Wills & Trusts

California Wills & Trusts flashcards based on Essay Exam Writing for the California Bar Exam

Attested Will Formalities

To execute a valid attested will in California, the following elements must be satisfied:

1) The will must be in writing;

2) The will must be signed by the testator (or by someone in the testator's presence and at their direction); and

3) The signing or acknowledgment of the signature/will must be witnessed by at least two attesting witnesses who are present at the same time, understand that the document is the testator's will, and sign the will during the testator's lifetime.

Interested Witness Rule

Under California law:

- A witness who is also a beneficiary under the will is an interested witness;

- An interested witness creates a rebuttable presumption that the gift was procured by duress, undue influence, menace, or fraud (DUMF);

- If the interested witness fails to rebut the presumption, the gift fails to the extent it exceeds their intestate share; and

- The presumption does not arise if there are at least two other disinterested witnesses or if the gift is made solely in a fiduciary capacity.

Holographic Will

A holographic will is valid without formal attestation if:

1) The material provisions of the will are in the testator's handwriting and

2) The document is signed by the testator;

If an undated holographic will conflicts with another will, it is invalid to the extent of any inconsistency unless its time of execution can be established.

Testamentary Capacity

Testamentary capacity requires that at the time of execution, the testator:

1) Is at least 18 years of age;

2) Understands the nature and situation of their property;

3) Understands the nature of the testamentary act; and

4) Remembers and understands their relations to living descendants, spouse, and affected family members.

Insane Delusion / Mental Disorder

A testator lacks testamentary capacity due to a mental disorder if, at the time of execution:

1) The testator suffers from hallucinations or delusions; and

2) The delusion caused the testator to devise property in a manner

3) Which they would not have otherwise done but for the disorder.

Fraud in the Execution

Fraud in the execution occurs when:

1) A wrongdoer misrepresents the nature or identity of the document being signed;

2) The testator relies on the misrepresentation; and

3) they sign the document without knowing it is a will.

The result is that the entire instrument is invalid.

Fraud in the Inducement

Fraud in the inducement occurs when:

1) A wrongdoer knowingly makes a misrepresentation of material fact;

2) Made with the intent to deceive the testator;

3) Which induces the testator to make a disposition they would not otherwise have made; resulting in

4) Invalidation of only those provisions procured by the fraud.

Common Law Undue Influence

To establish common law undue influence, the contestant must prove:

1) Susceptibility: the testator was vulnerable to influence;

2) Opportunity: the influencer had access and opportunity to influence;

3) Unnatural disposition: the resulting provisions are unnatural; and

4) Procurement: the beneficiary actively participated in procuring the disposition.

California Statutory Undue Influence

Under California statutory law, undue influence is

excessive persuasion that

causes another person to act or refrain from acting

by overcoming their free will,

resulting in an inequity.

Courts consider four factors (VIAE):

1) Vulnerability of the victim;

2) Influencer's authority;

3) Actions/tactics used by the influencer; and

4) Equity of the result.

CA Presumption of Undue Influence (Statutory Donative Transfers)

In California, a presumption of fraud or undue influence arises when a donative transfer is made to:

1) The drafter of the instrument;

2) A fiduciary who transcribed or caused the instrument to be transcribed;

3) A care custodian of a dependent adult within 90 days of providing care; or

4) A cohabitant or employee of any of the above.

Exceptions apply for blood relatives, gifts of $5,000 or less, or independent attorney review.

Choice of Law for Will Validity

A written will is validly executed in California if its execution complies with the law of:

1) California;

2) The state or place where the will was executed; or

3) The state where the testator was domiciled at the time of execution or death.

Integration

Under the doctrine of integration, papers are part of a single will if:

1) They were physically present at the time of execution; and

2) The testator intended them to be part of the will.

This may be shown by:

1) physical connection,

2) continuous sequence of thought, or

3) extrinsic evidence.

Incorporation by Reference

A separate writing outside a will is incorporated by reference if:

1) The writing was in existence at the time the will was executed;

2) The will expresses clear intent to incorporate the writing; and

3) The writing is sufficiently described in the will so it can be identified.

California Tangible Personal Property Exception

A writing disposing of tangible personal property not otherwise incorporated by reference is admitted into probate if:

1) It is referred to in a valid will;

2) It is dated and in the testator's handwriting / signed by the testator;

3) It describes the items and beneficiaries with reasonable certainty; and

4) Individual items do not exceed $5,000 and the aggregate value does not exceed $25,000.

Acts of Independent Legal Significance

A will may identify property/beneficiaries by reference to acts or events that have a primary non-testamentary motive or purpose.

Codicil and Republication

A codicil is an addition or amendment to an existing will executed with the same formalities as a valid attested or holographic will.

A valid codicil republishes the original will as of the date the codicil is executed, which can cure defects such as interested witness issues from the original execution.

Pour-Over Will

A pour-over will devises probate assets to an existing trust. It is valid if:

1) The trust is identified in the will;

2) The trust terms are set forth in a written instrument other than the will; and

3) The trust was executed before or concurrently with the execution of the will. (CA allows 60 days after)

Revocation by Physical Act

A will or codicil is revoked by physical act if:

1) The testator (or a third party in the testator's presence and at their direction) performs a physical act of destruction (burning, tearing, canceling (defacing of material text required), obliterating, or crossing out); and

2) The act is accompanied by a simultaneous intent to revoke.

Revocation by Subsequent Instrument

A prior will or codicil is revoked by a subsequent instrument through:

1) Express revocation: explicitly revoking prior wills; or

2) Implied revocation: inconsistencies between the instruments, where the subsequent will revokes the prior terms to the extent of the conflict.

Omitted Spouse or Domestic Partner

A spouse or domestic partner married after execution of all testamentary instruments receives an intestate share of the estate unless:

1) The omission was intentional as shown on the face of the instrument;

2) The decedent provided for the spouse outside the will with intent that it be in lieu of the will; or

3) The spouse executed a valid waiver.

Omitted Child

A child born or adopted after execution of all testamentary instruments (or omitted solely because the testator mistakenly believed the child was dead or unaware of their birth) receives an intestate share unless:

1) The omission was intentional on the face of the instrument;

2) The decedent provided for the child outside the will in lieu of the will; or

3) The testator devised substantially all of the estate to the other parent of the omitted child.

Dependent Relative Revocation (DRR)

DRR cancels a past revocation if:

1) The testator revoked a prior will under the mistaken belief that a new disposition or will was valid;

2) But the second disposition failed or was invalid; and

3) The testator would not have revoked the first will but for the mistake.

The court will disregard the revocation and probate the original will.

Revival of Revoked Will

If a 2nd will revoked 1st will, but is subsequently revoked by physical act, the 1st will is revived only if the testator intended to revive the 1st will.

If the revocation was by physical act, extrinsic evidence of intent is admissible.

Classification of Testamentary Gifts

Testamentary gifts are classified into four categories:

1) Specific Gift: Devise of specific, identifiable property (e.g., "my 2018 Cadillac");

2) General Gift: Gift paid out of the general assets of the estate (e.g., "$10,000");

3) Demonstrative Gift: General pecuniary gift specified to be paid from a particular source or fund; and

4) Residuary Gift: Remainder of the estate after all debts, expenses, and gifts are satisfied.

Ademption by Extinction

Ademption by extinction applies when specifically devised property is no longer part of the testator's estate at death.

Under California law, courts look to the testator's intent; if the testator did not intend the gift to fail, the beneficiary may receive replacement property or the monetary value/proceeds.

Ademption by Satisfaction

An inter vivos lifetime gift satisfies a testamentary gift in whole or in part only if:

1) The will provides for deduction of the lifetime gift;

2) The testator declares in a contemporaneous writing that the gift satisfies the devise; or

3) The beneficiary acknowledges in writing that the gift satisfies the devise.

Abatement Order

When estate assets are insufficient to satisfy all debts and legacies, gifts abate in the following order:

1) Property not disposed of by will (intestate property);

2) Residuary gifts;

3) General gifts to non-relatives;

4) General gifts to relatives;

5) Specific gifts to non-relatives; and

6) Specific gifts to relatives.

California Anti-Lapse Statute

If a beneficiary predeceases the testator, the gift lapses into the residue unless saved by anti-lapse. California's anti-lapse statute applies if:

1) The predeceased beneficiary was kindred (blood relative) to the testator or kindred of a spouse/partner; and

2) Left surviving issue. The surviving issue take per capita with representation.

Simultaneous Death Rule

If a testator and beneficiary die under circumstances where it cannot be established by clear and convincing evidence that the beneficiary survived the testator, the beneficiary is deemed to have predeceased the testator, causing the gift to lapse (or pass under anti-lapse).

Widow's Election

A surviving spouse may elect between

1) taking under the decedent spouse's will or

2) claiming their statutory share (1/2 of CP/QCP) if the decedent spouse attempted to dispose of more than their 1/2 share of CP/QCP in the will.

No-Contest Clause

A no-contest clause penalizes a beneficiary who makes a direct contest against a will/trust without probable cause (based on grounds such as forgery, lack of execution, lack of capacity, fraud, duress, or undue influence).

Slayer Statute

A beneficiary who intentionally and feloniously kills the decedent is barred from taking any property or benefit from the decedent's estate or trust.

The killer is treated as having predeceased the decedent, and anti-lapse does not apply to pass the gift to the killer's issue.

Intestate Succession - Community Property

If a decedent dies intestate leaving a surviving spouse or domestic partner, the surviving spouse/partner receives 100% of the decedent's share of CP and QCP.

Intestate Succession - Separate Property

If a decedent dies intestate leaving SP, the surviving spouse receives:

1) 100% of SP if decedent leaves no surviving issue, parent, sibling, or issue of sibling;

2) 1/2 of SP if decedent leaves one child or issue of a deceased child, or parents/their issue; or

3) 1/3 of SP if decedent leaves more than one surviving child, or one child and issue of a deceased child.

Intestate Succession Order (No Spouse)

If decedent dies without a surviving spouse, the estate passes in the following order:

1) Issue;

2) Parents;

3) Issue of parents (siblings);

4) Grandparents;

5) Issue of grandparents (aunts/uncles);

6) Issue of a predeceased spouse (step children);

7) Next of kin (cousin);

8) Parents of predeceased spouse (mother/father in law);

9) Escheat to the State of California.

120-Hour Survival Rule

For intestate succession, an heir must survive the decedent by 120 hours (5 days) established by clear and convincing evidence.

If the heir does not survive by 120 hours, they are deemed to have predeceased the decedent unless application of the rule would result in escheat to the state.

Per Capita with Representation (Probate Code § 240)

Per capita with representation:

1) Distribution begins at the first generational level with living takers;

2) Each living member at that level receives one share; and

3) The share of each deceased member with living issue is divided equally among their surviving issue.

Strict Per Stirpes (Probate Code § 246)

Under strict per stirpes:

1) Shares are divided at the first generational level below the decedent, regardless of whether anyone is alive at that level; and

2) The issue of deceased individuals at that level take their deceased parent's share by representation.

Stepchildren & Foster Children Intestate Succession

A stepchild or foster child inherits from a step/foster parent through intestate succession only if:

1) The relationship began during the child's minority;

2) The relationship continued throughout the joint lifetimes of the child and parent; and

3) It is established by clear and convincing evidence that a legal barrier prevented adoption.

Contract to Make or Revoke a Will

Under California law, a contract to make a will, not revoke a will, or die intestate is enforceable only if established by:

1) Provisions in the will stating material terms of the contract;

2) Express reference in the will to a contract and extrinsic evidence proving its terms;

3) A signed writing by the decedent evidencing the contract; or

4) Clear and convincing evidence enforceable in equity.

Joint/mutual wills do not presume a contract.

Valid Express Trust Elements

To create a valid express trust, five elements must be satisfied:

1) Settlor Intent: Manifestation of present intent to create a trust (precatory language like "I wish" is insufficient);

2) Trust Property (Res): Identifiable, existing property;

3) Trust Purpose: Any lawful purpose not contrary to public policy;

4) Ascertainable Beneficiaries: Identifiable beneficiaries (unless charitable); and

5) Trustee: Named or appointed by court (trust doesn’t fail for lack of trustee).

Secret Trust

A secret trust occurs when a will devises property to an individual outright on its face without mentioning a trust, but based on an oral agreement that the devisee holds the property for another.

Extrinsic evidence is admissible, and courts enforce the secret trust by imposing a constructive trust on the devisee to prevent unjust enrichment.

Semi-Secret Trust

A semi-secret trust occurs when a will makes a gift to a person "in trust" but fails to name the beneficiary or state the terms of the trust.

Under the majority rule (including CA law), extrinsic evidence is inadmissible, the trust fails for lack of a beneficiary, and a resulting trust reverts the property back to the settlor's estate.

Spendthrift Trust

A spendthrift trust explicitly restricts the beneficiary's ability to voluntarily / involuntarily

transfer / alienate their trust interest. Creditors cannot attach trust assets until distributed, except for claims involving:

1) Child support or alimony;

2) Necessaries of life provided to the beneficiary; or

3) Government claims (e.g., taxes).

Support Trust

A support trust directs the trustee to pay only so much income or principal as is necessary for the beneficiary's health, education, maintenance, and support (HEMS).

The beneficiary's interest is non-assignable, and general creditors cannot reach the trust except for providers of necessaries.

Discretionary Trust

A discretionary trust grants the trustee absolute discretion to pay or withhold income or principal distributions to the beneficiary.

Beneficiaries have no right to compel payment, and

creditors cannot force distributions

unless the trustee exercises discretion to make a payment.

Charitable Trust and Cy Pres Doctrine

A charitable trust must have a purpose that benefits society at large.

If the specific charitable purpose becomes impossible, impracticable, or illegal, courts apply the cy pres doctrine to substitute a similar charitable purpose that aligns with the settlor's general charitable intent.

Resulting Trust

A resulting trust is an implied-in-fact equitable remedy that returns trust property to the settlor or settlor's estate when (EPCCP):

1) An express trust fails;

2) Trust purpose ends

3) Corpus remains;

4) A charitable trust fails and cy pres does not apply; or

5) A purchase money resulting trust occurs.

Constructive Trust

A constructive trust is an equitable remedy imposed by the court to prevent unjust enrichment resulting from:

1) Fraud, duress, or undue influence;

2) Breach of fiduciary duty;

3) Secret trusts; or

4) Breach of a contract relating to a will.

Duty of Loyalty & No Self-Dealing

A trustee owes a duty of loyalty to act solely in the best interest of the beneficiaries, avoid conflicts of interest, & avoid self-dealing.

Under the "no-further-inquiry" rule, any self-dealing transaction entered into by the trustee (e.g., buying trust assets, selling personal property to the trust) is per se voidable by beneficiaries without proof of bad faith or loss.

Duty of Care & Prudent Investor Rule (UPIA)

Under the Uniform Prudent Investor Act (UPIA), a trustee must exercise reasonable care, skill, and caution when managing trust assets.

Investments are evaluated based on the performance of the portfolio as a whole and as part of an overall investment strategy, requiring the trustee to:

1) Investigate investments; and

2) Diversify trust assets.

Trustee Duty to Segregate and Earmark

A trustee has a strict duty to:

1) Segregate trust property from personal property and not commingle funds; and

2) Properly earmark trust property by titling assets in the name of the trust.

Allocation of Principal and Income

Unless the trust instrument provides otherwise:

1) Income Beneficiaries receive ordinary income (interest, cash dividends, net rents) and pay routine expenses (taxes, minor repairs, loan interest); and

2) Remaindermen receive principal (capital gains, stock splits, stock dividends, proceeds from asset sales) and pay major repairs and loan principal.

Trust Modification and Revocation (California Rule)

Under the majority rule, a trust is irrevocable and modifiable unless power to revoke/modify is expressly reserved.

In California (minority rule), a trust is revocable by the settlor unless the trust instrument expressly declares it to be irrevocable.

Claflin Doctrine - Beneficiary Power to Modify / Terminate Trust

Beneficiaries can compel modification or termination of an irrevocable trust early, prior to its natural end if:

1) All beneficiaries are competent and consent; and

2) Termination will not frustrate a material purpose of the trust.