fraud

1. Fraud occurs where the testator is deceived by a misrepresentation and does that whichthe testator would not have done had the misrepresentation not been made. Themisrepresentation must be made with both the intent to deceive and the purpose ofinfluencing the testamentary disposition.

2. Any provision in a will procured by fraud is invalid. A fraudulently procured inheritanceis invalid only if the testator would not have left the inheritance had the testator knownthe true facts.

3. Fraud in the inducement occurs when a person misrepresents facts, thereby causing thetestator to execute a will, to include particular provisions in the wrongdoers favor, or torefrain from executing or revoking a will. (A promises testator that he will conveyproperty to B, but has no intention of doing so.)

4. Fraud in the execution occurs when a person misrepresents the character or contents ofthe instrument signed by the testator, which does not in fact carry out the testatorsintent. (Bad eyesight)

5. Puckett v. Krida 2 nurses persuaded testator to leave everything to them, making Tbelieve her family wanted to put her in a nursing home. This was fraud.

E. Tortious Interference with Expectancy1. Intentional interference with an expected inheritance or gift is a valid cause of action.2. Plaintiff must prove that the interference involved conduct tortious in itself, such as

fraud, duress, or undue influence. Cannot be used when challenge is based on mentalincapacity.

3. Marshall v. Marshall Anna Nicole; Howards son tortiously interfered with her $ byslowly draining his fathers assets.

4. Test: A plaintiff must prove:

a. The existence of an expectancyb. a reasonable certainty that the expectancy would have been realized but for the

interferencec. intentional interference with that expectancyd. tortious conduct involved with the interference, ande. damages.

5. An action for tortious interference is not a will contest. It seeks to recover tort damagesfrom a 3rd party

F. Special Precautions against Will Contests

A. Special Precautions1. Get clients to write, in their handwriting, the details of the dispositions. Advise; ask for

letters.2. Videotape the testator explaining why he wants to dispose of the property in that way.

3. Attorney should document mental capacity.4. Have the will contain a no-contest clause.

B. The Special Case of No-Contest Clauses1. UPC 2-517: A no-contest clause provides that a beneficiary who contests the will shall

take nothing. The provision is unenforceable if there is probable cause.2. Enforcement of a no-contest clause could discourage unmeritorious litigation, family

quarrels, etc.3. On the other hand, it could also inhibit a lawsuit proving forgery, fraud, or undue

influence.


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4. No-contest clauses do not mean that all types of litigation are out. States will often readin a good faith and probable cause requirement. You want legitimate concerns to beraised.

G. Construction of Wills

A. Construction Generally1. Wills are not construed in the same was as contracts. Contracts are between 2 people,

wills are documents of a single person.B. Latent and Patent Ambiguities

1. How obvious is this construction issue on the face of the document?a. Patent ambiguity: You can just look at the document and know there is a

problemb. Latent ambiguity: If you have to go outside and figure out the problem

2. Estate of Russell Latent ambiguity about dog: whether it was to receive half the estateor just be cared for by Quinn, named in will. A dog cannot be a beneficiary, so the giftto Roxy is void. Half the estate passes to heirs at law.

C. Reformation1. General equitable remedy can be used for a will2. Mistakes are made. They can reform the will to conform to the true intent of T.

D. Death of Beneficiary Before Death of Testator Anti-lapse Statutes1. UPC 2-603, 5 Applies only to the devises to a grandparent or a lineal descendant of a

grandparent (stops at 2nd line collaterals). Includes a devise to a stepchild. This is merelya default rule, applying only when T fails to evidence a contrary intention.

a. People who are not family members are excluded (Spouses, friends, etc).b. Anti-lapse statutes substitute other beneficiaries for the dead beneficiary if

certain requirements are met. Issue (children) are generally substituted for thepredeceased devisee.

c. 2-603b3 If you do not want this anti-lapse statute to apply, what kind oflanguage do you need? If he survives me and to my surviving children arenot enough.

2. At common law, the gift to the dead beneficiary just lapsed. He did not get it at all.a. Specific gifts (car, boat), general gifts ($10,000), and residuary gifts (catch-all,

every will should have a residual clause).b. If a specific or general gift lapses, then the gift goes down to the next level,

typically to the residuary clause. Somebody will get it.c. If there are multiple beneficiaries at the residuary level, and one dies, hes just

knocked out.3. Not every gift is covered by the anti-lapse statutes.4. What if A is dead on the date that I execute the will, but I dont know it? Typically a void

gift. Do anti-lapse statutes cover these?5. Allen v. Talley

a. Facts: Mary devised all her property to her 5 living siblings. Only 2 were stillalive when she died, but there were nieces and nephews from the deceasedsiblings

b. Issue: Whether will contains words of survivorship which preclude applicationof the anti-lapse statute? Yes. Living brothers and sisters are words ofsurvivorship. Neither those who did not survive Mary nor their heirs are entitled

to take under her will.6. Majority of cases held that an express requirement of survivorship states an intent that the

antilapse statute not apply (ie kids are not substituted for parent). The UPC revised thisbelief, holding that to my surviving children and if he survives me are not sufficientindications of an intent contrary to the application of the section.

7. UPC 2-604: Part b deals with multiple beneficiaries in the residuary clause. If A and Bare named in the residuary clause, and A dies before T, the rest of the residuary goes toB. It does not go to the intestate share.

E. Changes in Property After Execution of a Will1. Ademption by Extinction


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a. Specific devises (Blackacre, diamond ring) of real and personal property aresubject to the doctrine of ademption by extinction. (Ex. T devises X to B in herwill, but sells X for Y before T dies. B has no claim to Y.)

b. Ademption does not apply to general ($100,000), demonstrative ($100,000 to bepaid from my GM stock), or residuary devises.

c. Under identity theory of ademption, if a specifically devised item is not in Tsestate, the gift is extinguished. Under intent theory, the beneficiary may beentitled to the cash value of the item or replacement item.

d. Ways to get around identity theory: Classify the devise as general ordemonstrative, rather than specific; Classify the inter vivos disposition as achange in form, not substance; Construe the meaning of the will as of the time ofdeath rather than as of the time of execution; Create exceptions

e. UPC 2-606, 8 adopts the intent theory, but creates a presumption in favor ofademption. The party claiming the cash value has the burden of proving thatademption is inconsistent with Ts intent.

1. T devised 1988 Buick to X. T sold Buick and bought BMW. X getsBMW

2. T devised 1988 Buick to X. T sold Buick and bought shares in stock. Xdoes not get shares. X would get car even if not bought with Buickproceeds.

3. Burglar stole diamond ring but not brooch. B still gets brooch, Ashould get $

4. X not entitled to value of painting when T gives it away to charity.2. Ademption by Satisfaction

a. Applies when T makes a transfer to a devisee after executing the will. (T devises$50k to B in will. After execution, T gives $30k to B. Presumption that gift wasin partial satisfaction of legacy, so B will only take $20k at Ts death)

b. Applies to general bequests, not specific. (If family Bible is devised by will, butgiven before death, it is considered adeemed by extinction)

c. UPC 2-609 requires intent of T to adeem by satisfaction to be shown inwriting

1. T can also satisfy a devise to A by making a gift to B.3. Exoneration

a. Some states hold that mortgage or debt where T is personally liable is paid outof residuary estate so that title will pass free of the lien.

b. UPC 2-607: A specific devise passes subject to any mortgage interest existingat the date of death, without right of exoneration, regardless of a general directivein the will to pay debts. This is the default rule.

4. Abatementa. Problem when the estate has insufficient assets to pay debts as well as all the

devises; some devises must be abated or reduced.b. Property not disposed of by will is abated first, then residuary devises, then

general, then specific and demonstrative.c. UPC 3-902: if the testamentary plan...would be defeated by the usual order of

abatement, the shares of the distributees abate as may be necessary to give effectto the intention of the T.

d. Wise to make substantial devises in the form of shares (%s) of the residue.F. Other Problems of Construction

1. Omission of Issue (Pretermitted Children)a. A child has no statutory protection against intentional disinheritance by a parent.

However, the law does not favor cutting out the child when there is no survivingspouse.

b. Pretermission statutes are designed to prevent the unintentionaldisinheritance ofdescendants.

1. Some statutes include every child, while other states will just apply it toafter-born children this is a huge limitation.


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2. This principle only applies to probate property/assets.c. Azcunce v. Estate of Azcunce Whether a child who is born after the execution

of her fathers will but before the execution of a codicil is entitled to take astatutory share of her fathers estate? No.

1. Ts child, who is living at the time the codicil is executed is not apretermitted child within the meaning of the statute.

2. Her status as a pretermitted child was destroyed at the execution of thecodicil. She is automatically excluded.

3. Because she was omitted from the will, she lacked standing to sue herfathers lawyer. This is a terrible injustice.

d. Wills often define who a child is may include stepchildren, adoptedchildren, names them, and then says and to any child or children hereafter bornto me.

e. Some states will look to intent in other places, other states will say it has to be inthe will itself. Assuming the statute applies, some states will put the omittedchildren back in. Maybe give them an intestate share. This approach does nothave to correlate with what was given to the other kids.

f. UPC 2-302 Omitted Children: Gives a share equivalent to what the other kidsgot; also provides the case of the mistaken belief that the child is dead.

2. Gifts of Principle or Interest at Certain Ages

a. Assume there is a gift in a will to a minor, and the minor is supposed to get itwhen he turns 21.

b. Clobberies Case - This case deals with the problem when the child beneficiarydies early. Does it go to the childs estate or back to Ts estate? Was the giftvested or contingent in reaching a certain age?

1. Where a sum of money was to be paid with interest to a woman whenshe reached 21 or got married, and she died before either, the money goesto her executor. Principle and interest (income) is the equivalent of beingvested and goes to the kids estate.

2. Where a sum of money is bequeathed to someone at 21, and he diesbefore then, then the money is lost. The money has not vested. The moneygoes back to the testators estate.

3. If money is to be given to one, to be paid at 21 years, and he dies

before, the money goes to the executor of the kids estate.c. A gift of the entire income to a person, with principal to be paid at a certain age,

indicates survival to the time of possession is not required.d. Today, there are a number of states that say all 3 are the same goes to kid

3. Gifts to Classesa. I want to give $5k to each of my grandchildren. This is easy. I want to give

$50k to my grandchildren. The number of people in this group can go up ordown, making it debatable about who the money will be divided between.

b. Class-closing limits the total number of people who can be in this group.c. The Class-Closing Rule

1. In a gift to B for life, then to Bs children, all of Bs children will bealive (or in gestation) when the class is physiologically closed at Bsdeath.

2. In a gift to A for life, then to Bs children, when does the class close?3. *Under the class-closing rule (or rule of convenience common law), a

class will close whenever any member of the class is entitled to possessionand enjoyment of his share. No one else can enter, but people can still dropout. Immediate gift if someone can take right away, the class closes.

4. Ex: T bequeaths $10k to Bs children. B is alive, and has 2 kids, C andD. C and D can demand immediate possession and the class closes. Eachgets $5k. 1 year later, E is born to B. E does not share in the bequest.

5. However, if B had no children before Ts death, the class would notclose until Bs death because it is assumed that T intended all class


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members, whenever born, to share. The class does not close until the deathof the designated ancestor, B.

6. Ex: T bequeaths $10k to children of B who reach 21. B has children,but none are 21 when T dies. The class will close when a child of Breaches 21. Postponed gift.

7. T bequeaths $15k to the children of B who reach 21. At Ts death, Bhas 2 children C and D. Three years later, E is born to B. Then, C reaches21. On year after, F is born. D dies at age 20. E then reaches 21. F thenreaches 21. What result? When C reaches 21, C can take and the classcloses. 1/3 goes to C right now. No additional children can be added. F isexcluded, D drops out (half of Ds $5k is distributed to C), E takes $7.5kat 21. This was a postponed gift.

8. T bequeaths a fund in trust to pay the income to A for life, then todistribute the principal to the children of B who reach 21, and in themeantime the children of B who are eligible to receive, but have not yetreceived, a share of the principal are to receive the income. At As death,B is alive and has one child, C (age 5). After A dies, the following eventsoccur: D is born to B; C reaches 21; one year later, E is born to B; D and,later, E reach 21. The first member of this group who meets this conditioncloses the class. The class closes when C reaches 21. Only C and D are in

the class. Half goes immediately to C. What happens while we wait for therest to reach 21? The money goes equally to those who are waiting toreach 21. So, once the class closed, the money is distributed.

d. Children is the first generation. Issue includes the children and all thesubsequent descendants after that (children, grand, great-grandchildren, etc)

e. A gift to a class of remaindermen will not close until the life tenant is dead.f. Antilapse statutes are designed to carry out the average testators intent and that

the average testator would prefer for the deceased beneficiarys share to go to thebeneficiarys descendants rather than to the surviving members of the class.

4. Gifts to A and Her Children The Rule in Wilds Casea. To B and her children. If B has children at the time of the devise, B and her

children take as tenants in common (after-born children are excluded). B does nottake a life estate and the children a remainder. If B had no children, some states

would give at least a life estate, others would give a fee simple.5. Gifts to A for Life, Remainder to As Heirs The Rule in Shelleys Case

a. If land were conveyed to A for life, then to As heirs, the attempted creationof a contingent remainder in the heirs was not recognized.

b. The life estate merged into the remainder, giving A a possessory fee simpleabsolute.

c. Has been abolished in practically all states (not IN).H. Restrictions on the Power of Disposition: The Special Case of Protection for the Surviving

Spouse

A. An Overview of Marital Property Systems1. Typically, the spouse gets half.2. Separate (Common Law) Property H and W own separately all property each acquires

a. Most states give the surviving spouse an elective (forced) share in the estate of

the deceased spouse. Usually 1/33. Community Property H and W own all acquisitions from earnings after marriage in

equal undivided shares.a. Deceased spouse owns and has testamentary power over only his share.b. Property acquired before marriage or thru gift, devise, or descent is kept

separate.B. Right of Surviving Spouse to Support

1. Civil Unions Gay couples should have the same rights, and tell the legislature that theyhave 2 options: Everyone is in the category of marriage, or create a category of civilunions.


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2. Same Sex Marriage Mass case (Goodridge): Takes a different approach and says youcannot have the civil union option. There is an equal protection aspect, so its allmarriage.

C. Elective Share Forced share applies only to probate property. This is the source of a lot ofproblems. Angry husband transfers everything into non-probate property or to kids, girlfriend, etc. totry and leave the surviving spouse as little as possible.

1. Elective Share mandates a certain share, automatic, to the surviving spouse. It iselective because it gives a choice to the surviving spouse: You can either take what isgiven in the will, or take the mandatory elective share.

a. An elective share re-writes the will.b. For the most part, the share under intestate succession is the same as what the

spouse will get under the will.2. Progressions to remedy this:

a. Common law illusory transfer; this transfer is illusory, well take it back andmake the probate pot a little bigger; this is case-by-case

b. Statutes some states have tried this to make it more uniform; take this illusorytransfer doctrine and expand it to make sure there is a clear statute. Problem withthese is that they are limited to bad spouse situations.

c. UPC augmented estate; this is a more comprehensive remedy. This isspecial to the UPC. (see below)

D. Provisions on Restraint of Marriage (Wills)1. You must marry a Catholic in order to get this money is struck down. Illegal; Public

policy2. You get this money, but if you remarry, you get nothing. This will not be upheld.

E. The Special Remedy of Augmented Estate and Its Alternatives; Elective Share1. UPC 2-202: The central idea of the elective share is to add up all the property of both

spouses and split it according to a percentage based on the length of the marriage. Thisaugmented estate may include transfers made before marriage, as well as those during.This was to resemble the community property system.

a. Bad spouse v. Good spouse: The UPC tries to look at the big picture. You mayundo some transactions to 3rd parties. You draw assets back into probate, even ifthey had been transferred earlier.

1. What if the surviving spouse already has a fair amount of money? If

you were taken care of thru these lifetime transfers, we will look at the bigpicture. It may be that the lifetime transfers add up to your entitled share.If so, the surviving spouse may not get any more. Look at all the transfers(lifetime, non-probate) to define the augmented estate.

2. Get around the bad spouse situation by looking at all of the lifetimetransfers. If there is not enough, then pull back some of the transfers

F. The Special Case of Community Property1. A widows election involves a will executed by the husband devising all the community

property in trust to pay the income to his wife for life, with remainder to others on thewifes death, and requiring the wife to elect between surrendering her half of thecommunity property and taking under the husbands will.

I. Will Substitutes: Avoidance of Probate

A. Will Substitutes and Avoidance of Probate Generally

1. Four main (pure) will substitutes constitute the core of the nonprobate system (transfersof property on death):

a. Life insurance1. Functionally indistinguishable from a will it is revocable until the

death of T and the interests of the devisees are ambulatory (nonexistentuntil Ts death)

2. Beneficiary in life insurance policy serves precisely the function of thedesignation of a devisee in a will.

b. Pension accountsc. Joint accounts


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d. Revocable trusts2. Each reserves to the owner complete lifetime dominion3. Imperfect will substitutes include joint tenancies the cotenant acquires an interest that

is no longer revocable and ambulatory. A death certificate suffices to transfer title.4. Most will substitutes are asset-specific, they avoid probate, and the formal requirements

of a will do not govern.B. Contracts Relating to Wills

1. Contracts to Make a Willa. UPC 2-514: The will must set forth the material provisions of the contract or

make express reference to the contract and extrinsic evidence to prove the terms,or there must be a separate signed writing evidencing the contract.

b. A person may enter into a contract to make a will or a contract not to revoke awill

1. Contract law, not the law of wills, applies.2. If, after a contract becomes binding, a party dies leaving a will not

complying with the contract, the will is probated but the contractbeneficiary is entitled to a remedy for the broken contract.

3. The remedy amounts to either the value of the property which was tocome under the contractual will or an order compelling the decedentssuccessors to transfer the property to the contract beneficiary.

c. Many states (UPC) subject contracts to make a will to Statute of Frauds(writing)

2. Contracts Not to Revoke a Willa. UPC 2-514b. Typically arise where husband and wife have executed a joint will or mutual

will.1. These contracts are a very bad idea; these are disfavored2. 2-514 states that the execution of joint or mutual wills does not create

a presumption of a contract not to revoke the will(s).c. A contract not to revoke is unenforceable unless it is proved by clear and

convincing evidence; some courts find that the use of pronouns such as we andour imply a contract not to revoke in joint wills.

d. Reduce this danger by inserting in every joint or mutual will a provision that the

will was or was not executed pursuant to a contract. Joint wills should not beused.

e. A contract not to revoke a will is breached if a party dies leaving a will that doesnot comply with the contract. This usually occurs because T affirmativelyrevoked the contractual will.

f. Via v. Putnam Children, as 3rd party beneficiaries under the mutual wills oftheir parents, should not be given creditor status when their interests contravenethe interests of the surviving spouse under the pretermitted spouse statute.

1. Mom and Dad executed mutual wills. Mom died. Dad remarried andfailed to execute a subsequent will to provide for his 2nd wife. His mutualwill was admitted to probate

2. 2nd wife petitioned to take an elective share. Children argued that byremarrying, dad breached his contract in the mutual will. They also argue

that they are 3rd

party beneficiaries of the contract between the parents anddeserve creditor status (which would give them priority over the share ofthe pretermitted spouse and would receive the entire estate)

3. Legislature did not intend to allow creditors claims by 3rd partybeneficiaries of previously executed mutual wills to take priority over thestatutory rights of a pretermitted spouse and deny the pretermitted spouseany share in the decedents estate.

3. Pay-On-Death Provisions in Contractsa. Property will be automatically transferred upon your death.


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b. Wilhoit v. Peoples Life Insurance H died and left money to W; W had right todispose of the fund as she saw fit. W could change the beneficiary of her trust(consisting of proceeds from late husbands insurance policy) thru her will.

c. Estate of Hillowitz Partnership agreement that stated the dead partners shareshould be transferred to his surviving spouse is valid and is not a testamentarydisposition invalid under the statute of wills.

d. UPC 6-101: Nonprobate Transfers on Death1. Provisions for nonprobate transfers are nontestamentary.2. Does not require survivorship by POD beneficiaries of contracts3. It does include an antilapse provision for POD designations, which

substitutes the issue of the named beneficiary who does not survive thebenefactor. ( 2-706)

e. Cook v. Equitable Life Assurance H named W as beneficiary to insurancepolicy. They divorced. He remarried and had kid. Made will leaving everything,including life insurance, to W2 and son. W1 was still beneficiary of policy,which was not revoked by their divorce. Policy requires written notice tocompany to change the beneficiary. Will is not enough.

C. Life Insurance1. Principle purpose is to shift the financial risk of dying young to an insurance company2. Life insurance is also commonly purchased to protect a partnership or closely held corp

3. Whole life insurance (or ordinary or straight) is a combination product involvingboth life insurance and a savings plan.

4. Term life insurance has no savings feature. It can be purchased for less than a wholelife policy. This is sensible for young couples who have (or plan to have) children.

D. Pension Accounts1. Annuity is a payment every year for the rest of the beneficiarys life2. Defined benefit plan ER promises to pay an annuity on retirement; risk is taken by the

ER and ER makes the choice of investments3. Defined contribution plan both ER and EE make contributions; shifts risk to EE and

allows EE to choose investments. Most are this way.4. Egelhoff v. Egelhoff H designated W as beneficiary of pension plan. They divorced, he

died, and his prior children want the money. ERISA pre-empts state statute and ex-wiferetains nonprobate asset.

5. Traditional IRA you dont pay money up front, you pay taxes when you die6. Roth Account (IRA) If youve already paid taxes on this money youre putting in, they

promise you will not have to pay taxes on this money ever again.7. 401K Pension accounts that you have with your ER; ER promises that he will

contribute a certain amount of money to your 401K. EE gets to choose where to put themoney. This is a defined contribution plan. ER will give money up front and EE gets tomake the decisions about the money. EE is responsible.

E. Multiple-Party Bank Accounts1. Include a joint and survivor account, a POD account, an agency account, and a savings

account trust.2. With a joint and survivor bank account owned by A and B as joint tenants with right of

survivorship, both A and B have the power to draw on the account and the survivorowns the balance of the account, which will not pass thru probate.

3. The UPC has devised a newer type of bank account to transfer property upon deathwithout probate. This makes it easier to make non-probate transfers. This may be verysignificant for small estates or people with very little money.

4. 6-211 Life; 6-212 Death5. *** 6-213: You are not able to change, thru the will, survivorship designations of non-

probate assets. (See JT below)F. Joint Tenancies

1. In General


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a. The creation of a joint tenancy in land gives the joint tenants equal interestsupon creation. Joint tenancies in land require the agreement of all tenants to takemost important actions. They are imperfect will substitutes.

b. ***A joint tenant cannot devise her share by will. If a joint tenant wantssomeone other than the co-tenant to take her share at death, she must sever thejoint tenancy during life, converting it into a tenancy in common.

c. A creditor of a joint tenant must seize the joint tenants interest during life.2. Practice Concerns

Life Death

JT Yes (A and B own it together during As life) Yes (B gets balance at As death)

Agency Some (B can draw on account during As life) No (B is not entitled to the balance at As death)

POD Mine (no ownership interest while As alive) Yours (when A dies, it goes to B)

***People may want an Agency or POD account, but the bank just gives them the standard JTaccount. This causes big problems at death. Misunderstanding.

G. Deeds of Land1. Assume my biggest asset is land and I dont want a will. With this deed I want to do

something effectively like a will but without a will or lawyers.2. I would deed it to you, but with conditions. I will give it to you when I die, but if I really

need it, I want to be able to get it back.H. Gifts of Personal Property

1. Why do we care about gifts? If I have given this property away during my lifetime, it isnot part of my estate. It was not property I owned upon my death. Its out of my estate.

2. Two classificationsa. Inter vivos (lifetime) gifts Once the item has been delivered, I cannot take it

back. I have transferred it and it is your property.b. Gifts causa mortis If I dont die, I can get it back. I gave you the keys to the

car, but I recovered and did not die. For gifts causa mortis, I have to die. Thesegifts can be revoked.

3. For a gift, I need intent and delivery. The twist is that there can be different types of

delivery.a. Actual delivery a diamond ringb. Symbolic/Constructive delivery I gave you the keys to the car; access to the

giftJ. An Overview of Trusts

A. Terms and General Concepts1. Uniform Trust Code: Not widely adopted.2. A trust is a device whereby a trustee manages property as a fiduciary for one or more

beneficiaries. The trustee holds legal title to the property. The beneficiaries holdequitable title and are entitled to payments from the trust income and sometimes fromthe trust corpus, too. The trust provides managerial intermediation.

a. Revocable trust : O declares herself trustee of property to pay the income to Ofor life, then on Os death to pay the principal to Os children. O retains the

power to revoke the trust. A revocable trust avoids the delays, costs, andpublicity of probate. This is the biggest will substitute used for estate planningtoday. These trusts are nonprobate assets.

b. Testamentary marital trust : Federal estate tax law permits a marital deductionfor property given to the surviving spouse. The deduction is allowed for a lifeestate given to the spouse. H devises property to X in trust to pay the income toW for her life, and on her death to pay the principal to Hs children. This trustqualifies for the marital deduction. No estate taxes are payable at Hs death; theyare postponed until Ws death.


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c. Trust for incompetent person : Os son A is mentally impaired and unable tomanage his property. O transfers property to X in trust to pay the income to A forlife, remainder to As issue, and if A dies without issue to his sister B.

d. Trust for minor : Federal gift tax law allows a tax-free gift of $11k per year to adonee. A gift to a minor creates problems with managing property. O creates atrust to use the income and principal for the benefit of A before she reaches 21and to pay A the principal when she reaches 21. Every year, O can make a tax-free gift of $11k to the trustee for A.

e. Discretionary trust : T devises property to X in trust. The trust provides that thetrustee in its sole and absolute discretion may pay the income or principal to A,or for As benefit, as the trustee may see fit. Useful in lessening the tax burden onfamily wealth by distributing income to members of the family in the lowest taxbrackets, and useful in preventing creditors from reaching the income or principalof the trust.

f. Public Trust : Charitable trusts with large number of beneficiaries.3. A trust ordinarily involves at least three parties: the settlor/trustor who creates the trust,

the trustee, and one or more beneficiaries.a. Settlor

1. The trust may be created during the settlors life (an inter vivos trust created by a declaration of trust or by a deed of trust) or created by will (a

testamentary trust)2. The declaration of trust is often used as a will substitute and the settlor

is the trustee. All that is necessary is that the donor manifest an intentionto hold the property in trust no delivery or deed of gift is required.Although a declaration of trust of personal property may be oral, if thetrust is to be funded with real property, the Statute of Frauds requires awritten declaration of trust.

3. A settlor may be both a trustee and a beneficiary. In order to have avalid trust, the trustee must owe equitable duties to someone other thanherself.

4. If the settlor is not the trustee of an inter vivos trust, a deed of trust isnecessary. The deed of trust or property must be delivered to the trustee. Ifa trust is created by will, the settler can obviously not be the trustee.

b. Trustee1. There may be one trustee or several trustees, who may be an individual

or corporation.2. Trustee may be the settlor or 3rd party, or a beneficiary.3. If the settlor intends to create a trust but fails to name a trustee, a court

will appoint a trustee to carry out the trust. Trust wont fail for lack oftrustee.

4. If the will names someone as trustee but that person refuses or dies, andthe will does not make a provision for a successor trustee, the court willappoint one. This does not apply if the court finds that the trust powerswere personal to the named trustee.

5. To safeguard the beneficiary against mismanagement by the trustee, thetrustee is held to a fiduciary standard of conduct. Duties of loyalty and

prudence.6. In order to have a trust, it is necessary for the trustee to have some

duties to perform. Trustee cannot be sole beneficiary.7. A trustee can be amateur (friend, family) or fee-paid institutional

(bank)c. Beneficiaries

1. Hold equitable interests;2. If there is only one beneficiary, he cannot also be trustee must have a

equitable duty; Beneficiary can also be trustee if there are multiplebeneficiaries.


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3. Special remedies: Have a personal claim against the trustee for breachof trust; personal creditors of the trustee cannot reach the trust property.

4. The creation of a trust involves the creation of one or more equitablefuture interests as well as a present interest in the income.

5. O transfers $100k to X in trust to pay the income to A for life and thento B for life. X has legal title and a fiduciary duty. A has an equitable lifeestate. B has an equitable remainder for life. Bs issue have an equitablecontingent remainder in fee simple. O has an equitable reversion.

4. What distinguishes a trust from everything below is the fiduciary duty!5. Distinguishing Precatory Trusts, Equitable Charges, and Debt

a. Testator may express a wish, hope, or recommendation that the propertydevised should be disposed of by the devisee in some particular manner.

1. If this language indicates merely a moral obligation unenforceable incourt, it is called precatory language. Not enforceable as a trust.

2. Precatory trusts are unenforceable dispositions of this sort.3. Do not put recitals in testamentary instruments or, if you must, be clear.

(I wish, but do not legally require, that C permit D to live on the land.)b. If the testator devises property to a person, subject to the payment of a certain

sum of money to a 3rd person, the testator creates an equitable charge, not a trust.1. An equitable charge creates a security interest in the transferred

property; there is no fiduciary relationship. The holder of the charge andthe beneficiary are more like debtor/creditor.

c. If the transferor intended only a moral obligation or is found to have created anequitable charge, then there is no trust and hence no fiduciary relationship.

6. Distinguished from Uncompleted Promises of Oral Giftsa. Hebrew Univ. v. Nye Scholar wanted to give books to university. The books

were not delivered/transferred over. He died, and heirs to estate argued the bookswere theirs. Argue it was a trust set up for the benefit of the university. At thatmoment, those books would have belonged to the university. A trust will not failfor want of a trustee.

b. Uncompleted gifts (wasnt delivered, papers were not done) argue that you setup a trust major advantage is that you do not have to transfer the property.

7. Trusts by Operation of Law Resulting and Constructive Trusts

a. A resulting trust is an equitable reversionary interest that arises by operation oflaw in two situations:

1. where an express trust fails or makes an incomplete disposition, or2. where one person pays the purchase price for property and causes title

to the property to be taken in the name of another person who is not anatural object of the bounty of the purchaser.

b. A resulting trust involves 3 people. May result from attempt to defraud creditors.Sometimes this is a proper arrangement between relatives.

c. O devises property to X in trust to pay the income to A for life and upon Asdeath to distribute the property to As descendants. A dies without descendants.The remainder to As descendants fails. X holds the remainder on resulting trustfor Os heirs or devisees.

d. Constructive trust : term that has nothing to do with consensual trust; this is a

legal remedy. It is an equitable remedy that is imposed on people by a court.Typically imposed when there is fraud.

1. Once we declare a constructive trust, the person who defrauded stillholds legal title, but holds it in equitable trust for the benefit of the correctbeneficiary.

B. Necessity of Trust Property1. 402: To have a trust, you must have intent, the 3 parties (however arranged), and

property.a. It must be a present property interest.b. The trust will not come into existence otherwise.


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2. Brainard v. Commissioner B orally stated that he declared a trust of his expected profitsfrom stocks to his wife and children. This declaration did not create a valid trust becauseat the time of his declaration, he had no property interest in profits from stock. Allprofits should be taxed to him, not the beneficiaries.

a. An invalid will will fall back into the estate, wherever the will designates(residual clause, etc.)

3.Speelman v. Pascal

Pascal wrote a letter promising to give profits from his upcomingplay; this was an enforceable right. He made an irrevocable transfer.

4. R of Trusts, 41: An expectation or hope of receiving property in the future, or aninterest that has not come into existence or has ceased to exist, cannot be held in trust.

5. Prevailing view is that a person can assign future earnings from an existing contract.C. Necessity of Trust Beneficiaries

1. There must be someone (a person) to whom the trustee owes fiduciary duties, someonewho can call the trustee to account.

2. The beneficiaries of a private trust may be unborn. However, there cannot be a validbequest to an indefinite person.

3. Clark v. Campbell A bequest for the benefit of the testators friends fails for the wantof certainty of the beneficiaries. Where a gift is impressed with a trust ineffectivelydeclared and incapable of taking effect because of the indefiniteness of the trust, thedonee will hold the property in trust for the next taker under the will, or for the next of

kin by way of a resulting trust.a. Anytime you get a general term like friends, there will be an indefinite

beneficiary. What about cousins, grandchildren?b. It must be definite enough to know who these people are.c. Compare with UTC 402c. It may be valid under UTC.

4. If the class of beneficiaries is so described that some person might reasonably be said toanswer the description, the power is valid.

5. In re Searights Estate A bequest for the care of a specific animal is known as anhonorary trust; one binding the conscience of the trustee, since there is no beneficiarycapable of enforcing the trust.

a. The bequest for the care of the dog is not unlawful.b. The $1000 provided a time limit that did not violate the rule against perpetuities.

Agreed that the dog had a value of $5 and caretaker was taxed on that.

c. Honorary trust: If the trustee wanted to do it, and no one complained, the trusteecan do it. Here, the heirs who otherwise would have gotten the moneycomplained

6. 2-907; 408: A trust for the care of a pet animal is valid for the life of the animal.D. Oral Trusts The Special Problems of Statute of Frauds

1. The Statute of Frauds requires any inter vivos trust of land to be in writing.2. The Statute of Wills requires any testamentary trust be created by a will.3. Oral Intervivos Trusts of Land

a. Where O conveys land to X upon an oral trust to pay the income to A for lifeand upon As death to convey the land to B, the SoF prevents enforcement of theexpress trust.

b. Is X permitted to keep the land? Most decisions permit X to retain the land.c. A constructive trust for the beneficiaries will be imposed where the transfer was

wrongfully obtained by fraud or duress, etc.d. Many cases involve children: The court will provide some remedy to the parents

the remedy is a constructive trust. You (kid) now hold this trust for yourparents.

4. Oral Trusts for Disposition at Deatha. Olliffe v. Wells T left residuary estate to Reverend to distribute at his

discretion. He said she told him she wanted it to go to charity. The will declares atrust too indefinite to be carried out, and the next of kin must take by way ofresulting trust.


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b. A trust not sufficiently declared on the face of the will cannot therefore be set upby extrinsic evidence to defeat the rights of the heirs at law or next of kin. Rev.had no beneficiary interest.

c. Secret Trust : The will does not reference or indicate a trust; The whole side dealis oral.

1. Remedy: we will go back and enforce the side deal, calling it fraud andcalling it a constructive trust; we are not enforcing this side deal outright.Impose/enforce a constructive trust.

d. Semi-secret Trust : Will indicates that a person is to hold the legacy in trust butdoes not identify the beneficiary; You know there is a side deal, you just dontknow what it is or what the exact terms are.

1. Remedy: Fails. This creates a resulting trust and all the property will goback to the estate (probably residuary clause).

E. Revocable Trusts and the Related Concept of Durable Power of Attorney1. Revocable Trusts

a. A revocable inter vivos trust is the most flexible of all will substitutes becausethe donor can draft both the dispositive and the administrative provisionsprecisely to the donors liking.

1. The creator of the trust transfers legal title to property to another personas trustee pursuant to a writing in which the settlor retains the power to

revoke, alter, or amend the trust and the right to trust income duringlifetime.

2. On his death, the trust assets are distributed or held in further trust forother beneficiaries.

b. Farkas v. Williams Even though the settlor retains the power to revoke thetrust and appoints himself as trustee, if the beneficiary obtains any interest in thetrust before the settlor dies, a valid inter vivos trust may have been formed.

1. this is my property, and while Im alive I can do anything I want withit. Upon my death, I will give it to you, but I can change it or do whateverI want while Im alive. While Im alive, I have complete control over it.

2. This sounds like a will. Thats ok.3. The court had to justify this to get around the Statute of Wills: They

said that the beneficiary had a present interest. (With wills, there is no

present interest by the beneficiary) This whole case depends on thispresent interest given to the beneficiary. B

c. If the trustee is the sole beneficiary, there is no trust,

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