Common Law Trusts and Estates

The Twelve Tables made intestacy a mandatory system of inheritance rather than a default system.

False.

False. The Twelve Tables is notable for (among other things) granting testamentary freedom to Roman citizens.

At common law, the Church historically had jurisdiction over the inheritance of ____.

Personal Property.

The Church had jurisdiction over the inheritance of personal property and applied Roman law principles. Real property was governed by secular law and historically ruled by primogeniture.

Most early American jurisdictions continued the practice of primogeniture.

False.

Early Americans rejected primogeniture for various reasons. In particular, it had been critical to establishing and maintaining a landed aristocracy and royalty in England--a practice early Americans sought to break with.

A common law state has a body of statutes titled "Of Descent and Distribution." What laws are likely contained in that body of statutes?

Laws governing intestacy.

Jurisdiction over a probate proceeding is usually determined by ________.

The descendent's domicile at death.

The decedent's domicile usually determines where his estate proceeding should be opened. See e.g. Tex. Estates Code §33.001; Col. Rev. Stat. §15-12-201 (UPC state)

D died this year. Which of the following items of property is/are his "non-probate" property?

(i) Immovable (real) property held by D and his sibling as "Joint Tenants with Right of Survivorship"

(ii) Immovable (real) property held by D and his sibling as "Tenants in Common"

(iii) Immovable (real) property held by D and his spouse as "Tenants by the Entirety"

(i) & (iii).

JTROS and TBE property are both non-probate forms of title recognized by states other than Louisiana. TIC property, however, is akin to Louisiana co-ownership and does not usually result in a non-probate transfer.

D died this year. Which of the following items of property are D's non-probate property?

(i) Proceeds of D's life insurance policy that designates X as beneficiary.

(ii) Proceeds of D's 401k retirement plan that designates X as beneficiary. A 401k plan is a plan that is governed by a set of federal laws called ERISA.

(iii) A U.S. Savings bond titled D, Pay on Death, X.

All of the above.

Life insurance is non-probate, usually due to special legislation, jurisprudence, or both. Proceeds of 401k retirement plans and U.S. Savings Bonds are both subject to federal preemption. The federal law recognizes the non-probate transfer of such property.

Which part of the U.S. Constitution affords a Constitutional right to refuse medical treatment?

The Fourteenth Amendment. Patients have a constitutionally protected liberty interest in refusing medical treatment afforded by the Due Process Clause of the Fourteenth Amendment. This right has been recognized by Cruzan v. Director and a host of other cases.

Federal law sets forth the form requirements for advance planning documents in the medical context.

False. 42 U.S.C. §1395cc is a federal law that requires all Medicare providers to provide information to patients about their rights, including the right to accept or refuse treatment, right to execute a living will, and the right to execute a medical power of attorney. However, the form requirements for these documents are generally determined by applicable state law.

A document, usually prepared by an attorney, that appoints a surrogate decision maker in the event a patient is unable to consent to or refuse treatment on the patient's own behalf is called a ____________.

Medical Power of Attorney. The terminology used in the advanced planning setting can be confusing and inconsistent. Generally, the documents that might be prepared by or with the assistance of an attorney include:

Advance Directive (or Advanced Directive): Sets forth client's desires with respect to end-of-life treatment and other treatment options.

Power of Attorney: Also called a power of attorney for healthcare, durable power of attorney (for healthcare), or healthcare proxy. This appoints a surrogate decision maker for the client.

Living Will: Often refers to a statutory form where the client consents to the termination of end of life treatment. It is like an advance directive addressing a limited issue.

Documents prepared by medical professionals include:

DNR (Do Not Resuscitate Order): An order written by the attending physician directing the patient not be resuscitated if the patient's heart and/or lungs stop functioning.

Out of Hospital DNR: Many states now allow EMS personnel to honor a DNR outside of the hospital setting. Still best not to call EMS if the death is anticipated and resuscitation not desired.

POLST (Physician's Order for Life-Sustaining Treatment): Medical form summarizing advance directive information and other matters. It essentially turns the Advance Directive in to a doctor's order.

A "durable" power of attorney survives the incapacity of the principal.

True. Default laws vary by state. In some states a power of attorney is presumed to be durable, in other states it is not presumed to be durable. Durable "general" or "financial" powers of attorney are common estate planning documents.

A "springing" power of attorney is effective immediately upon execution.

False. A springing power of attorney does not become effective until the occurrence of some specified event, such as the incapacity of the principal. Estate planners vary on whether they recommend springing powers or immediate durable powers for financial planning.

According to Model Rule 1.14, when a client has diminished capacity, a lawyer should:

Maintain a normal client-lawyer relationship as far as reasonably possible.

When dealing with clients with diminished capacity, estate planning attorneys should:

Assist the client in making informed decisions. The attorney should not, however, substitute the attorney's own judgement for that of the client. For more information, check out this ACTEC Podcast and MRPC 1.14.

The estate planning attorney has a duty to understand and recognize the signs of diminishing or diminished capacity in clients.

True. MRPC 1.1 imposes a duty of competence on attorneys. In the estate planning context, the duty of competence includes a duty to understand when a client might have challenges with capacity.

Attorney meets with Client for estate planning and discovers that Client has advanced dementia and cannot make reasoned decisions. Attorney should proceed to prepare estate planning documents for Client.

False. MRPC 1.14 sets forth the ethical obligations of attorneys when dealing with clients with diminished capacity. The ACTEC commentaries to Rule 1.14 offer additional guidance. An attorney can assist a client in preparing estate planning documents in cases of borderline capacity. However, a client with advanced dementia usually lacks capacity and the attorney should not prepare new documents for the client.

An attorney may, ethically, represent both spouses jointly in their estate planning.

True. Joint representation of spouses in estate planning matters is permitted under the Model Rules. See the ACTEC commentaries to Rule 1.7. Of course, joint representation is not ideal or even permitted in all cases. Marital discord and other factors may prohibit a joint representation.

Attorney prepared a will for Client's property to Client's child, A, and cutting out Client's other child, B. Due to Attorney's negligence in drafting and overseeing the will, the will is deemed invalid. Child A has a valid malpractice claim against Attorney.

True. A malpractice claim usually requires proof of three elements. Per the Restatement, Child A must show: 1. Duty of care to person alleging harm; 2. Failure to exercise care; 3. Failure to exercise care caused the injury. Most jurisdictions have rejected the privity of contract defense in the circumstances described in this hypo and will impose a duty of care to Child A, the intended beneficiary, under these facts.

Which of the following elements must a plaintiff prove in a malpractice claim against an estate planning attorney?

The usual elements of a malpractice claim are 1. Duty of care to person alleging harm; 2. Failure to exercise care; 3. Failure to exercise care caused the injury. You can read the Restatement for more background.

Intestacy statutes are sometimes called ________.

Law of descent and distribution.

D died intestate domiciled in State 1. He owned movable (personal) property physically located in State 2 at the time of his death. All potential heirs to the movable (personal) property were domiciled in State 3 at the time of D's death. Which state's laws govern the inheritance of the movable (personal) property?

State 1. Generally, the decedent's domicile determines the inheritance of his movable (personal) property. Restatement (Second) of Conflict of Laws §222 sets forth some general principles related to conflict of laws and property. §260 Intestate Succession to Movables provides more detailed rules for movables.

D died intestate domiciled in State 1. He owned immovable (real) property physically located in State 2 at the time of his death. All potential heirs to the immovable (real) property were domiciled in State 3 at the time of D's death. Which state's laws govern the inheritance of the immovable (real) property?

State 2. Generally, the inheritance of immovable (real) property is governed by the law of the state in which the property is physically located because that state will have the most compelling interest in determining the rights to immovables located within its borders. See §260 Intestate Succession to Movables for a more thorough explanation.

In community property jurisdictions, the surviving spouse in intestacy usually has ____ rights to the community property than to the separate property.

Superior. For example, compare Tex. Estates Code §201.002 to §201.003. Also compare the treatment of the surviving spouse to community and separate property in New Mexico Statute §45-2-102. If you have already taken Louisiana Successions, recall Louisiana's treatment of the surviving spouse and notice that the surviving spouse fairs poorly in Louisiana compared to these other community property jurisdictions.

D died intestate survived by children B and C. He was also survived by V, the child of his predeceased son A. How should D's estate be distributed?

1/3 to V, 1/3 to B, 1/3 to C. In every state the answer to this question is the same. D's estate is divided among his children, per capita. V is entitled to inherit A's share by representation. Notice that it is irrelevant whether B or C has children. Because B and C are alive and are related to D more closely than their own children, they will inherit to the exclusion of their own children.

D died intestate survived by his brother, B; his mother, M; and his grandchild, G. G is the child of D's predeceased child, C. How should D's estate be distributed?

All to G. The answer to this question is the same in every state. The class of descendants is preferred to all other relatives (with the exception of the surviving spouse). G is D's only descendant and he will inherit the entirety of D's estate to the exclusion of all of D's other relatives.

D died intestate survived by his children A and B. D was also survived by his great grandchildren Q, R, S, X and Y. All of these great grandchildren are the descendants of D's predeceased child, C. Q, R and S are descendants of C's child L. X and Y are descendants of C's child, M.

How should D's estate be distributed in a strict (English) per stirpes jurisdiction?

1/3 to A; 1/3 to B; 1/6 to Q, R, and S; 1/6 to X and Y.

In a strict per stirpes system, divisions are made at each generation. The estate would first be divided into thirds at the first generation (A, B, and C). A and B would each inherit their 1/3 interests in their own rights. C's 1/3 interest would be divided in half at the next generation because C had two predeceased children with surviving descendants--L and M. L's 1/6 interest (1/2 of 1/3) would be distributed equally to his children. M's 1/6 interest would be divided equally to his children.

D died intestate survived by his children A and B. D was also survived by his great grandchildren Q, R, S, X and Y. All of these great grandchildren are the descendants of D's predeceased child, C. Q, R and S are descendants of C's child L. X and Y are descendants of C's child, M.

How should D's estate be distributed in a modern per stirpes (per capita with representation) system?

1/3 to A; 1/3 to B; 1/6 to Q, R, and S; 1/6 to X and Y.

Under these facts, the outcome is the same in the modern per stirpes system as it is under a strict per stirpes system. The modern per stirpes system instructs you to make the first division of D's estate in the first generation where there are takers. Thereafter, a traditional per-stirpes system is used. Because D has takers in the first generation of descendants (his children A and B), the allocation will be exactly the same as under the strict English per stirpes system.

D died intestate survived by his children A and B. D was also survived by his great grandchildren Q, R, S, X and Y. All of these great grandchildren are the descendants of D's predeceased child, C. Q, R and S are descendants of C's child L. X and Y are descendants of C's child, M.

How should D's estate be distributed in 1990 UPC/Per Capita at Each Generation System?

1/3 to A; 1/3 to B; 1/3 divided equally among Q, R, S, X and Y.

This system directs you to make the first division in the first generation in which there is a surviving taker. Here, the first division is made among D's children: 1/3 each to A, B, and C. Because C predeceased D, his descendants will inherit by representation. The 1990 UPC/Per Capita at Each Generation system then reallocates the 1/3 that C would have inherited equally among Q, R, S, X, and Y.

The Restatement gives additional illustrations of each system. Notice that this outcome would be different if L or M had survived D. The outcome would be similar to that discussed in the previous example.

The strict (English) per stirpes system of inheritance favors ____ equity.

Vertical.

In maintaining divisions among each line of descent, the system favors vertical equity. In contrast, the 1990 UPC/Per Capita at Each Generation system favors horizonal equity by maintaining equality among each generation of heirs. For that reason it is sometimes described as "equally near, equally dear."

In most states, siblings and half-siblings are treated differently in intestacy.

False.

A majority of states make no distinction between full blooded and half blooded siblings. The UPC also treats them the same. A minority of states, however, treat them differently. This is sometimes called the "Scottish Rule" and likely derives from Civil Law.

In most states, the adopted child may inherit in intestacy from both his biological family and his adoptive family.

False.

In most states adoption severs all rights--including inheritance rights--between the adopted child and his biological family. The adopted person is treated for all purposes as those he is the biological child of his adoptive parent(s).

However, a handful of jurisdictions--including Louisiana--follow the traditional civilian approach that places the adopted person in a position of privilege and permits him to inherit from both his biological family and his adoptive family.

Consider how that distinction may be relevant in an issue with multistate contacts in light of the conflict rules we discussed earlier.

D died testate survived by his children A, B, and C. D was also survived by C's children X and Y. C renounces/disclaims his interest in D's estate. How should D's estate be distributed?

1/3 to A; 1/3 to B; 1/3 to X and Y.

Generally, when an heir disclaims his interest in an estate he is treated as though he predeceased the decedent. Here, if C predeceased but was survived by his own children, then his children would inherit by representation.

D died intestate survived by his children A, B, and C. D was also survived by C's children X and Y. The court with jurisdiction over the probate proceeding determines that C was responsible for the felonious and intentional killing of D. How should D's estate be distributed?

1/3 to A; 1/3 to B; 1/3 to X and Y.

This question involves the slayer rule. Generally, the slayer is precluded from inheriting and is treated as though he predeceased the decedent. His crimes are not generally imputed to his own heirs. In most (but not all) states the slayer rule is a matter of statute.

In most states, a testator must be at least __ years old to have the legal capacity to execute a will.

18. In most states the testator must have attained the age of legal majority--18. See Restatement §8.2. Some states--like Louisiana--take a more nuanced approach and set the age younger.

T began showing signs of declining mental capacity in Year 1. In Year 2, T executed a last will and testament. In Year 3, T was adjudicated incompetent by a court. In Year 4, T died and his will was offered for probate. The proponents of the will have established that it was duly executed in conformity with the applicable state law. Some of T's intestate heirs not named in the will have challenged the will on the basis that T lacked testamentary capacity. Which of the following is correct?

T is presumed to have possessed capacity when he executed the will. The presumption may be rebutted.

The relevant date for determining capacity is the date that T executed the will--in Year 2. (See Will Contests §6:13). Generally, testators are presumed to possess the requisite mental capacity to execute a will. That presumption is, of course, rebuttable. The fact of the later declaration of incompetence by the court might be compelling evidence that the testator lacked capacity. In most jurisdictions, however, a declaration of incompetence does not automatically negate testamentary capacity.

Even in jurisdictions where a court declaration of incompetence raises a negative presumption relating to capacity, timing is important here. The court declaration would usually only have prospective effect--it would only affect testamentary actions after the commencement of the court proceeding and/or the declaration of incompetence. It would not usually affect testamentary actions that took place prior to the court proceeding. See Will Contests §6:14, Footnote 7

A finding of lack of capacity will usually invalidate the entire will.

True. This stands in contrast to other types of challenges based on undue influence or insane delusions. Those types of challenges could, in theory, invalidate just the portion of the will that was affected by the influence or the delusion.

T has been diagnosed as being in the early stages of Alzheimer's dementia. T is still functioning independently. However, consistent with the typical progression of Alzheimer's dementia, T has some trouble with short term memory. T sometimes has to read things several times to understand them. T has trouble remembering names when introduced to new people. And, T often has trouble coming up with the right word or name. T generally knows the extent of his assets and is consistent in his explanation of who he wants to inherit his property. T has asked his attorney to draft a will. Which of the following is correct?

T has testamentary capacity. T's attorney should prepare a new will for him.

Capacity can run a spectrum and the fact that T has diminished capacity does not mean that he lacks testamentary capacity. Remember, the bar for testamentary capacity is quite low. As is explained in Will Contests §6:8, people in the early stages of Alzheimer's dementia often have the requisite testamentary capacity. Beyond that, capacity is more doubtful. MRPC Rule 1.14 sets forth the general ethical requirements for an attorney whose client suffers from diminished capacity. The ACTEC Commentary to that rule offers additional helpful guidance. The attorney should assist his client in preparing a will and should take additional steps to document T's capacity.

T signed his will while two witnesses observed him signing. When the witnesses observe T signing his will they ____.

Attest. Attest and Subscribe have different legal meanings. Per Swift v. Wiley: "To attest the publication of a paper as a last will, and to subscribe to that paper the names of the witnesses, are very different things, and are required for obviously distinct and different ends. Attestation is the act of the senses, subscription is the act of the hand; the one is mental, the other mechanical, and to attest a will is to know that it was published as such, and to certify the facts required to constitute an actual and legal publication: but to subscribe a paper published as a will, is only to write on the same paper the names of the witnesses, for the sole purpose of identification."

Rank the form requirements for an attested will from most onerous to least onerous.

English Statute of Frauds of 1677

English Wills Act of 1837

Uniform Probate Code

2, 1, 3. Most to Least: English Wills Act of 1837, English Statute of Frauds of 1677, Uniform Probate Code. For more explanation see the overview in your text and in the Restatement (Comment f).

T executes an attested will. The signatures of T's witnesses are preceded by an attestation clause reflecting the basic requirements for due execution of an attested will. T's will is presumed to be duly executed. The presumption is rebuttable.

True. The attestation clause establishes a rebuttable presumption of due execution. Read more here. To further strengthen the will, T could have made the will self-proving.

Who should sign the attested will first?

The testator should sign first in all states. See e.g. Restatement §3.1, Comment (m).

How many witnesses are required for an attested will in most states?

2. See e.g. Restatement §3.1, Comment (o).

T signed her will while lying in her hospital bed. Both witnesses saw T sign. Because the hospital room was small, the witnesses took the will out of the room and to a nearby nurses' station to sign as witnesses. T knew the witnesses were signing, but could not have possibly seen them sign from T's position in the hospital bed.

Applicable state law requires T's witnesses to sign in T's presence. The state law uses a line-of-sight test to determine presence. Is T's will in proper form?

No. The line of sign test requires the testator to actually be able to see the witnesses sign the document. For example, in in Chester v. Smith, 677 S.E. 2d 128 (Ga. 2009) the Georgia Supreme Court explained the rule this way: "from the place where the testatrix is situated (such as sitting in a chair or lying in a bed) when the witnesses sign the will, she must be able to see the witnesses sign the will if she desired to do so without changing her place. This test is referred to as the "line-of-vision" test, and under this test, it is not necessary for the testator to have watched the witnesses sign, as long as the testator could have watched them sign."

T signed her will while lying in her hospital bed. Both witnesses saw T sign. Because the hospital room was small, the witnesses took the will out of the room and to a nearby nurses' station to sign as witnesses. T knew the witnesses were signing, but could not have possibly seen them sign from T's position in the hospital bed.

Applicable state law requires T's witnesses to sign in T's presence. The state law uses a conscious presence test to determine presence. Is T's will in proper form?

Yes

T executed an attested will before his death. T was single when he died. T was survived by his brother (B), and by T's three children (Q, R, and S). T's will divided his estate equally among B, Q, R, and S.

Applicable state law has a typical purging statute applicable to interested witnesses.

Q served as a witness to T's will. What, if anything, is Q entitled to inherit from T?

1/4 of T's estate.

A typical purging statute purges the excess benefit meaning the witness is entitled to the lesser of the gift under the will or under intestacy.

Under these facts Q would receive 1/3 in intestacy. If T had died intestate survived by a sibling and 3 children, then T's children would inherit to the exclusion of T's sibling. T's estate would then be divided equally among the children: 1/3 each.

The share Q received in the will (1/4) is less than what Q would have received in intestacy. Therefore, Q can inherit under the terms of the will.

The implicit assumption here is that Q must not have done anything to unduly influence T. If Q had done something untoward, surely he would have convinced T to leave him MORE property than Q was entitled to receive in intestacy!

T executed an attested will before his death. T was single when he died. T was survived by his brother (B), and by T's three children (Q, R, and S). T's will divided his estate equally among B, Q, R, and S.

Applicable state law has a typical purging statute applicable to interested witnesses.

B served as a witness to T's will. What, if anything, is B entitled to inherit from T?

Nothing. A typical purging statute purges the excess benefit meaning the witness is entitled to the lesser of the gift under the will or under intestacy. Under these facts B would get nothing in intestacy.

If T died intestate survived by children and a brother, then T's estate would be inherited by his children to the exclusion of his brother.

Nothing is less than ¼. Therefore, B will inherit nothing.

You may wonder who would inherit B's interest if B cannot inherit it. We will cover this in later in the course. The short story is that B will be treated as though he predeceased T and, under these facts, his interest would likely accrete to the other beneficiaries: Q, R, and S. So, Q, R, and S will each inherit 1/3. The same amount they would have inherited in intestacy.

Rank these interpretive doctrines from most strict to most lenient.

1. Substantial compliance

2. Harmless error

3. Strict compliance

3, 1, 2.

About ___of the states in the United States permit testators to execute olographic (or holographic) wills.

1/2

The Restatement explains that a typical "first generation" holographic will statute provides: "A holographic will is one that is entirely written, dated, and signed by the hand of the testator. It is subject to no other form, and need not be witnessed."

Which of the following served as the source for this type of statute?

The Code Napoléon served as the source for most of these statutes. The olographic will is a creation of the civil law.

Most states require that the holographic will be dated.

False. A date is a helpful addition to any will. The Code Napoléon (and legislation based on it) required a date. Most states, however, do not require attested wills or holographic wills to be dated. A handful, however, continue to require a date and will hold a will invalid in the absence of a date.

Testator executed an otherwise valid holographic testament on a piece of paper that had a preprinted letterhead on it. The letterhead included the name, address, and contact information for a business on it. Because the preprinted letterhead is not in the testator's handwriting, the holographic will is wholly invalid.

False. Most courts would easily disregard the letterhead and deem it to be surplusage.

Which of the following statements is true regarding the common law attested will?

(i) All attested wills are self-proving.

(ii) Attested wills must be notarized.

(iii) Attested wills are derived from the Civil Law notarial will.

None of the above are correct. The attested will is not automatically self-proving. Rather, a self-proving affidavit may be executed in connection with the execution of the attested will in order to make the attested will self-proving.

Attested wills do not generally require notarization. Rather, they require the attestation by two witnesses. To make the will self-proving, the self-proving affidavit is generally required to be executed before a notary.

Attested wills are not derived from the Civil Law notarial will. Rather, they are derived from the English Statute of Frauds. The attested will, in turn, inspired Louisiana's notarial will form.

T died testate and left the entirety of his estate to charity. T was survived by T's child, (C), T's brother (B), and T's parent (P). T had no prior will. Who has standing to challenge T's will on the basis of lack of capacity?

T's child, C, is the only party with standing. Usually, only an interested party can challenge a will based on lack of capacity. An interested party under these facts would be someone who stood to inherit in intestacy. Only C would be T's intestate heir under these facts because children inherit to the exclusion of parents and siblings in every state.

The existence of a confidential relationship between the testator and an alleged influencer will ____ the likelihood of a finding of undue influence.

Increase. As explained in Will Contests §7:4, a confidential relationship is usually critical to a successful undue influence challenge. In some states, the existence of certain confidential relationships can shit the burden of proof or applicable presumptions. A discussion of the varying approaches to burdens of proof begins at Will Contests §7:8 and continues through several sections.

T asked his attorney (A) to prepare a will for him. T and A are not related, but they have been close friends for many years. T wants to leave A a sizable gift in his will. Which of the following is correct regarding A's ethical duties?

A cannot prepare the will for T. See MRPC 1.8. Paragraph (c) makes it clear there is a conflict and that A should not prepare the will. Paragraph (f) makes it clear that the conflict is imputed to the entire firm. Recall from earlier chapters that in some states a purging statute might also apply to this situation.

T's will contains the following provision:

"If any beneficiary, heir, or other person challenges this will, then such person shall forfeit any bequest made to him herein."

This is an example of a/an __ clause.

This is an in terrorem clause. This type of clause is also called a "no contests" clause or a "penalty" provision. Most states recognize the enforceability of these types of provisions.

T's will left his entire estate to A--one of T's two children. The will contains a no-contest clause. T's other child, B, wants to challenge T's will on the basis of A's undue influence. No contest clauses are enforceable under applicable state law.

The no contest clause precludes B from challenging A's will on the basis of A's undue influence.

False. Most states permit no contest clauses. The utility of these clauses, however, is limited in many circumstances. The UPC approach (Colorado Probate Code §15-12-905) represents the majority rule view that a no-contest clause does not prevent a will challenge if there is probable cause. More importantly, B has nothing to lose under these facts. T's will left nothing to B so B will not forfeit any inheritance by bringing an undue influence challenge.

One method of revoking a will is to do so in the form of a testament. Most professionally prepared wills revoke all previous wills in the ______ clause.

Exordium. A typical exordium says "I, Testator, make this my last will and testament and revoke all prior wills."

After T died his will could not be located. Evidence showed that T was the last person to have possession of his will. Which of the following is correct?

T is presumed to have revoked his will by physical act. When the will was last in the possession of the testator and cannot be found after his death, the will is presumed to have been revoked by some physical act by the testator. See Restatement §4.1(j). Of course, this presumption is rebuttable.

Most states allow a testator to partially revoke his will by physical act.

True

T's attested will included the following provision: "I leave the sum of $1,000 to my nephew, N." T later (in his own handwriting) crosses out $1,000 and substitutes "$1,500." T dates and signs the alterations.

Applicable state law recognizes the doctrine of dependent relative revocation as well as partial revocation by physical act. Applicable state law does not recognize holographic wills. T dies and the will is admitted to probate. What is N entitled to receive?

$1,000. When T struck through the $1,000, that likely met the state requirements for a partial revocation by physical act. Revocatory intent, however, is an issue here. It appears that T probably intended to revoke the legacy and to substitute it with a larger legacy. If state law recognized holographic wills then N would have an argument that the changes constituted a holographic codicil of sorts. Of course, that argument would have some challenges because testamentary intent is not obvious solely from the handwritten language.

However, in a state that does not permit holographic wills, this argument fails. N still has hope if the state recognizes DRR. DRR treats a revocation as presumptively ineffective if the testator would not have revoked the will (or a provision in the will) but for some mistaken assumption of law or fact (see Restatement §4.3). It appears that T believed the handwritten portions would increase (rather than revoke) the gift to N. Therefore, under DRR the revocation is ineffective and N ought to receive $1,000.

The outcome might be different if T had written $500 instead of $1,500. Some courts have said that DRR does not apply to reinstate a larger bequest. Rather, those courts would hold the revocation valid and give nothing to N.

T's attested will included the following provision: "I leave the sum of $1,000 to my nephew, N." T later (in his own handwriting) crosses out $1,000 and substitutes "$1,500." T dates, but does not sign, the changes.

Applicable state law does not recognize partial revocation by physical act. State law does recognize holographic wills and the doctrine of dependent relative revocation. What should N receive from T's estate?

$1,000. The partial revocation is ineffective under state law and should be ignored. The changes are insufficient to constitute a holographic codicil because there is no signature--not even initials. Also, testamentary intent is not apparent from the handwritten portions. DRR does not apply here because there was no valid revocation in the first place.

T executed Will #1. T then executed Will #2, which expressly revoked Will #1. T later decides he prefers the terms of Will #1 to those of Will #2. T revokes Will #2 by physically destroying it. Which of the following is correct in most states?

T's estate is distributed by Will #1. This notion is called the "doctrine of revival." The revocation of the document that revoked the first will served to "revive" the first will. The nuances vary by state and T's intent is more important in some states than in others. (See Restatement §4.2). Most states recognize the doctrine of revival in some form.

A ____ ambiguity is evident from the face of a will.

Patent

Under the traditional approach, extrinsic evidence may be admitted to resolve _____.

Latent Ambiguities

T's will provides, in part, as follows:

"I leave the sum of fifty thousand dollars ($5,000) to A."

The will contains a _____ ambiguity.

Patent

T's will contains some controversial provision. One of T's beneficiaries, A, wants the court to reform T's will to align T's likely intent. Assuming the matter is governed by a state that allows open reformation, what is A's probable burden of proof?

Clear and Convincing Evidence

D's will provides as follows:

I leave my diamond earrings to A.

I leave the rest of my jewelry to B.

I leave $10,000 to C.

I leave my books to B and C.

I leave the remainder of my estate to X, Y, and Z.

What type of bequest is the bequest of the earrings to A?

Specific

I leave my diamond earrings to A.

I leave the rest of my jewelry to B.

I leave $10,000 to C.

I leave my books to B and C.

I leave the remainder of my estate to X, Y, and Z.

What type of bequest is the bequest of $10,000?

General

D's will provides as follows:

I leave my diamond earrings to A.

I leave the rest of my jewelry to B.

I leave $10,000 to C.

I leave my books to B and C.

I leave the remainder of my estate to X, Y, and Z.

What type of bequest is the bequest of the remainder of the estate to X, Y, and Z?

Residuary

D's will provides as follows:

I leave my diamond earrings to A.

I leave the rest of my jewelry to B.

I leave $10,000 to C.

I leave my books to B and C.

I leave the remainder of my estate to X, Y, and Z.

D is not related to anyone named in the will. B predeceases D. Who inherits the jewelry (other than the diamond earrings)?

X, Y, and Z

Lapse of a specific bequest would fall to the residuary beneficiaries in this case

D's will provides as follows:

I leave my diamond earrings to A.

I leave the rest of my jewelry to B.

I leave $10,000 to C.

I leave my books to B and C.

I leave the remainder of my estate to X, Y, and Z.

D is not related to anyone named in the will. X predeceases D. State law uses the "no residue of a residue rule." Who inherits X's share of the estate?

D's intestate heirs

In states that do not apply the no residue of a residue rule, X, Y and Z are considered a class and Y and Z would inherit X's interest in the estate.

D's will provides as follows:

I leave my diamond earrings to A.

I leave the rest of my jewelry to B.

I leave $10,000 to C.

I leave my books to B and C.

I leave the remainder of my estate to X, Y, and Z.

D is not related to anyone named in the will other than A. A is D's child. A predeceased D. A is survived by A's child Q. Who inherits the earrings?

Q inherits the earrings. The anti-lapse statute of most states would apply to this scenario and Q would inherit the earrings in A's place.

T's will made the following bequest: "I leave my Corvette to A." Prior to T's death, T gave the Corvette to B. Who is entitled to the Corvette?

B is entitled to the car. This is an example of Ademption by Extinction.

T's will made the following bequest:

"I leave my diamond earrings to A."

When T wrote the will, T had small diamond earrings. Prior to T's death, T lost those earrings and replaced them with much larger, more expensive, diamond earrings. A is entitled to the fancier earrings found in T's estate.

True. A is likely entitled to the nicer earrings. Wills are generally given effect as of the date of the testator's death. The vague description benefits A. If T's description had been more specific, A might have a more difficult argument.

T's will left his estate as follows:

1. I leave my Rolex watch to A.

2. I leave $10,000 to B.

3. I leave $5,000 to C.

4. I leave the remainder of my estate to D.

T's estate has considerable debts. In what order will T's bequests abate?

4, 2 and 3 pro-rata, 1

The usual order of abatement is 1. Residuary, 2. General, 3. Specific and Demonstrative. See Restatement §1.1(f))

T executed his will when he was married to S. T's will provided, in relevant part, as follows:

"I leave S the sum of $50,000. I leave the remainder of my estate to my children, in equal shares. I name S as the executor of my estate."

T and S are divorced when T dies.

S is entitled to inherit the $50,000.

False. Gifts to a spouse are ordinarily revoked by operation of law upon the divorce of the spouses. Most states will have a statute directly on point. (See Restatement §4.1 (o)). You may wonder what happens to that $50,000. In this case, it would fall to the children. T's children would inherit the entirety of his estate--which is probably was T would have wanted to have happen.

T executed his will when he was married to S. T's will provided, in relevant part, as follows:

"I leave S the sum of $50,000. I leave the remainder of my estate to my children, in equal shares. I name S as the executor of my estate."

T and S are divorced when T dies.

S is entitled to serve as executor.

False. States have struggled to address all the issues that ought to be addressed by divorce. In most states, however, divorce will also revoke any fiduciary or similar appointments made to a spouse if the couple divorces after the execution of the will. Remember, however, that T could specify that some provision in favor of a spouse is intended to apply even if the couple is later divorced.

T died testate leaving his entire estate to his sister (S). T was not married. In addition to S, T was survived by 2 children (A) and (B). A was alive when T executed his will. B was born after T executed his will. A and B want to know what rights they may have as pretermitted heirs. Which of the following describes the proper distribution of T's estate?

Applicable state law uses an approach modeled on the original UPC.

1/2 to B/ 1/2 to S.

The original UPC offered protection only to the child born or adopted after the execution of the will. Under these facts, B would be entitled to an intestate share--1/2. S would receive the remainder of the estate per the terms of the will. A is out of luck. See Restatement §9.6(b).

T died testate leaving $1,000 to his child (A), and the remainder of his estate to his sister (S). T was not married. T's second child, B, was born after T executed his will. A, B, and S all survived T. B want to know what rights he may have as a pretermitted heirs. Which of the following describes the proper distribution of T's estate?

Applicable state law uses an approach modeled on the original UPC.

$1,000 to A, 1/2 of the remainder of the estate to B, 1/2 of the remainder of the estate to S.

Under the original UPC, B would be entitled to an intestate share (1/2) that would be payable from the residual bequest. Restatement §9.6.

T died testate leaving $1,000 to his child (A), and the remainder of his estate to his sister (S). T was not married. T's second child, B, was born after T executed his will. A, B, and S all survived T. B want to know what rights he may have as a pretermitted heirs. Which of the following describes the proper distribution of T's estate?

Applicable state law uses an approach modeled on the revised UPC.

$500 to A, $500 to B, remainder to S.

B does not fare as well under the Revised UPC. The revised UPC provides that if T made a bequest to a living child in his will, then afterborn or after-adopted children essentially share in that bequest. Here, A and B will have to share the $1,000 and S remains entitled to the remainder of T's estate. Restatement §9.6.

At common law, the law of trusts and fiduciary relationships is rooted in property law.

True. In contrast, civilian fiduciary relationships are rooted in the law of obligations.

A trust fails if the trust instrument fails to designate a trustee.

False. A trust does not fail for lack of a trustee. The proper court can always name a trustee. A valid trust simply requires intent, ascertainable beneficiaries, property to be administered, and in some cases a particular form requirement.

The trustee is often said to hold ___ title to trust property.

Legal. See Bogert's Trusts and Trustees §1. In contrast, the beneficiary is said to own equitable title.

At common law, breach of a fiduciary duty is usually a tort action.

True. This is because fiduciary duties at common law arise from property rights. In contrast, fiduciary duties at civil law usually derive from obligations.

X establishes a trust for the benefit of Y. Y is the sole trustee and sole beneficiary of the trust. The trust is valid under traditional common law.

False. As indicated by Uniform Trust Code §402 the same person should not be both sole trustee and sole beneficiary. This creates a problem of merger (See Restatement §69). Some states, however, permit this type of arrangement.

To establish a testamentary trust, the settlor must have a mental capacity that is ______ the capacity to execute a valid will.

the same as

S establishes an irrevocable trust for the benefit of B with the following provision regarding the payment of income and principal:

"During the term of the trust the trustee shall pay to B, or for his benefit, as much income and principal is needed for B's health, education, maintenance, and support."

The trust is a purely discretionary trust.

False. The trustee's payments are not discretionary. Rather, the trustee is required to make payments that are defined by ascertainable/objective standards. At state law, B could sue to compel payments from the trustee. This is better described as a support trust.

S establishes an irrevocable trust for the benefit of B with the following provision regarding payment of income and principal:

"During the term of the trust, the trustee has the discretion to pay or to not pay any sum of trust property to B. Trustee is under no obligation to distribute any trust property to B during the term of the trust and any payments are made in the trustee's sole and absolute discretion."

B owes substantial credit card debt for frivolous expenses. B's credit card creditors can seek satisfaction from B's interest in the trust.

False. The trust is a purely discretionary trust and B's creditors cannot exercise rights that B himself could not exercise. See also UTC §504.

Which of the following is not a common exception to the creditor protection offered by a spendthrift trust?

a. Child Support Claims

b. Spousal Support Claims

c. Tort/crime victim claims

d. All of the Above are Common Exceptions

Tort/crime victim claims. Only a handful of states (like Louisiana) permit crime/tort victims to seek satisfaction from an interest in a spendthrift trust. Most states recognize exceptions for child support, spousal support, necessary services related to the trust, and certain federal law claims. See UTC §504.

Which of the following is not typically a remedy for a trustee's breach of his fiduciary duty?

Punitive damages

UTC §1001 contemplates numerous remedies for breach. Punitive damages, however, are unusual. Dissolution of the trust is also not usually a remedy.

The trustee's duty of loyalty usually prohibits which of the following?

Self-dealing

(c). See Bogert's §543; Restatement §78. Conflicts of interest are also prohibited by the duty of loyalty.

Trustee sold a trust asset to himself for fair market value. Which of the following is a valid defense to an action by the beneficiary alleging breach of fiduciary duty?

The trustee was authorized to self-deal in the trust instrument.

(c). Self-dealing is permitted in three instances: (1) authorized by the trust instrument, (2) prior beneficiary consent, (3) prior court approval. See UTC §802. Under the "no further inquiry" rule, good faith and profit are not adequate defenses.

A, B, and C are the co-trustees of a testamentary trust. The trust instrument is silent with respect to how decisions regarding the trust should be made. In most state, the co-trustees can only act if they all agree on the course of action.

False. Traditionally, common law would require unanimity in these circumstances. Under the modern approach, however, majority vote is sufficient. See UTC §703; La. Rev. Stat. §9:2114)

In administering the trust, the trustee is bound to act as a _________

prudent person

(b) Trustees are held to a prudent administrator standard. This is higher than the reasonably/ordinary person standard. See UTC §804.

A trustee with special skills is obligated to use those special skills.

(a) True. See UTC §806.

T is the trustee of an irrevocable trust established for the benefit of A and B. The trust provides little guidance in how T should administer the trust. T can administer the trust in a manner more favorable to A than to B.

(b) False. The trustee owes a duty of impartiality in the administration of the trust. See Restatement §79 and UTC §803.

A trust instrument contains the following provision:

"Trustee is hereby relieved from all liability in connection with the administration of the trust, including gross misconduct and acts in bad faith."

The provision was not inserted as a result of undue influence or overreaching on the part of the trustee. The provision is enforceable.

(b) False. UTC §1008 makes it clear that a provision like this is unenforceable. Specifically, an exculpatory clause is unenforceable to the extent that it "relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries." Clauses inserted as a result of abuse of a confidential relationship are unenforceable regardless of their substance.

T is the trustee of an irrevocable trust. Absent some provision to the contrary in the trust instrument, T should act as a ___ in the investment of trust assets.

Prudent Investor

See Restatement §90. The trustee is usually held to a "prudent investor" standard which adopts a portfolio theory of investment, encourages diversification, and permits a more modern investment approach.

T is the trustee of an irrevocable inter vivos trust established by S for the benefit of B. An item of trust property was recently damaged by the tortious conduct of a third party. Who should sue the third party to recover damages?

T. The trustee is the party that should bring and defend claims relating to the trust. See UTC §811. If the trustee fails to do so, then many states will permit B to bring the action to protect his interest.