WILLS & TRUSTS
Professor Gloria J. Banks
INTRODUCTION TO ESTATE PLANNING
1) INHERITANCE AND ITS LIMITATION
a) Taking Property without Just Compensation
i) The right to transfer property at death is a property right
ii) The state cannot completely eliminate the power transfer of property at death. Hodel v. Irvin
iii) If the state completely removes the ability to transfer property at death, it constitutes a taking that requires just
b) The Constitution itself does not grant the right to transfer or receive property
i) The state may limit the power to transfer property
ii) The right to receive property is a creature of statute
c) Restraints on Marriage
i) Total restraints on marriage are void as against public policy
(1) Promote marriage
(2) Promote reproduction
(3) Society benefits from marriages
ii) Partial restraints must be reasonable
(1) Limiting the amount of inheritance if child gets married is reasonable (ex. Married daughter gets less;
single daughter gets more; rationale that married daughter does not need more is a reasonable restriction)
iii) If a will requires that a beneficiary marry within a certain religion, courts have held that such restriction is
2) THE PROBATE PROCESS
a) Probate v. Non-probate
i) Probate requires court proceedings before the beneficiaries are entitled to take
ii) In non-probate transfers, the beneficiary is immediately entitled to take without going through probate
b) Functions of Probate
i) Transfer Wealth
ii) Clear Title
iii) Protection from Creditors; paying taxes
iv) Fulfilling the testamentary intent of the decedent (*arguably the most important function*)
i) Offer the will for probate
ii) Collecting assets
iii) Paying family allowance and setting aside homestead and exempt personal property
iv) Paying creditors' claims and taxes
v) Distributing the assets of the estate upon the probate court entering decree of distribution
i) Executor: Personal representative named in a will
ii) Administrator: personal representative appointed by the court
iii) Succession: beneficial entitlement to the property of the decedent
iv) Heir: person entitled by statute to the land of the intestate
(1) Expected: takes by inheritance
(2) Prospective: may inherit but may be excluded
(a) Heir presumptive: will inherit if the intestate dies immediately but who will be excluded if other
relatives of closer relationship are born
(b) Heir apparent: one who is certain to inherit unless excluded by a valid will
v) Ascendant or Ancestor: person related to an intestate or to a claimant to an intestate share in the ascending
vi) Descendant: person related to an intestate or to a claimant to an intestate share in the descending lineal line
vii) Collateral: relative who traces relationship to an intestate through a common ancestor but who is not in his
lineal line of ascent or descent
viii) Affinity: relationship by marriage
ix) Consanguinity: relationship by blood
x) Escheat: property escheats to the state if no relatives of the intestate are entitled to take
xi) Devise: clause directing the disposition of real property in a will
xii) Devisee: person who is named to take real property
xiii) Legacy: clause in a will directing the disposition of money
xiv) Bequest: clause directing the disposition of personal property other than money
xv) Res or Corpus: property to which the trustee is responsible to administer in a trust
e) Avoiding Probate
i) Take title in joint tenancy
ii) Create an intervivos trust
iii) Designate a payable-on-death beneficiary in a life insurance contract or other contract
iv) Where the amount is small, states may permit heirs to avoid probate
v) PA § 3102 provides that an estate valued at less than $25,000 need not go through probate
f) Probate Procedure
i) Opening probate
(1) Determining jurisdiction
(2) Notifying creditors by publication in newspaper for a period of time
ii) Supervising the Representative's Actions
(1) Court supervision
(2) Approval of inventory and appraisal
(3) Payment of debts
(5) Options on real estate
(6) Borrowing funds
(7) Other fees payable (attorneys etc.)
iii) Closing the estate
(1) Representative is under a fiduciary duty to the estate until the court grants discharge
3) PROFESSIONAL RESPONSIBILITY
a) A lawyer should not prepare a will unless the lawyer is competent to do so
b) Lawyers owe fiduciary duties to their clients
c) Lawyers also owe a duty of care to foreseeable third party beneficiaries of wills
d) Claims against lawyers may arise out of contract or negligence
INTESTACY: ESTATE PLAN BY DEFAULT
1) DEFINITION AND JURISDICTION
a) Estate plan by default where Decedent dies without a will, the will is invalid, or property is not disposed of by will
b) Jurisdiction: generally where the decedent was domiciled at the time of his or her death
c) Entire intestacy or partial intestacy is permissible
2) DETERMINING PROBATE V. NON-PROBATE PROPERTY
a) Probate v. Non-Probate Property
i) Probate property is any property passing under the decedent’s will or by intestacy.
ii) Non-Probate Property passes outside the will or the Intestacy Statute.
(1) Life insurance policies.
(2) Joint tenancies w/ right of survivorship.
(3) Payable on Death Contract
(4) Transfer on Death property under a trust
(5) Intervivos Trusts
i) The instrument creating the non-probate property interest must have been effective before death
b) Cryogenically Preserved Sperm Hecht v. Superior Court
i) Sperm is property subject to devise by will
ii) Donating sperm by will is not void as against public policy
3) DETERMINING WHO IS ENTITLED TO TAKE
a) Requirement of Survivorship
i) A person is not entitled to take unless he or she survives the decedent by a specified instance of time.
ii) Under both the UPC § 2-104 and under Pennsylvania § 2104(1), an heir must survive the decedent for 120
hours (five days)
b) Determination of Death (UPC § 1-107)
i) Survivorship must be proved by the preponderance of the evidence. Janus v. Tarasewicz
ii) Lay witnesses—evidence of positive signs of life in one person and not in the other
iii) Medical professionals—must be made in accordance with the usual and customary standards of the medical
(1) Cardiopulmonary Standard—heart beat, breathing, etc.
(2) Brain death standard (adopted in all states)—total cessation of the entire brain function including the
brain stem. The factors include:
(a) No response to intense pain
(b) No spontaneous movement or breathing for one hour
(c) No blinking, swallowing, and fixed or dilated pupils
(d) Flat EEGs taken twice within a 24-hour intervening period
(e) Absence of drug intoxication or hypothermia
(3) The upper brain death standard has not been adopted. It is too broad—would include comatose people,
mentally incapacitated people, etc.
c) Surviving Spouse is entitled to an intestate share of the decedent’s estate. A universal prerequisite is that the
spouse was married at the time of the decedent’s death. (UPC 2-802(a) excludes divorcees or annulled marriages)
i) PA § 2102
(1) The surviving spouse is entitled to take the entire estate if no issue or parent survive the decedent
(2) If a parent survives but no issue survives, the surviving spouse is entitled to take 30,000 plus one-half of
(3) If issue of both the decedent and the surviving spouse survive, the surviving spouse is entitled to take
30,000 and one-half of the balance
(4) If decedent has issue of his own and not of surviving spouse, surviving spouse is entitled to take one-half
of the estate
ii) UPC § 2-102
(1) The surviving spouse is entitled to take the entire estate if
(a) No child or parent survives the decedent OR
(b) Children of both decedent and surviving spouse survive the decedent and spouse has no other
children of her own
(2) The surviving spouse is entitled to the first 200,000 and three fourths of the balance if
(a) A parent survives the decedent but decedent has no children
(3) The surviving spouse is entitled to the first 150,000 and one-half of the balance if
(a) Decedent and spouse have children AND spouse has children of her own
(4) The surviving spouse is entitled to take the first 100,000 and one-half of the balance if
(a) Decedent has children of his own
d) Table of Consanguinity: Others Entitled to Take After Surviving Spouse
i) Under UPC § 2-103:
(1) If there are children, the children take by representation
(a) Children, grand children, great-grand children
(2) If there are no children but both parents survive, parents take equally if both survive or all to the
(3) If there are no children or parents, descendants of the parents take by representation
(a) Brothers, sisters
(b) Nephews nieces
(c) Grandnephews and grandnieces
(d) Great-grandnephews and great-grandnieces
(4) If there are no children, parents, or descendants of the decedent’s parents, then to the decedent’s
grandparents or descendants of grandparents; half to each side
(a) Uncles and aunts
(b) First cousins
(c) First cousins once removed
(d) First cousins twice removed
(e) First cousins thrice removed
ii) Under Pennsylvania § 2103:
(1) Issue of the decedent
(a) Children, grand children, great-grand children
(2) Parents of the decedent
(3) Brothers and sisters of the decedent or their issue
(a) Nephews nieces
(b) Grandnephews and grandnieces
(c) Great-grandnephews and great-grandnieces
(4) Grandparents of the decedent
(5) Uncles, aunts, and their children and grandchildren
(6) Commonwealth of PA (Escheat)
i) Whole and Half-blood
(1) PA § 2104(3) treats whole and half-blood relatives the same
(2) UPC § 2-107 treats whole and half-blood relatives the same
ii) In Gestation (After-born persons or Post-Humous)
(1) PA § 2104(4) if a person is begotten before decedent’s death but born thereafter, he shall take as if born
in decedent’s lifetime
(2) UPC § 2-108: if a person is in gestation before decedent’s death, he is considered living if he survives
120 hours after birth
(3) Common Law:
(a) Presumption that a husband is the father of any child born to his wife
(b) There is a rebuttable presumption that a person born within nine months after the decedent’s death,
the person is the decedent’s child and child is entitled to take
iii) Children of Assisted Conception Act § 4(b)
(1) Donor of sperm or egg is not considered the parent for post-humous conception of the resulting child
(2) An individual who dies before conception or implantation of the sperm/egg is not a parent
iv) Adoption of Children
(1) PA § 2108: Inheritance by, from and through an adopted person
(a) Child is considered issue of the adopting parent
(b) Shall not be considered child of the natural parent but
(i) Child can inherit from the adopting step-parent who marries the natural parent and can take from
(ii) Child can take from other natural relatives if natural relatives maintain a familial relationship
with the child
(2) UPC § 2-114: Inheritance by, through, or from an adopted person
(a) Adopted child is child of adopting parents, not of birth parents UNLESS
(i) Spouse of the natural parent (Step-parent) adopts the child
(ii) Child can inherit from the step-parent and the natural parent
(3) Common Law:
(a) Adopted children have the same general rights as natural children
(b) Adopted children lose all rights of inheritance from or through their natural parent. Hall
v) Equitable adoption: O’Neal v. Wilkes
(1) P was sent by her aunt to live w/ the Cooks who treated her as their own child but they never adopted her.
(2) When the Cooks died, P argued she was VIRTUALLY OR EQUITABLY ADOPTED by the Cooks for purposes
(3) HOLDING: Because the aunt did not have legal authority to consent to an adoption of P by the Cooks,
there can be no equitable adoption.
(4) DISSENT: “Equity considers that done which ought to be done.” In equity, the court should carry out
the intent of the decedent.
vi) Adult Adoptions at Common Law
(1) Adult adoptions are generally permissible
(2) Exceptions: Adoption of a lover: sexual relationships are not compatible with the parent-child
vii) Persons Born out of Wedlock
(1) PA § 2107(b): person born out of wedlock is considered the child of his or her mother.
(a) PA § 2107(c): person born out of wedlock is considered the child of the father if identity of the father
is determined by any of the following three:
(ii) Clear and convincing evidence that
1. the father openly holds out the child to be his AND receives the child into his home OR
2. the father openly holds out the child to be his AND provides support
(iii) Court determination of paternity by clear and convincing evidence
f) Persons Entitled to Take Under Two Lines
i) PA § 2104(9): heirs take from the greater of the two lines
4) DETERMINING THE ENTITLEMENT
a) Types of Distribution
i) Per Stirpes with Representation (Common Law)
(1) Descendants only get what the predeceased was entitled to get
(2) Shares are always determined at the first generational level, even where there are no living takers at that
ii) Per Capita with Representation (PA § 2104(1))
(1) Emphasis on the living takers
(2) Shares are determined at the first generational level where there is a surviving descendant or predeceased
descendant with surviving issue
iii) Per Capita at Each Generational Level (UPC § 2-104)
(1) Shares are determined at the first generational level where there is a surviving descendant or predeceased
descendant with surviving issue
(2) Disburse shares among the number of living
(3) Remaining shares are combined and distributed amongst the living takers at the next level
(4) Process is repeated until there are no more living takers
(5) Policy: everyone taking at the same level gets the same share
5) DETERMINING BARS TO SUCCESSION
a) Murder: Slayer Statutes
i) PA § 8801 and § 8802
(1) No slayer shall take or receive any benefit as the result of the death of the decedent
(2) Slayer—person who participates as principal or accessory before the fact in the willful and unlawful
killing of any other person. Defined by the Pa. Criminal Code
(a) Intentionally, knowingly, recklessly, or negligently killing another
(b) May include causing or aiding suicide
(c) Conviction for manslaughter may bar inheritance. Mahoney
(d) Justifiable killings are excluded (accident, self-defense etc.)
(3) Slayer of decedent is not entitled to take property as a result of the decedent’s death—slayer is treated as
if he predeceased the decedent
ii) UPC § 2-803
(1) Any individual who feloniously and intentionally kills the decedent forfeits all benefits of inheritance
(2) The killer is treated as if he disclaimed all benefits
(3) Conviction of a felonious and unlawful killing is conclusive proof that the individual was a killer
(4) If no conviction, the challenging party can petition the court for a determination that the individual was a
iii) Common Law: In a jurisdiction that does not have a slayer statute, legal title can pass to the slayer but equity
holds him to be constructive trustee for the heirs of the decedent
(1) Is the conduct prohibited under the slayer statute
(2) What property is affected by the killing
(3) Who takes in lieu of the slayer
b) Living Will: PA 5301 et seq.
i) PA 5404: (1) Qualified patient who has executed a declaration in writing may direct what (2) life-sustaining
treatment should be provided for him, if he is (3) unconscious or (4) in a terminal condition
ii) Must be of sound mind and 18 years of age
iii) Two witnesses required
iv) Qualified patient must sign the declaration
v) Can be revoked at any time in any manner
vi) Becomes operative when (1) a copy is provided to the attending physician and (2) attending physician
declares the declarant to be incompetent
c) Adultery: PA § 2106: Spouses may be disqualified from inheritance or an elective share if they commit adultery or
abandon the decedent spouse
d) Disclaimer: PA 6201 et. seq. and UPC 2-801 et. seq.
i) Beneficiary can disclaim any testamentary gift
ii) Avoid tax liability
iii) Avoid creditors
e) Forfeiture: PA § 2106
i) Spouse forfeits inheritance if ONE YEAR and
(1) Willfully neglects the other spouse OR
(2) Willfully and maliciously deserts the other spouse
ii) Parent forfeits inheritance if ONE YEAR and
(1) Willfully neglects the child OR
(2) Willfully and maliciously deserts the child
f) Transfers to Minors: Uniform Transfer to Minors Act: PA 5301 et seq. & UPC 5-201 et seq.
i) Under both PA 5201 and UPC 5-103, a minor is any person under 21 years of age
ii) Minors do not have legal capacity to manage property (Pa § 303).
iii) Must have guardianship, custodianship, or trusteeship
i) Common Law: everything was presumed to be an advancement, rebutted only if proven that the transfer was
an inter vivos gift
ii) UPC § 2-109 and PA § 2109.1 provide that the transfer is an advancement only if
(1) In writing AND
(2) Decedent expressly declares or acknowledges that the gift is an advancement
iii) Hotchpot Calculation
(1) Add the amount of advancements to the estate; distribute evenly amongst beneficiaries; subtract the
amount of the advancement from each beneficiary
(2) If the beneficiary receives more from the advancement than from the share, beneficiary keeps that amount
and the rest is divided equally amongst the remaining beneficiaries
CAPACITY AND WILL CONTESTS
1) MENTAL CAPACITY REQUIREMENT
a) The decedent must be of sound mind at the time of execution
i) This requirement protects society, the decedent’s family, and the decedent him/herself.
ii) Under Pa. 2501 and UPC 2-501, any person 18 or over and who is of sound mind may make a will.
b) Test for Sound Mind: The decedent must know
i) The nature and extent of his property
ii) The natural objects of his bounty
iii) How the property will be distributed
iv) How these elements relate in planning for the disposition of his property
c) In re Strittmater: Testator was not of sound mind where she devised property to a feminist organization because
she hated men. She was also under psychiatric therapy.
d) Insane delusions can operate to invalidate all or part of a will
i) Test: An extreme misconception of reality to which the testator adheres against all proof to the contrary. This
is determined by the totality of the circumstances.
(1) Delusions are false concepts of reality
(2) Insane means that the testator is confronted with fact but continues to adhere to delusions
(a) Minority View: If there is any factual basis for the testator’s delusion, the testator is not insane
(b) Majority View: Even if there is a factual basis for the testator’s delusions, the testator is insane if a
reasonable person in the testator’s position could not have drawn the same conclusions
(3) There must be a causal connection between the delusion and the provision in the will
e) In re Honigman: Husband, who was otherwise sane, had insane delusion about his wife’s infidelity, and this led
him to cut his wife out of the will. Facts that indicated infidelity included (1) anniversary card from wife’s friend;
(2) he thought she was sneaking lovers up with a sheet into her bedroom; (3) he thought she was hiding men under
her closet; etc.
f) A mistake will not necessarily invalidate a will because a mistake is subject to correction.
i) Courts will reform the will allow a will to pass through probate if there is a mistake
ii) Courts will usually not allow a will to pass thorough probate if there is an insane delusion
iii) Under the UPC, if a testator mistakenly believes a child is dead, the child is still entitled to take
2) UNDUE INFLUENCE
a) All or part of a will may be set aside if it was the result of undue influence
i) Rule: mental coercion that destroyed the testator’s free will and forced him to replace his intent with the intent
of another. The elements include:
(1) Testator was susceptible to undue influence
(2) The influencing party had motive and opportunity
(3) The disposition is the result of the influence (causal connection between disposition and influence)
(4) The Testator’s intent was replaced with that of another
ii) Burden of Proof is on the party who challenges the will. Consider the circumstances:
(1) Emotional, physical, and mental state of the testator
(3) Family status
(4) Isolation from the outside world
b) Lawyers: Model Rule of Professional Conduct 1.8(c) provides that a lawyer shall not prepare an instrument giving
the lawyer or a person related to the lawyer as parent, child, sibling, or spouse any substantial gift from a client,
including a testamentary gift, except where the client is related to the donee.
i) The comments provide that the transaction must meet the general standards of fairness.
ii) Generally, holiday gifts of appreciation are permissible.
iii) If the transaction requires preparing a legal instrument, such as a will or conveyance, the client should have
the detached advice that another lawyer can provide.
iv) The only exceptions are where the client is a relative of the donee or the gift is not substantial
c) Lipper v. Weslow: No undue influence where there was no proof showing that the testator’s testamentary
disposition was substituted with that of her son even though her son was a lawyer, he lived next door, he drafted
the entire document, etc.
d) In re Will of Moses: Presumption of undue influence exists where a sexual relationship between an attorney and a
client coexists during the attorney-client relationship even though an independent counsel drafted the will
e) In re Kaufmann’s Will: Undue influence is a question of fact where the testator is easily swayed. In this case,
testator’s gay partner dominated the relationship. Testator eventually left everything to the gay partner.
f) No-Contest Clauses in Wills: any person who contests will be disinherited. If the contesting party is successful,
the clause fails with the rest of the will. Under the UPC, an unsuccessful party can still take if the contest was
based on probable cause and the challenger acted in good faith. (UPC § 2-517).
a) Fraud is the intentional or willful deception or misrepresentation of material fact by another
i) Testator must be deceived by the misrepresentation
ii) Testator must do that which would not have been done but for the misrepresentation C
iii) Challenge to the will must show a connection between the fraud and the testamentary act
b) Types of fraud
i) Fraud in the Inducement: Testator executes the will based upon misrepresentation of facts
ii) Fraud in the Execution: Testator executes the will that is different from that which was intended
i) A general constructive trust will be used to prevent unjust enrichment
ii) Cardozo: "a constructive trust is the formula through which the conscience of equity finds expression"
iii) Fraud-Rectifying Trust is a constructive trust used to rectify fraud
iv) Tortious Interference with Expectancy: another theory that can rectify fraud or undue influence if the plaintiff
proves the interference involved tortious conduct
v) Latham v. Father Divine: constructive trust will be imposed by the court where the testator was prevented
from executing his will
EXECUTION: FORMS AND FORMALITIES
a) Purpose of Execution
i) Ritualistic purposes: a will is a very important event, namely, the deliberate intent to transfer property
ii) Evidentiary requirements are satisfied
iii) Due execution safeguards the testator
iv) Due execution assures to the testator that his wishes will be carried out
b) General Rules
i) PA 2502: a will must be in writing and signed by the testator at the end thereof.
(1) However, words following the signature do not invalidate the preceding portions
(2) Mark: If the testator is unable to sign for any reason, a mark will suffice provided that the testator makes
the mark in the presence of two witnesses and who sign their names in the testator’s presence
(3) Signed by Another: If the testator cannot sign or mark the will, the testator may expressly direct another to
sign for him or her provided that it is done so in the presence of the testator and he declares before two
witnesses that the document is his last will and testament
ii) UPC 2-502 generally requires that a will be in writing and signed by the testator in the conscience presence of
(1) However, another individual can sign for the testator if that individual is in the testator’s conscious
presence and the testator directs the individual to sign
iii) UPC 2-503 also has a substantial compliance provision if the formal requirements of execution are not met.
The proponent of a will must prove by clear and convincing that the decedent intended that the disputed
document or writing is
(1) The decedent’s will
(2) Partial or complete revocation f the will
(3) An addition to or an alteration of the will or
(4) A partial or complete revival of his formerly revoked will or a formerly revoked portion of the will
(5) The purpose behind § 2-503 is to serve the purposes of due execution even where formalities are lacking
c) Requirements that Both Witnesses be Present
i) PA 2502 only requires two witnesses if the testator himself does not provide a signature. If the witnesses are
required, they must be present and sign with the testator all at the time of the testator’s act of signing the will
ii) UPC 2-502 requires that at least two individuals must sign the will within a reasonable time after witnessing
one of the following
(1) Signing of the will
(2) The testator’s acknowledgement of the signature or
(3) The testator’s acknowledgment of the will
iii) Conscious Presence Test (Codified in UPC 2-502(2)): If the testator, through sight, hearing, or generally
through consciousness can comprehend that the witness is signing the document, the "presence" requirement
iv) Line of Sight Test: If the testator was looking, he could see the act of signing
v) In re Groffman: Testator took out an already signed will and had his friends sign. They signed in the dining
room while the testator was in the other room.
(1) The witnesses and testator must be present and sign all at the same time
(2) The purpose of the witness requirement is too watch the testator sign the will
d) Competency of Witnesses
i) PA 2502 only requires two witnesses when the testator himself does not provide a signature. If witnesses are
required, the witnesses must be disinterested.
ii) UPC 2-505 provides that
(1) an individual generally competent to be a witness may act as a witness to a will.
(2) An interested witness does not invalidate the will
iii) Purging Statutes: An interested witness is only entitled to take the amount he would receive under intestacy
(no "extra benefit")
iv) Interested Witnesses at Common Law
(1) Witness cannot be interested whatsoever
(2) Interested witnesses are considered not competent to witness a will
(3) A subsequent disclaimer does not transform an interested witness into a disinterested witness
(4) Disclaimer must come before death in order to validate the witness
(5) Estate of Parsons: Three witnesses signed the will, two of which were beneficiaries. One filed a
disclaimer of her bequest in the will. The court applied the per se common law witness rule and
invalidated the will.
e) Recommended Method of Executing a Will
i) The law of the decedent’s domicile at death determines the disposition of personal property under a will.
ii) The law of the state where real property is located determines the disposition of real property under a will.
iii) As such, a will should be executed so that it will admitted into probate in all jurisdiction that potentially
govern the disposition of personal and real property under a will.
f) Self-Proving Affidavit
i) Where the testator and witnesses, after executing the will, execute an notarized affidavit reciting that the
requirements for due execution have been met.
ii) This allows probate even where witnesses may have died or are unable to testify at trial
iii) PA 3132.1
g) Self-Proved Wills
i) A will that does not contain signatures of witnesses on the will itself but has an attached affidavit referring to
the will and signed by witnesses is a self-proved will that can be admitted to probate.
ii) In re Will of Ranney: four page will executed before two witnesses and a notary, acknowledged the will as his
own, and all believed that they met the attestation requirements. The court admitted the will to probate.
(1) Not literal compliance, but substantial compliance
(2) Attestation occurs during the act of signing
(3) Affidavits occur after the act of signing
h) Mistake in Execution
i) A court will not reform a will to allow probate when there is a mistake in execution of the will in that one
party mistakenly signs the will of another
ii) In re Pavlinko’s Estate: Testator signed the will of his wife, and wife signed the will of testator. The attorney
and secretary acted as witnesses. Testator and wife did not know much English
(1) A will must be signed by its rightful testator by statute
(2) Court would have to rewrite the entire will
(3) Dissent: testamentary intent should control, especially where there is an individual and proper residuary
clause. Not all of the will at issue was ineffective.
i) Oral Wills:
i) Nuncupative wills
ii) Sometimes called "soldier’s will"
iii) Generally impermissible in every jurisdiction including PA
j) Statutory Wills
i) Short wills with terminology provided by statute
ii) Spaces are provided for beneficiaries etc.
iii) Other requirements of execution must be followed
k) Holographic Wills
i) Defined: a holographic will is handwritten and signed by the testator.
ii) UPC 2-502(b) provides that a will is valid as a holographic will if signed by the testator and the material
portions are in the testator’s handwriting
iii) Testamentary provisions of a holographic will, when read, must provide sufficient evidence of testamentary
(1) In re Johnson: A fill-in-the-blank, "form" will was completed in T’s handwriting, but when the
handwritten portions were read, the will did not sufficiently indicate testamentary intent.
(2) Court did not admit the will to probate
(3) The term "estate" alone does not supply the sufficient testamentary intent
iv) Informal letters can be deemed testamentary in character by the circumstances
(1) In re Kimmel’s Estate: letter read "if enny thing happens" and upheld as testamentary disposition of
(2) Signed as "father" sufficient for the signature requirement because testator was known as "father" (i.e.,
a) The Testator must have the capacity to revoke a will
b) Methods of Revocation
i) Operation of Law
ii) Later will or codicil
iii) Physical act of destruction coupled with revocatory intent
c) PA 2505 provides that revocation can occur only by (1) will or codicil; (2) other writing sufficient to satisfy the
execution requirements; or (3) by burning tearing, canceling, obliterating or destroying the document with the
intent to revoke
i) Done by the testator himself or
ii) By another at the express direction and in the presence of the testator
iii) Revocatory act must touch the text of the will
d) UPC 2-507 is substantially the same as PA, however, the revocatory act need not touch the testamentary
provisions on the will itself.
i) Partial Revocation is permissible (UPC § 2-507)
ii) One revocation is the equivalent of a revocation of all duplicates
iii) Where testator is last known to posses the will at the time of testator’s death and the will is not found, a
rebuttable presumption arises that the will was destroyed by the testator (revoked)
(1) The presumption can be rebutted by finding the will
(2) Harrison v. Bird: Testator executed a will naming plaintiff as the beneficiary. Testator directed lawyer to
destroy that will and send her the torn pieces. Plaintiff tried to admit a copy of the torn will to probate.
The court denied probate, holding that a rebuttable presumption existed, namely, that Testator revoked
her will because the pieces were not found. Plaintiff failed to rebut the presumption.
f) Lost or Destroyed Wills
i) If a will is (1) lost (2) destroyed without consent of the testator, or (3) destroyed with consent but not in
accordance with the revocation laws, the will can be admitted to probate
ii) The contents must be proved by clear and convincing evidence
iii) Proof can be in the form of copies with the lawyer, persons having knowledge of the will, persons who have
read the will, or persons who have heard the contents of the will
g) Attempted Revocation by Writing on Paper upon Which Will was Written (Common Law)
i) Written words used for revocation by cancellation of a will must be so placed as to physically affect the
written portion of the will and not merely the blank parts of the paper on which the will was written
ii) Thompson v. Royall: Testator typed a will on legal paper, but on the back of the paper, T revoked the will and
signed it. The writing did not touch the typed words. T kept the revoked will. The court held that this
attempted "cancellation" was an invalid revocation
h) Dependent Relative Revocation
i) Equitable doctrine that disregards a revocation if the court finds that the act of revocation was based on a
mistake of law or fact, and the revocation would not have occurred but for the testator's mistaken belief that
another disposition of property was valid. It must be shown that:
(1) At time of revocation, the testator intended to make a new testamentary disposition that was ineffective
(2) There was an otherwise valid revocation
(3) Testator's intent was premised on a mistaken belief as to the validity of the new disposition
(4) The invalidation of the revocation would be consistent with the testator's probable intent
ii) There is a presumption against intestacy, and the court will apply DRR to avoid intestacy
iii) The usual situation for application of DRR arises when a testator executes one will and thereafter attempts to
revoke it by making a new testamentary disposition that is ineffective for whatever reason
iv) DRR also applies where a testator revokes a later will under the mistaken belief that by doing so, it reinstates
a prior will
v) Carter v. First United: Will I was found at T's death with Will II, which was captioned as a will but not signed
(thus, ineffective) The 1963 will was altered with marks, and T told the lawyer that she wanted to changer
Will I but did not intend to revoke Will I. Will I was admitted to probate.
(1) Where two wills were found together at the time of decedent's death, the burden shifted to plaintiff to
prove that the testator wanted her property to pass intestate
(2) Presumption against intestacy arises in this situation
vi) Estate of Alburn: Will I executed in 1955; Will II executed in 1959. Testator told brother to get rid of Will II,
which T had torn up. T thought that by doing so, Will I would be reinstated. The revocation of Will II was
i) PA 2506 provides that if, after the making of any will, the testator shall execute a later will which expressly or
by necessary implication revokes the earlier will, the revocation of the later will shall not revive the earlier
(1) the revocation is in writing and declares the intention of the testator to revive the earlier will or
(2) after revocation, the earlier will is reexecuted
(3) Oral republication is insufficient
ii) UPC 2-509(a) provides that if a subsequent will wholly revoking a previous will is revoked, the previous will
remains revoked unless and until it is revived
(1) Facts and circumstances indicate revival of the first will
(2) Testator's contemporaneous or subsequent declarations indicating an intent to effectuate the first will
(3) Example: Will I is revoked by Will II. Testator burns Will II. Will I remains revoked until testator
revives Will I. In PA, testator would have to declare intention to revive Will I in writing or reexecute. In
a UPC jurisdiction, testator could simply say to witnesses that he intends to revive Will I, or other
circumstances that indicate Will I is revived.
j) Revocation by Operation of Law: Change in Family Circumstances
i) UPC 2-508 provides that changes in circumstances do not revoke any or all parts of a will
(1) At common law, a marriage following the execution of a will has no effect on the will. (Not followed in
(2) PA 2507(3) provides that if the testator marries after making a will, the surviving spouse shall receive an
intestate share unless the will gives the surviving spouse a greater share or unless it appear from the will
that the will was made in contemplation of marriage to the surviving spouse
(1) PA 2507(2) provides that if the testator is divorced from the bonds of matrimony after making a will, any
provision in favor of or relating to the divorced spouse shall be ineffective unless the testator intended
that the provision survive the divorce
(2) Survivorship Fails
(4) Spousal Elective Share is Exercised
3) COMPONENTS OF A WILL
i) The pages that constitute a will are those that are present at the time of execution and those that the testator
intends to be part of the will
ii) Staple and fasten the will together
i) Implied restatement or rewriting of the language of a valid will as of the time of republication. Requirements:
(1) Written, dated, and signed
(2) Testator had the intent to execute a codicil and
(3) The codicil adds to or alters an already existing will
ii) Republication changes the execution date of the will
c) Holographic codicil
i) Same requirements and
ii) Material parts are in testator's handwriting (Johnson)
iii) A valid holographic codicil can republish and validate a will that was inoperative because the will was not
signed, dated, or attested
d) Incorporation by Reference
i) UPC 2-510 provides that a writing in existence at the time the will is executed may be incorporate by
(1) The language of the will manifests this intent and
(2) The will describes the writing sufficiently to permit its identification
(a) If a reasonable person could identify the document, it would be sufficient
(b) Factors include
(ii) Title of referenced document
(iii) The location of the referenced document
ii) UPC 2-503(iii) substantial compliance could apply to the incorporation by reference doctrine
iii) UPC 2-513 provides that a testator may refer to a separate document disposing of tangible personal property
other than money
(1) The writing must be referred to in the will and
(a) signed by the testator
(b) containing a description of the property with reasonable certainty
(2) The document need not exist at the time the will is executed
iv) A notebook can be incorporated by reference
e) Acts of Independent Significance
i) UPC 2-512 provides that a will may dispose of property by reference to acts and events that have independent
significance apart from the effect on disposition
ii) Extrinsic evidence is permissible to identify the will beneficiaries and the property that will pass under the
iii) The acts can occur before or after execution of the will or before or after the testator's death
iv) Example: T gives A "the car she is driving at the time of her death." Before she died, T drove a Honda. Right
before T died, she bought a BMW. A gets the BMW, regardless of the increase in value of the gift. The will
referred to the "act" of giving the car she drove at the time of her death.
f) Clark v. Greenhalge
i) Memorandum with statements about disposition of property
ii) Throughout, testator communicated with nurses about a painting devised to Ginny ("I want Ginny to have it")
iii) Held: memorandum was incorporated by reference
iv) Testator's intent controls whether a document will be incorporated by reference when it meets the
requirements of the test
g) Simon v. Grayson: Testator executed a will on March 25 stating that a letter dated March 25 and to be found
among his things would be incorporated by reference into his will. (SECRET. . . ssshhhhh!!!) A codicil was
executed on Nov. 25. A letter was found, but it was dated July 3, not March 25. The court held that the letter was
incorporated by reference because it met the requirements (existed before Nov. 25, the new execution date, and
will permitted the letter to be found and identified)
h) Johnson v. Johnson: Testator, a lawyer, had a half-holographic, half-typewritten will that bequeathed $10 to his
i) Typewritten will was ineffective but had testamentary character
ii) The holographic will was valid, testamentary in character, and added to the will in existence
iii) The execution of the holographic will republished and validated the previous, invalid will
4) CONTRACTS RELATING TO WILLS
a) Types of Contracts Relating to Wills
i) Duplicate wills
(1) Wills that have been prepared in duplicate, meeting all requirements, so each will equals an original
instrument and may be separately probated
(2) Revocation of one revokes the other
ii) Mutual (Reciprocal) Wills
(1) Separate wills of two or more persons that contain reciprocal provisions
(2) Executed individually
iii) Joint wills
(1) One will executed by two or more parties as one testamentary instrument
iv) Joint and mutual wills
(1) Joint will (one will executed by two or more parties as one instrument)
(2) Reciprocal Provisions
(3) Devises property in accordance with a contract relating to the will
b) UPC 2-514 and PA 2701 provide that a contract relating to a will may be established only by
i) Provisions of a will stating the material provisions of the contract
ii) An express reference in a will to a contract and extrinsic evidence proving the terms of the contract or
iii) A writing signed by the decedent evidencing the contract
iv) The execution of a joint will or mutual wills does not create a presumption of a contract relating to wills
c) Contract remedies apply to contracts relating to wills
i) Specific performance
iii) Quantum meruit
iv) Constructive trusts
d) Contracts that are against public policy are void
i) Did the contract exist
(1) Express provisions in the will and
(2) Elements of contract law: Intent and (1) offer; (2) acceptance; (3) consideration
ii) What are the terms of the contract
iii) Were the terms breached
iv) What are the damages
f) Via v. Putnam: Third party beneficiaries (contract creditors) do not take priority over statutory rights of a
i) H and W had a mutual will stating that the survivor would do nothing to defeat the distribution set forth in
their will (i.e., children get what they get in the will). W dies, and H remarries W2. H dies and W2 gets her
share as pretermitted spouse, which decreased the amount of money that the kids received. Kids sued, and
argued that H breached the contract by marrying and defeating the distribution.
ii) Court says no: public policy states that H has a right to remarry, and contract creditors take second place to
WILL SUBSTITUTES: NON-PROBATE TRANSFERS
1) GENERALLY: Will substitutes are anything that transfers wealth outside of probate. The issues include:
a) Whether the will substitute is a purported testamentary disposition
b) Whether the law of will applies to non-probate transfers
c) Whether the will substitute can be affected by the provisions of a will
2) LIFETIME (INTERVIVOS) GIFT: The Elements:
a) Donative Intent
b) Actual or Constructive Delivery (constructive delivery means delivery made as nearly perfect and complete as the
type of property and circumstances will permit)
3) CONTRACTS WITH PAYABLE-ON-DEATH PROVISIONS
a) Life Insurance Policies:
i) If a life insurance policy requires written notice of change in beneficiary filed with the insurance company, the
beneficiary of a life insurance policy cannot be changed by a will
b) Nontestamentary Transfers at Death:
i) UPC 6-101 provides that written agreements to pay a beneficiary after death are non-testamentary and transfer
outside of probate
c) Purpose of Will Substitutes:
i) Will substitutes are designed to transfer property efficiently, economically, and quickly at death
i) Husband dies and left Wife with proceeds of life insurance policy. In the policy, Wife designated Brother as
primary beneficiary. Brother died before wife. Brother left everything to his son, and his son wants the
proceeds of the life insurance policy. When Wife died later, she left everything, including the proceeds, to her
(1) Wife cashed in the policy and received the benefits
(2) Wife had a separate agreement with the insurance company that differed from the policy terms
(3) Agreement between Wife and Brother was an invalid testamentary disposition
(4) Once brother died, she could do what she pleased with the proceeds
i) Husband had a partnership agreement stating that the proceeds would pass to his surviving spouse upon his
(1) A partnership agreement may provide that, upon the death of a partner, his surviving spouse is entitled to
his interest in the partnership
(2) Such a contract need not comply with the statute of wills
i) Husband had a life insurance policy in favor of Wife #1, whom he divorced. Husband’s will left the policy to
Wife #2 and son.
(1) HOLDING: After Husband died, Wife #1 was entitled to the benefits under the policy b/c Husband
didn’t follow the procedure needed to change the beneficiary.
(2) RULE: Substantial compliance w/ the requirements of an insurance policy is enough to change the
4) JOINT TENANCY AND MULTIPLE-PARTY BANK ACCOUNTS
a) Types Include
i) Joint Accounts
ii) Survivor Accounts
iii) Payable-on-Death Accounts
iv) Agency Accounts
v) Savings Account Trusts
b) A joint bank account goes to the remaining tenant through right of survivorship and passes outside the will (Pa. §
c) Franklin v. Anna:
i) Decedent had a joint bank account w/ Cora b/c he was losing his eyesight. After P began to care for him,
Decedent attempted to change the name on the bank account to replace Cora w/ P, but the bank never changed
it before he died.
ii) RULE: A joint bank account goes to the remaining tenant through right of survivorship and passes outside the
iii) HOLDING: B/c there was no donative intent to create a joint account w/ Cora, the joint tenancy agreement is
d) Stock Certificates Held in Joint Tenancy:
i) Blanchette v. Blanchette:
(1) Husband’s bought shares of stock which were issued in both of their names w/ rights of survivorship.
After they divorced, Wife petitioned to determine her interest in the stock.
(a) There was no intent to make a present gift of the stock to Wife
(b) Her rights only arose upon the death of Husband and were revocable by him.
e) Joint Tenancies in Land
i) Joint tenancy in land is a common method of transferring land upon death and avoiding probate.
ii) If one joint tenant dies, the survivor owns the property absolutely.
5) REVOCABLE INTERVIVOS TRUSTS
a) The settlor has the power to revoke, alter, or amend the trust and has the right to trust income during his lifetime
b) If no interests pass before death, then the trust is testamentary in nature
i) If the settlor retains too much power, the trust may be ruled illusory.
ii) The trust is not illusory if it creates some interests in some category of beneficiaries
iii) Farkas v. Williams: Farkas bought stock certificates as trustee for Williams. Farkas had some control over the
trusts and was entitled to the proceeds of the stock.
(1) A settlor/trustee may have some control over the property of a trust and not make the trust testamentary in
character such as to pass outside the will.
c) Revocation of Intervivos Trust
i) Pilafas: Revocable only by written instrument delivered to the trustee
ii) Revocation must be done in accordance with the terms of the trust
iii) Modern Law: Uniform Trust Act § 602(c) provides that if the settlor reserves the right to revoke but does not
provide the particular manner of revocation, any manner sufficiently manifesting the intention of the settlor to
revoke will suffice
d) Trust Assets and Third Party creditors
i) Settlor's creditors can reach assets of the trust if
(1) Assets were under control of the settlor at the time of his death
(2) Such that the settlor could have used the assets during his lifetime
e) Testamentary "Pour-Over" Into an Intervivos Trust
(1) Testator creates a trust, transferring probate assets to the trustee
(2) The will then devises the residual estate to trustee to hold as trustee under the terms of the trust
ii) UPC 2-511 permits this type of transfer
(1) There is no requirement that the trust be executed before or concurrently with the will
(2) This permits the trustee to execute the trust instrument after the will
(3) The trust can be funded with a res by the devise itself
iii) Clymer v. Mayo: Statute applies to a revocable Intervivos trust wholly funded after the decedent's death
f) Durable Power of Attorney
i) A durable power of attorney may be used to plan for incapacity
ii) A power of attorney that gives the agent sweeping power to dispose of the principal's property must be
iii) The principal may confer on an agent the authority to amend or revoke trusts without referring to the trusts by
name in the power of attorney
g) Disposition of Decedent's Body
i) Uniform Anatomical Gifts Act—allows a person to donate his body for research or transplantation
WILLS: INTERPRETATION OF WILLS
1) ADMISSION OF EXTRINSIC EVIDENCE
a) General Analysis
i) Determine whether the will is valid
ii) Determine whether the valid will is ambiguous
iii) If so, determine the type of ambiguity
iv) Finally, determine whether extrinsic evidence can be admitted
b) General Rules
i) Unambiguous: Generally, an unambiguous will is given its plain meaning.
ii) Latent Ambiguity: Language of the will is clear on its face but is susceptible to more than one meaning.
(1) Parol evidence is admissible to resolve the ambiguity
iii) Patent Ambiguity: Uncertainty appears on the face of the will.
(1) Common Law: Parol evidence is not admissible.
(2) Modern Law: Parol evidence is admissible.
iv) Extrinsic Evidence is also admissible to prove fraud, duress, and undue influence.
i) Extrinsic evidence allowed in cases of equivocation, where description fits two or more external objects
ii) Ex: Testator leaves his Jeep to his niece Alicia, but he has 2 nieces named Alicia
i) Mere false description of property or of the intended recipient may be stricken but does not make the whole
ii) Ex: Testator left Lot 3 in Square 406 to his brother, but he actually owned Lot 6 in Square 403. Court struck
the misdescribed provision and gave brother Lot 6 in Square 403.
e) Mahoney v. Grainger (1933)
i) T instructed her attorney to draft her will to leave her property to her cousins.
ii) T’s will read that her property goes to her “heirs at law,” which legally only included her aunt.
iii) HOLDING: Extrinsic evidence is not admissible to correct a drafter’s mistake when the language of the will
f) Fleming v. Morrison (1904)
i) Testator executed a sham will leaving property to a hottie to get her into bed
ii) Testator told his lawyer that the will was a sham.
iii) HOLDING: Evidence of a lack of testamentary intent to make a will was let in and the will was struck down
g) Estate of Russell (1968)
i) Testator left her estate to her friend, to “Roxy,” and to her niece, her sole heir at law.
ii) HOLDING: B/c the will is latently ambiguous, extrinsic evidence is allowed in to find out who Roxy is
iii) B/c Roxy is a dog, and one cannot leave property to a dog, the gift to Roxy lapses and goes to Testator’s heir,
h) Erickson v. Erickson (1998)
i) Testator’s will provided for D, his 2nd wife, but was executed before they got married.
ii) Under state law, a subsequent marriage acts as a revocation of the will if the will provides no contingency for
iii) HOLDING: Evidence of Testator’s intent and his relationship w/ D prior to marriage is sufficient to show
that the Testator intended the will to provide for the contingency of marriage.
iv) RATIONALE: Testator’s lawyer mistakenly led Testator to believe that the bequest to D would be valid if
the will was executed before he married her.
2) DEATH OF BENEFICIARY BEFORE DEATH OF TESTATOR: LAPSE
a) General Rules
i) Lapse: When the beneficiary predeceases the testator, the bequest will lapse.
ii) Anti-Lapse Statute: Allows issue of a devisee who predeceases the testator to take in the devisee’s place,
absent contrary evidence of the intent of the testator otherwise (UPC § 2-605).
b) Class Gift
i) Definition: Gift of an aggregate sum to a body of persons uncertain in number at time of gift.
ii) When one member of the class predeceases the testator, the remaining class members continue to share
equally in the gift.
iii) Testator must use words defining the class, such as heirs, nephews, or cousins, and cannot name the
individuals specifically otherwise.
c) Allen v. Talley (1997)
i) Testator gave her property under her will to her living siblings.
ii) At the time the will was executed, she had 5 living siblings; when she died, only 2 were left
iii) HOLDING: Under the terms of the will, survivorship was a requirement to take and Testators property is
split between her living siblings.
d) Jackson v. Schultz (1959)
i) P’s contracted w/ D to sell him Testator’s house but D claims P’s don’t own the house
ii) Testator’s will gives all property to stepmother and her heirs (P’s) but stepmother predeceased Testator.
iii) HOLDING: The word and can be substituted w/ the word or when it is consistent to carry out Testator’s
e) Dawson v. Yucas (1968)
i) Testator left farm land specifically to Wilson and Burtle, her nephews
ii) Burtle predeceased Testator and Wilson claims the farm land was a class gift and he should receive Burtle’s
iii) HOLDING: When specific individuals are named, a gift is not a class gift and there is no right of
survivorship for remaining individuals.
f) In re Moss (1899)
i) Testator left his property to his wife, then to his niece and to the children of his sister
ii) Niece died first, then Testator, and his property passed all to his wife.
iii) After his wife died, the property was split equally between the children of his sister as a class.
iv) The court treated the gift as a class gift and included the niece as a member of the class.
v) Under UPC § 2-605, the result would have been the nieces heirs would have stepped up and taken her share
(niece would have gotten ½ and the children of the sister would have gotten ½).
3) CHANGES IN PROPERTY AFTER EXECUTION OF WILL: SPECIFIC VS. GENERAL DEVISES
a) General vs. Specific Devises
i) General: Confers a general benefit and not a particular benefit.
(1) Ex: I leave Jennifer Lopez a legacy $10,000.
(2) If there isn’t $10,000 in the estate, assets are sold off to get the $.
ii) Specific: Confers a particular piece of property.
(1) Ex: I leave my red Jeep to George.
b) Ademption: When specific devises are sold, lost, destroyed by the time of the testator’s death, the gifts are deemed
i) Doctrine applies only to specific, not general, devises
ii) Ademption by Satisfaction: Inter vivos transfer of a gift during the testator’s lifetime after executing a will to
the same effect.
c) Wasserman v. Cohen (1993)
i) Testator gave a building in trust to P in her will but Testator sold the building prior to her death.
ii) HOLDING: The gift was a specific devise and is lost by the doctrine of ademption by extinction
d) Order of Abatement (PA § 3451): Where the estate does not have enough assets to pay off everyone:
i) Specific bequest to spouse.
ii) Specific bequest to issue.
iii) Specific bequest to others.
iv) General bequest of $, stock, bonds.
v) Residuary bequest.
vi) Any other property.
RESTRICTIONS ON THE POWER OF DISPOSITION: PROTECTION OF THE FAMILY
1) ANALYSIS FOR RIGHTS OF THE SURVIVING SPOUSE
a) Determine whether a legal marriage exists between the surviving spouse and the decedent
b) Determine the elective share
i) PA 2203 (1/3 share of certain property)
ii) UPC 2-202 (depends upon the # of years married)
c) Determine the Value of the Estate: What Property is Subject to Election
i) PA 2203(a)(1)-(6)
ii) UPC 2-202 (augmented estate: in other words, pretty much everything)
d) Determine whether the right to elect has been terminated
i) Waiver (i.e., prenuptial agreement: rebutted by showing fraud, undue influence, or misrepresentation)
iii) Surviving spouse fails to survive decedent
iv) Failure to elect within 6 months
v) Spouse dies after decedent but fails to elect
vi) Legal impediment to the marriage
vii) Forfeiture (slaying; willful neglect (PA Statute))
e) Determine the Process of Election
i) Spouse should elect if it is "in the best interests of the surviving spouse"
ii) Surviving spouse elects AND disclaims amount under the will
iii) Spouse gets paid first
2) RIGHTS OF THE SURVIVING SPOUSE
a) PA § 2202 Elective Share
i) Surviving spouse may elect 1/3 of estate property.
ii) Property subject to election:
(1) Property passing from decedent by will or intestacy.
(2) Property transferred during life if had use of at death.
(3) Property transferred during life to extent that decedent had right to revoke.
(4) Property at time of death that had time to transfer completely.
(5) Property conveyed w/in one year of death valued at > $3000.
iii) Property not subject to election
(1) Property transferred w/ consent of spouse.
(2) Proceeds of insurance.
(3) Pension and profit sharing.
(4) Property passing by decedent’s exercise of power of appointment.
b) UPC § 2-202 Elective Share
i) Size of share depends on how long the couple was married.
(1) After 15 years of marriage, share becomes 50%.
ii) Property subject to elections comes from decedent’s Augmented Estate
(1) All property that is decedent’s net probate estate, decedent’s nonprobate transfers to others, decedent’s
nonprobate transfers to surviving spouse, the surviving spouse’s property, and nonprobate transfers to
c) Waiver (UPC 2-213 & PA § 2207)
i) Surviving spouse’s elective share is subject to waiver.
d) In re Estate of Cross (1996)
i) Husband died intestate and left a surviving spouse who was 80 years old, incompetent, and lived in a nursing
ii) HOLDING: Court appointed an investigator to determine whether or not to elect against the decedent’s
iii) Investigator determined to elect b/c it was in the surviving spouse’s best interests.
e) In re Estate of Cooper (1993)
i) HOLDING: Surviving partners of a homosexual marriage are not recognized as spouses under existing law
and cannot elect to take a surviving spouse’s elective share.
f) Sullivan v. Burkin (1984)
i) Husband’s property included an inter vivos trust to which he alone retained the power to direct disposition of
the assets for his benefit, to revoke the trust, and he held a power of appointment over the trust.
ii) RULE: If the decedent has enough control over a trust during his lifetime, then the trust will be subject to his
surviving spouse’s elective share.
g) In re Reynolds (1996)
i) Testator relinquished almost all her assets into a trust over which she had the right appoint beneficiaries.
ii) HOLDING: Within the meaning of the elective share statute, Testator retained enough meaningful control
over the trust to include it in the property subject to a surviving spouse’s elective share.
h) In re Estate of Garbade (1995)
i) Wife signed a prenuptial agreement agreeing to nothing upon Husband’s death except a $100K life insurance
ii) HOLDING: Duly executed prenuptial agreement is a binding waiver in respect to a surviving spouse’s
iii) Party attacking a prenuptial agreement/waiver has the burden of proving it was the product of fraud,
misrepresentation, duress, or undue influence.
i) Pretermitted Spouse (UPC § 2-301 & PA § 2507(3))
i) Definition: testator marries after making a will and spouse is omitted from that particular will
ii) Pretermitted spouse omitted from will receives the share they would get had the decedent died intestate
iii) EXCEPTION: Does not apply if will provisions include a clause covering subsequent marriage
j) Estate of Shannon (1990)
i) Testator executed a will leaving everything to his daughter and disinherited everyone else.
ii) Testator then married but never changed his will before he died.
iii) HOLDING: Absent evidence to the contrary (that decedent intended to disinherit spouse), omitted spouse
shall receive a share of decedent’s estate.
3) RIGHTS OF ISSUE OMITTED FROM THE WILL
a) Pretermitted Child Statute (UPC § 2-302) (Purpose: parents, not the state, should care for their children)
i) Generally: A parent is free to disinherit a child.
ii) Child born after execution of will takes what share they would be entitled to had the decedent died intestate
unless there is a provision for the surviving parent of the child and the surviving parent takes "all or
substantially all" under the will
b) Azcunce v. Estate of Azcunze (1991)
i) Testator executed a will providing for his then-born children.
ii) Testator had another child, executed a codicil republishing the terms of the original will w/o providing
specifically for the new child, then died.
iii) HOLDING: B/c a codicil republishes the terms of the original will, the child is not a pretermitted child and
cannot take under the statute.
c) Espinosa v. Sparber (1993)
i) Lawyer was to draft a new codicil providing for an after-born child, but b/c of a dispute between Testator and
Lawyer, the new child was never provided for and the codicil republished the terms of the old will w/o
providing for the new child
ii) HOLDING: The estate, stepping into the shoes of the Testator, may maintain a legal malpractice claim
against Lawyer for any negligence involved in failing to follow Testator’s intent and provide for the new
d) In re Estate of Laura (1997)
i) Testator’s will disinherited everyone but one daughter and great-grandchildren born after the execution of the
will sued under the Pretermitted Child Statute.
ii) HOLDING: Testator who specifically names heirs in a will in an effort to disinherit them also references their
issue for purposes of disinherited them as well, thus bringing them outside the coverage of the Pretermitted
TRUSTS: CREATION, TYPES, AND CHARACTERISTICS
a) Generally: transfer of property from one to another to hold in trust for the benefit of a third party (O to A in trust
for the benefit of B)
i) Trustee owns the legal interest in the trust res
ii) Beneficiaries own the equitable interest in the trust res
b) The Settlor: creates the trust
i) Created during the settlor's lifetime is an intervivos trust
ii) Created by will is a testamentary trust
c) The Trustee
i) May be a third party, the settlor, or a beneficiary
ii) A trust never fails for want of a trustee (court will appoint a trustee)
iii) Trustee is held to a high standard of conduct in managing the trust property and must administer the trust
solely in the interest of the beneficiaries
(1) Trustee must not use the res for trustee's benefit
(2) Trustee must not commingle funds of trust with other funds
(3) Trustee must preserve property and make the property productive
(4) All doubts are resolved against the trustee in favor of the beneficiary
(5) Trustee has personal liability
d) The Beneficiaries: benefits from the trust
i) Holds equitable interests including equitable claims on the trust property itself
ii) Personal claim against the trustee for breach of trust
2) CREATION OF TRUSTS: THE TEST (1) Intent; (2) Property; (3) Beneficiaries
a) Intent (determined by the factual circumstances)
i) Settlor must manifest intent to create a trust
ii) Settlor need only express intent to convey to another for use or benefit to a third party
iii) No magic words are necessary to create a trust
iv) The following are not manifestations of intent to create trusts:
(1) Precatory Language: creates only a moral obligation is not enforceable at law (e.g., I wish A would do
this for B). Must be directive language (A will hold in trust for B)
(2) Equitable Charge: not a trust (e.g., testator devises property to a person provided that the person pay
money to another: O gives Blackacre to A provided that A pay B $400,000).
v) Jimenez v. Lee (1976)
(1) Grandmother made gift to D Father of $ to be used for P Daughter’s education.
(2) D put the $ in a bank account and then bought stock w/ the $.
(3) HOLDING: Grandmother created a trust for the benefit of P and D breached his fiduciary duty as trustee
by mismanaging the funds, not keeping a separate accounting, and not using the $ for educational
vi) Hebrew University Association v. Nye (1961)
(1) Ethel expressed her intent to give a library to the Hebrew University
(2) She gave the university a memorandum listing most of the important contents of the library and sent some
items to a warehouse for delivery
(3) Ethel died and her representative claimed ownership of the library. The University also claimed
ownership of the library
(4) RULE: If the donor of property intends to be trustee, she must show an intent to impose trustee duties
(5) RULE: Constructive delivery of a gift requires delivery as nearly perfect and complete as the type of
property and the circumstances will permit
(6) HOLDING: Ethel gave the university a gift under the theory of constructive delivery.
b) Necessity of Trust Property
i) A trust must have some kind of trust property
ii) Trust property is any transferable interest in property
(4) Contingent remainders
iii) Description of trust property must be sufficiently clear
iv) A writing that promises to make gifts in the future is not binding as a voluntary trust
(1) Gift is present transfer of property
(2) Trust is future transfer property
v) Expectancy cannot be trust property
vi) A gift, however, can be made of property that is not in existence at the time the gift is made
vii) Unthank v. Rippstein (1964)
(1) T wrote a letter to P promising to pay $200 per month
(2) HELD: Letter was not a trust because T only bound himself to make gifts in the future
viii) Brainard v. Commissioner (1937)
(1) B traded in trust for his children and assumed a fee of $10,000 at the end of the year
(2) The trust res was purported to be the income from the stock trading
(3) HELD: Trust could not be based on an interest that had not come into existence at the time the trust is
declared and in which no one had a present interest
ix) Speelman v. Pascal
(1) O gave A 3% of the profits from a movie not yet in existence
(2) HELD: a valid present gift can be made of property that is not in existence at the time the gift is made
c) Necessity of Trust Beneficiaries
i) A trust must have one or more beneficiaries
ii) General Rule: Beneficiaries must be definite and generally ascertainable (factual determination)
iii) Exceptions: Public trusts need not have definite and ascertainable beneficiaries
iv) A private trust to "friends" as beneficiaries is invalid for lack of definitiveness and ascertainability
v) Beneficiary can be an animal under an honorary trust so long as the conveyance does not violate the rule
vi) Clark v. Campbell
(1) Will of O gave books etc. to "friends" as trustee shall select
(2) HELD: A bequest to a trustee to distribute property to a trustee's "friends" is a private trust, not a public
(3) HELD: A private trust must have beneficiaries or a class of beneficiaries indicated so that they are
capable of coming into court and claiming the benefit. "Friends" could mean anybody
vii) In re Searight's Estate:
(1) O gave to A $1,000 to hold in trust for O's Dog to be used "as long as the dog lived" and at a rate of 75¢
(2) HELD: Honorary trust binds the conscience of the trustee and is lawful if the trustee is willing to carry
out the settlor's wishes
(3) Held: Conveyance did not violate the rule against perpetuities because the settlor provided a time limit:
the dog would die and the money would run out before the maximum period allowed under the rule
d) Necessity of Written Instruments to Create Trust
i) Oral intervivos trust in personal property is enforceable
ii) General Rule: Where the res of the trust is land, a written instrument is required to make the trust effective
iii) Exception: An oral intervivos trust in land is enforceable in equity
(1) Constructive trust will be imposed if
(a) Oral promise
(b) Confidential relationship between the transferee and transferor (factual determination) and
(c) Detrimental reliance on the promise
(2) Statute of frauds does not apply to constructive trusts because constructive trusts arise by operation of law
e) Oral Trust for Disposition at Death
i) Alternative I: Property devised in trust not defined in the will but communicated orally outside the will can be
proved by oral evidence
ii) Alternative II: Property devised in trust not defined in the will but communicated orally outside the will
cannot be proved by oral evidence
(1) Trust is not sufficiently defined by the will to take effect
(2) Equitable interest goes by way of resulting trust to the heirs as property of the deceased
iii) Oliffe v. Wells:
(1) Testator left residue of her estate to D to distribute in such a manner as in his discretion shall appear best
calculated to carry out the wishes that she had expressed to him or may express to him
(2) HELD: semisecret trust created cannot be proven by oral evidence: Resulting trust imposed
f) Failure of Trust
i) A trust will fail if its material purpose has been frustrated, the trust lacks beneficiaries, or the trust lacks trust
ii) A trust will never fail for lack of a trustee (court will appoint one)
iii) Resulting Trust: where a trust fails for want of beneficiary or want of trust res, a resulting trust arises by
operation of law and gives trust property to the settlor
iv) Constructive Trust: arises by operation of law where trustee must convey property to the wronged party. The
(1) Confidential relationship
(2) Transferee's express or implied promise
(3) Property was transferred in reliance on the promise and
(4) Transferee was unjustly enriched
3) HONORARY TRUST
a) Gift in which the donor intends to benefit a non-human, non-charitable purpose
b) Common Law: honorary trusts not recognized and failed—property reverted back to the settlor
c) Modern Law: Trustee may enforce the trust, but may only use the trust res for the designated purpose
4) DISCRETIONARY TRUSTS
a) Mandatory: trustee must distribute all the income
b) Discretionary: trustee has the discretion to distribute either the income or the principal or both
i) Trustee can have wide or limited discretion according to the conveyance
ii) If the trustee acts in good faith when deciding to distribute trust property, the beneficiary cannot compel
iii) Trustee has a duty to inquire into the financial resources of the beneficiary in order to recognize his needs
c) Court cannot compel the trustee to exercise discretion
d) If the trustee decides to distribute income or principal, the interests vests in the beneficiary and his creditors may
5) SECRET TRUST
a) Will does not indicate a trust
b) Decedent leaves a legacy to the beneficiary on the face of the instrument, without anything indicating intent to
create a trust, a promise to use the legacy for a specific reason would be enforceable by a constructive trust upon
c) Secret Trust is valid
6) SEMI-SECRET TRUST
a) Will indicates the intent to create a trust but does not identify the beneficiary
b) Semi-secret trust fails for lack of beneficiaries
c) Minority Rule: extrinsic evidence is admissible to prove the trust
7) CUSTODIAL TRUST: UNIFORM CUSTODIAL TRUST ACT
a) Where the settlor is the beneficiary
b) Beneficiary cannot be the trustee
c) Beneficiary instructs the trustee to manage property
d) Upon the incapacity of a beneficiary, the trustee must
i) Use trust res for the support of the beneficiary
ii) Use trust res for the support of the beneficiary's dependents
e) Once the beneficiary dies, the trust terminates that the res is distributed according to the beneficiary's written
8) SPENDTHRIFT TRUSTS
a) Defined (("ST" for short)
i) Beneficiary cannot voluntarily alienate his or her interest
ii) Interests are protected from creditors
iii) Exception: the duty of a husband to support his former wife overrides the restrictions of the spendthrift
iv) Shelley v. Shelley
(1) O created ST trust for his children by will
(2) O split but he owed alimony to former wives and
(3) HELD: wives could reach the corpus of the spendthrift trust
9) SUPPORT TRUST
a) Trustee is directed to make distributions as necessary for the education and maintenance of the beneficiary
b) Income and principal expended solely for that purpose
10) CREDITORS RIGHTS REGARDING TRUST PROPERTY
a) Creditors generally cannot reach the assets of a support or spendthrift trusts
b) Exceptions: Creditors that can Pierce the Veil of Spendthrift Provisions
i) Self-settled trust: ST trust cannot be set up by the settlor for the settlor's own benefit
ii) Child-support and alimony: judgments can be enforced against debtor's interest in ST trusts
iii) Furnishing necessary support: Persons who furnish the necessary support can reach the ST trust assets
iv) Tax Lien: US or a state can reach the interest to satisfy tax claims against the ST trust beneficiary
v) Excess over amount needed for support: creditors can reach the amount not needed for support (e.g., A needs
$40,000 per year for support but gets $50,000 per year, creditors can reach the balance: $10,000)
vi) Percentage Levy: applicable to wage earners: creditors can reach a percentage of the ST trust assets
vii) Tort Creditors: courts are split as to whether tort creditors can reach the assets of the ST trust
viii) United States v. O'Shaugnessy
(1) A is the beneficiary of 2 identical but separate trusts; have discretion to distribute assets during A's life
(2) Trust agreement gives A power of appointment exercisable only by last will and testament
(3) IRS assessed A for back taxes and tried to reach the trust assets
(4) HELD: IRS cannot reach assets of a discretionary trust before the trustee exercises discretion to distribute
11) POWER OF APPOINTMENT
a) General: Exercisable in favor of the person granted the power of appointment (donee)
b) Specific: Not exercisable in favor of the person granted the power of appointment (donee)
c) Powers of Appointment are broader than trusts
d) No fiduciary duties arise because holder of the power need not appoint the power
e) No fiduciary duty to act
12) MODIFICATION AND TERMINATION OF TRUSTS
a) Settlor Alive
i) If settlor and all beneficiaries agree, the trust can be terminated or modified
ii) Trustee cannot object
b) Settlor Dead
i) General Rule: trust cannot be terminated or modified if the termination or modification will defeat a material
purpose of the trust
(1) Consent by all beneficiaries
(2) No beneficiary must be legally disable and
(3) The termination or modification will not frustrate the material purpose of the trust
c) Other Methods
i) Merger: where legal and equitable title merge into one, there is no longer a trust
ii) Surrender: where no beneficiaries remain or a beneficiary dies
iii) Frustration of Material Purpose
iv) Natural Termination
v) Trust Purpose Becomes Illegal (i.e., Before prohibition years, O to A in trust for the benefit of B so long as B
uses it in a beer manufacturing capacity. When prohibition hits, the trust purpose has become illegal and thus
the trust terminates)
CONSTRUCTION OF TRUSTS: FUTURE INTERESTS
a) Present Estates
i) Whole: not subject to any conditions and expire naturally
(1) Fee Simple; Fee Tail; Life Estates; Life Estate pur autre vie
ii) Defeasible: may be cut off prematurely because of the happening of a condition
(1) Fee Simple Determinable (so long as)
(2) Fee Simple Subject to Condition Subsequent (but if)
b) Future Interests
i) Nonpossessory interest capable of becoming possessory in the future
(3) Possibility of Reverter
(4) Right of Reentry/Power of Termination
(5) Executory Interests
2) CLASSIFICATION OF FUTURE INTEREST
a) Grantor: A future interest in the grantor will always be either
i) Reversion: Future interest left in the grantor after he conveys an estate of less than a fee simple absolute
ii) Possibility of Reverter: Grantor’s interest when he conveys a fee simple determinable. If the some future
event occurs, the estate goes back to Grantor
iii) Right of Reentry/Power of Termination: Grantor’s interest when he conveys a fee simple subject to condition
subsequent and retains the power to cut short the estate upon the happening of the condition
b) Grantee: A future interest in the grantee will always be either
i) Remainders: remainders are either contingent or vested
(b) Unascertained or
(c) Subject to Condition Precedent
(b) Subject to Open or Partial Divestment
(c) Subject to Divestment
ii) Executory interests: interest other than remainders
3) CONSTRUCTION AND DRAFTING PROBLEMS
a) Preference for Vested Interests
i) Common Law Presumption: If an interest may be classified as vested or contingent, there is a preference to
classify it as vested
ii) Survival Requirement: If a person with a future interest in a remainder does not survive to take the interest,
the remainder passes into his estate, absent a requirement of survival by the testator
iii) In re Estate of Gilbert (1992)
(1) D renounced his interest due to religious reasons in a discretionary trust created by his father’s will.
(2) HOLDING: D, who had a interest in a contingent remainder, has a property interest that he may
renounce. The property is dispersed as if D predeceased his father
iv) First National Bank of Bar Harbor v. Anthony (1989)
(1) Testator created an inter vivos trust in favor of his wife, if she should survive him, and then in favor of his
(2) Wife and Son predeceased Testator and the trust was split between Testator’s 2 living children.
(3) HOLDING: B/c the trust was an inter vivos trust, Son’s interest vested at the time the trust was created;
b/c there was no requirement of survivorship for the children, Son’s interest is inheritable by his heirs.
v) Security Trust Co. v. Irvine (1953)
(1) Testator’s will created a trust for 2 of his sisters, Mary and Martha, during their life.
(2) Upon their death, the trust property would be split among all of his brothers and sisters.
(3) HOLDING ONE: The membership of Mary and Martha in a separate class as beneficiaries of the trust
during their lives does not prevent them from taking as members of the class of Testator’s siblings.
(4) HOLDING TWO: There is a preference for early vesting to be determined at the time of the Testator’s
death, and absent contrary evidence in the terms of the trust that the interest of a remainderman is to
divest, the interests of each sibling pass to their respective estates
b) Class Gifts
i) General Rules:
(1) Classes Defined: A gift made to two (2) or more people
(2) Absent evidence to the contrary, members of a class are joint tenants with the right of survivorship
(3) The term Children does not include grandchildren. The term Issue includes grandchildren and more
(4) General Rule: the identity of heirs entitled to trust assets is determined at the time of the death of the
(5) Exception: If the testator devises a trust for the life of one of his heirs, then to the life tenant’s heirs, the
identity of the heirs is determined at the date of death of the life tenant, not the testator
ii) Doctrine of Worthier Title
(1) O to A in trust for B’s life, then to O’s heirs.
(2) It is presumed that O intended to give himself a reversion, not a remainder in his heirs.
(3) Doctrine may be rebutted by evidence.
(4) UPC 2-710 abolishes the Doctrine
iii) The Rule in Shelley's Case:
(1) O to A in trust, then to A's Heirs
(2) Presumption that A gets a remainder in fee simple, not a fee simple in his heirs
(3) Abolished in nearly all states because it contravenes the grantor's intent
iv) Class-Closing Rule (Rule of Convenience)
(1) Class closes when any member of the class has the right to demand payment of their share
(2) Class does not close when members of the class actually demand payment or distribution occurs.
v) All or Nothing Rule
(1) Class gifts may be subject to the rule against perpetuities
(2) All interest in class gifts must vest during the perpetuities period
vi) Dewire v. Haveles (1989)
(1) Testator created a class gift to his grandchildren payable to his grandchildren equally upon the death of
his son and his son’s widow.
(2) ISSUE: Whether Testator’s great-granddaughter can step into her father’s shoes and take the gift?
(3) RULE: Absent evidence to the contrary, members of a class are joint tenants w/ the right of survivorship.
(4) HOLDING: Here, Testator’s will shows the contrary intent to treat all grandchildren equally; therefore,
great-granddaughter may take her father’s share
vii) Minary v. Citizens Fidelity Bank & Trust Co. (1967)
(1) Testamentary trust was created in favor of sons and their heirs.
(2) The last son to die had adopted his wife to bring her under the terms of the trust, who seeks to take the
rest of the trust assets.
(3) HOLDING: Although adult adoption were permitted in the state, Wife will not receive the trust assets
b/c that would bring under the coverage of a pre-existing testamentary trust which would defeat the clear
intent of the Testator
viii) Estate of Woodworth (1993)
(1) Testator created a trust for the life of Wife; After Wife’s death , the assets would go to Daughter if she
survived Wife, and then Sister’s heirs.
(2) Sister died, then her Husband, then Wife
(3) RULE ONE: Normally, the identity of heirs entitled to trust assets is determined at the time of the death
of the testator.
(4) RULE TWO: If the testator devises a trust for the life of one of his heirs, then to the life tenant’s heirs,
the identity of the heirs is determined at the date of death of the life tenant, not the testator.
(5) Here, when the life tenant died, there were no heirs, so the court went back and used the date of the death
of the Testator, and the assets passed into the Husband’s estate.
ix) Lux v. Lux (1972)
(1) Testator’s will left a trust for her grandchildren to share equally and any real property was not to be sold
until the youngest of the grandchildren reached age 21.
(2) Testator was survived by 1 son and 5 grandchildren.
(3) The youngest was born after the will was executed but before Testator died; Son informed the court of his
intention to have more children.
(4) HOLDING: The trust will close when the youngest living member of the class at the time of Testator’s
death turns 21.
DURATION OF TRUSTS: RULE AGAINST PERPETUITIES
1) RULE: No interest is valid unless it is certain to vest, if at all, not later than 21 years after some relevant life in being at
the creation of the Interest
a) Determine the Time the Interest was Created
b) Determine Whether the Rule Applies to the Interest
i) Does not apply to Present Estates (already vested)
(1) Reversions (2) Indefeasibly Vested Remainders (3) Alternate Contingent Remainders
ii) Applies to Future Interests
(1) Contingent Remainders
(2) Vested Remainders subject to open or partial divestment
(3) Executory Interests
c) Determine the Event that Must Occur Before the Interest is Vested
d) Determine the Perpetuities Period
i) Common Law: Relevant Life in Being + 21 Years
(1) Relevant life in being must be alive at the time the interest is created
(2) Relevant life in being must impact the vesting in some way
(3) Unborn Widow: cannot be a relevant life in being if not named
ii) Modern Law: UPC § 2-901(a)
(1) Does not follow the common law approach
(2) Interest must be certain to vest, if at all, in 90 years after the creation of the interest
e) Conclusion: If the interest is not certain to vest, if at all, during the perpetuities period, the interest is void at the
time the interest was created
3) PURPOSE OF THE RULE
a) To assure that contingent interests or other interests subject to the rule of perpetuities do not remain contingent
a) Intent to create charitable trust must be evident
b) Material purpose of charitable trust must be one of the following:
i) Relief of poverty
ii) Advancement of education
iii) Advancement of religion
iv) Promotion of Health
v) Government or Municipal Purpose or
vi) Other purposes that accomplish the end of benefiting the community
c) Beneficiaries need not be definite and ascertainable but must be specified in some way
d) Charitable trust need not comply with the Rule Against Perpetuities
e) Mere generosity or benevolence to the beneficiary is not enough
f) Case law:
i) O granted purported educational trust (charitable) to certain children in school would take effect before
Christmas and Easter.
ii) Court holds that it was not a charitable trust
a) A charitable trust can be modified if
i) The grantor evidenced a general intent to create a charitable trust and
ii) The material purpose of the trust has become
b) To determine the general and specific purposes of a charitable trust, look to the four corners of the conveyance
c) Under the Cy pres Doctrine, an individual has the power to petition the court to modify the trust
i) The trust will not fail
ii) Court can modify the trust to achieve another charitable purpose
d) Cy Pres Doctrine cannot be used simply because the trustee thinks another purpose f the trust would be more
e) In re Neher
i) Testator gave charitable trust to A to set up hospital in the memory of her late husband
ii) General Purpose: memorial for her husband; Specific Purpose: Hospital
iii) Court allowed a memorial hall to be built rather than a hospital, since the city had several hospitals already
iv) Court has great discretion
a) The grantor or donor cannot enforce the restriction in the charitable trust unless the conveyance expressly reserves
this right in the donor
b) Otherwise, only the Attorney General of the State, as representative of the public at large, can enforce the
provisions of the trust
TRUST ADMINISTRATION: DUTIES, POWERS, AND LIABILITY OF THE TRUSTEE
1) DUTIES OF THE TRUSTEE
a) General Duty of Loyalty
i) Trustee has a duty of undivided loyalty to he beneficiaries
i) Must administer the trust solely in the interest of the beneficiaries
ii) Per se Rule: There shall be no self-dealing whatsoever
(1) Even if self-dealing is in good faith and fair, the Court need not inquire further after self-dealing is shown
(2) Automatic violation of the duty of loyalty
iii) Trustee cannot accept employment opportunities that conflict with trustee duties
ii) Hartman v. Hartle:
(1) O conveys Blackacre to A in trust.
(2) A purchases Blackacre and sells to wife for profit
(3) HOLDING: No further inquiry into whether deal was fair or done in good faith: NO SELF DEALING
(1) 3 trustees disposed of paintings
(2) Trustee A knew that B and C were self-dealing
(3) B was the president where the paintings were sold and got 50% commission (where the normal rate is
(4) C was an artist that got a deal because of the sale
(5) HOLDING: A has affirmative duties to prevent violations of the duty of loyalty; B and C were self-
(6) Trustee held liable for damages to son and daughter of artist
c) Duty not to Delegate Trustee Duties
i) Trustee is under a duty to the beneficiary not to delegate to others the doing of acts which the trustee can
reasonably be required personally to perforce
ii) Policy: Trustee is someone settlor trusts; therefore, should not be changed
iii) Modern Law: Nondelegation abrogated—trustee has a duty to exercise reasonable care, caution, and skill
when selecting agents to carry out trustee duties
(1) Trustee delegated duties to A and A embezzled $300,000
(2) Held: Trustee cannot delegate duties; trustee is personally liable
d) Duty of Impartiality
i) Trustee has the duty to deal with the income beneficiary and the remainderperson impartially
ii) Trust res must produce reasonable income for distribution to the income life beneficiary
iii) The principal is ultimately distributed to the remainderperson
iv) Dennis v. RI Hosp. Trust Co.: Trustee has proactive duties including market analysis to determine best
b) Duty to Inform and Account to Beneficiary
i) Jiminez, supra: duty to account and duty not to commingle funds
ii) Nat'l Academy
(1) O to A in trust for wife so long as Wife remained unmarried and gave nothing to family; if so, then to
Nat'l Research Academy
(2) Wife remarried and periodically sent brother checks from trust fund
(3) Even though they didn't inquire, A told Nat'l Research that Wife was complying with the trust
(4) HELD: trustee has a duty to inquire and inform remainderperson about the breach of trust agreement
c) Personal Liability for Violating Trustee Duties
i) A trustee has personal liability for violating trust duties
2) POWERS OF THE TRUSTEE
a) Spelled out specifically in the conveyance
b) Trustee can exercise only those powers
3) TRUSTEE AND INVESTMENT OF TRUST FUNDS
a) Trustees should diversify investments
b) Trustees should not invest in second mortgages
c) Trustee should investigate any investment
d) Estate of Collins
i) Testamentary Trust: O to A in trust for O's Daughter at $4000/year
ii) A, a lawyer, gave $50k in trust funds to another client as a secured loan
iii) HELD: self-dealing, violation of all three rules above