ESTATES _ TRUSTS

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					                                      ESTATES & TRUSTS

The Power to Transfer Property at Death
-Ability to transfer: the ability to transfer property at death is one of the bundle of rights included
in the concept of private property
-The transfer of property is a right granted by the state, can be taken away or regulated
        -constitutional limitations, however, limit the govt from enacting a complete prohibition
        on the passing of land by will or intestate succession-to do so would violate the Just
        Compensation Clause of the Fifth Amendment (a taking of prop w/out compensation)
-The decedents assets at death can be divided into probate and nonprobate property
        Nonprobate- prop passing under an instrument other than a will which became effective
        before death, including
                 -joint tenancy property (where decedents prop vanishes at death)
                 -life insurance (where proceeds of a policy are paid by ins co to named benif)
                 -contracts w/ payable on death provisions (pension plans, investment plans)
                 -revocable or irrevocable trusts (trustee holds prop for benefit of named benif)
        -distribution of nonprobate prop does not involve ct proceedings- distribution is made in
        accordance with the terms of a contract or trust or deed
        -adv is to avoid probate
        Probate- prop that passes under the decedents will or by intestacy
        -distribution of probate assets may require ct proceedings involving probate of a will or a
        finding of intestacy
        -probate provides evidence of transfer of title to new owners, protects creditors by
        requiring payment of debts, and distributes decedents prop to those intended after
        creditors are paid
        -when probate is necessary, must appoint a personal representative to settle the prob
        estate; if will names representative, he/she is referred to as executor of estate; if will fails
        to name rep or decedent dies intestate, he/she is referred to as administrator (appointed by
        ct from a statutory list- spouse, children, parents, siblings, creditors)
        -contesting wills- only those inds with a direct pecuniary interest can contest a will
        -creditors may file claims against a will but only within a specified pd of time; a one year
        statute of limitations is constitutional even without notice
        -probate is very exp and very time consuming
Distinctions between Real and Personal Property
        -a person dying testate devises real property to devises and bequeaths personal prop to
        legatees (the UPC and Restatement make no distinction between real and personal
        property- for UPC all transfers referred to as devise; for Restatement either devise,
        bequeath or give)
Testation- the act of writing a will
Freedom of Testation -donor has right to transfer property at death
        -testamentary freedom limited by estate taxing, transfers that are designated to circumvent
        taxation, statutes such as pension plans which designate beneficiaries, also limited by
        rules against perpetuities


                                                  -1-
                                   INTESTATE SUCCESSION
Intestate Succession- ind dies w/out will or will does not cover all decedents prop
       - passing of assets governed by statutes of descent and distribution (real prop descends to
       heirs/ personal prop is distributed to next of kin)if there is no taker, assets escheat to state
       -ind’s receiving real prop under intestacy traditionally referred to as heirs; no real
       distinction anymore between heirs or next of kin
       -surviving spouse’s are now referred to as heirs- under current law, surviving spouse
       takes ½ share if only one child or issue of one child survives, and a 1/3 share if more than
       one child or one child and issue of a deceased child survive
       -under all intestacy statutes, parents are not referred to as heirs if decedent leaves a child
       -intestacy statutes are fairly mechanical and generally establish an order of preference
       among named relatives (usually surviving spouse, children, parents, brothers/sisters and
       their lineal descendants, grandparents and their lineal descendants, next of kin, escheat to
       state– see UPC)
       -under the 1990 UPC- the surviving spouse takes 100% unless decedent is survived by
       parent, or decedent or surviving spouse has child that does not belong to other-adopted by
       only 10 states; other states have adopted in part
       -if there is no descendant, most states and UPC provide that the spouse shares with the
       decedents parents
       -in a few states, statutes disqualify a spouse if the spouse refused to support or abandoned
       the decedent
Shares of Descendants
       -after spouses share is set aside, children and issue of deceased children take remainder of
       the prop to the exclusion of everyone else
       -Taking by Representation- all states provide that if one of several children predecease
       the decedent leaving descendants, that child’s descendants shall represent the dead child
       and divide child’s share among themselves
                                            A(decedent)

                                  B        C       D (decedent’s children) =if all living, each takes 1/3

                                  E      F G       H I (children’s issue)
                         (survivors are underlined; all others are dead)
       -C’s children take C’s share by representation of their dead parent; A’s heirs are B (1/3), D(1/3), F (1/6) and
       G (1/6) -E,H, and I take nothing bec their parents are living
       -if B,C, and D predecease A, all children’s’s issue take by representation so E (1/3), F,G,,H and I take 1/6
       -Taking per Stirpes- always allocate at first generation closest to decedent, then taking
       by representation (ex above)= only diff between trad and modern per stirpes is where the
       first allocation of property is made (modern per stirpes also referred to as per capita at each
       generation)
       -Taking Per Capita- under the modern system, if B,C, and D predecease A, then all
       shares are divided equally between grandchildren= E,F,G,H,and I each take 1/6- this
       system makes first allocation at generation that is alive (modern)
       -Per Capita by Representation- first allocation is determine by first generation of
       descendants alive, and then taking by representation- so if B and C die, first allocation is

                                                        -2-
       first generation to D, then second allocation is by representation of B and C
       -Per Capita at Each Generation- if B and C die but D survives, D takes 1/3, and
       remaining 2/3 is divided equally amongst B and C’s children (UPC uses this system-
       UPC does not allow taking by representation)-if B,C, and D predecease A, then E,F,G,H
       and I all take equally 1/6- also referred to as modern per stirpes-adopted by most states-
       allocation begins at first level where descendants are alive
Interpreting Private Instrument under Intestacy
       -if decedent has will but does not ascertain definite takers, such as “to my wife, remainder
       to my next of kin” or “to A for life and then to A’s heirs” distribution is usually
       determined by intestacy statute of descent and distribution
       1. Always first look to testator’s intent
                ex: if words “share and share alike” are used, usually interpreted to mean testator
                intended for all to receive equal shares-
       2. Apply Rules of Construction
                -most states apply a modern per stirpes rule of construction, especially if there are
                diff generations; however if testator uses language “to A’s issue per stirpes”, Rest.
                use traditional per stirpes
                -Illinois allocates at first generation
Disinheritance and Partial Intestacy
       -if testator has will that does not cover all prop and will contains a provision that X takes
       nothing, that provision is not given effect to testators remaining prop that passes under
       intestacy
       Relatives of Decedent
       Descending Line- children, grandchildren; known as descendants or issues
       Ascending Line- parents, grandparents; known as ascendants
       Collateral Kindred- all blood relatives to deceased but who are not descendants will take
       if deceased has no descendants or parents; collaterals are those that share a common
       ancestor with decedent; for ex brother/sister- common ancestors are parents
       Parentellic System- does not involve the computation of degrees; rather all descendants
       of the nearest closest ancestor are preferred over descendants of more remote ancestors
       if deceased has no first line collaterals, then intestate estate passes to parents and their
       descendants, then to grandparents and their descendants, then passes to great
       grandparents and their descendants
                -UPC does not pass beyond descendants of the grandparents- cuts off remote heirs
                usually referred to as “laughing heirs”
                -Some states expand vesting in heirs, even to in-laws, in order to stop prop from
                escheating to the state
       *If deceased has no surviving spouse or descendants, statutes usually distribute to closest
       collateral kin determine by Degree of Relationship System
                -method of counting by degrees; ancestor of closest degree takes prop; if more
                than one ancestor at same degree, then estate is divided
                -count from decedent up to the common ancestor and then the count the
                generations from that common ancestor down to the claimant


                                                 -3-
              ex: degree of relationship between decedent and first cousin is “relationship in the
              fourth degree”- two generations from decedent to common ancestor grandparent
              and another two generations from grandparent down to the first cousin
      Echeat- every statute provides that if no next of kin can be found, the intestate estate
      passes to the state
Transfers to Children
      -adopted children, biological children, nonmarital children, and children from
      reproductive technology are all considered issue
      Adopted Children do not inherit from natural parents once natural parents are terminated
              (prevents dual inheritance); no right to inherit through natural parent by way of
              representation; adopted children also do not inherit from natural parents relatives
              (see Hall v. Vallandingham- ct held adopted child can not inherit from nat.
              father’s brother- adoption cuts off all inheritance rights)
              -UPC = adoption of a child by spouse of natural parent does not effect that child’s
              inheritance; most states allow this
              -most states do not draw distinction between adopting a child or an adult
              -right of adopted children to take by intestacy is governed by statute; all states
              permit an adopted child to inherit from adoptive parents for purposes of intestacy
      Illegitimate or NonMarital Children- all states abolished cl rule that nonmarital child has
              no right to inherit from either parent-
              -all states allow nonmarital child to inherit from mother, usually child is only
              allowed to inherit from father if father legitimated child by marrying child’s
              mother or acknowledged child -
              -Constitutional limitations- state may not completely bar illegitimate child’s from
              inheriting from their parents through intestate succession- violates the EPC bec
              marital and nonmarital children are treated differently- although state may have a
              compelling state interest in protecting family goals and creating traditional family
              relationships, cutting off nonmarital child’s rights is not narrowly tailored-no
              reason to allow a child to suffer bec parents didn’t get married (see Tremble)
              however, state may impose procedural rules for proving paternity- see Lali v. Lali-
              Sup Ct upheld NY statute that prevented illegitimate children from inheriting by
              intestacy unless a ct made a finding of paternity during the father’s lifetime- not
              enough for father to acknowledge child
              -many states have enacted similar statutes; some allow paternity testing to be
              conducted after nat fathers death under a clear and convincing std by exhuming
              the body and perform dna testing-
              -UPC does not make distinction between marital and nonmarital children- a
              person is the child or his/her parents regardless of marital status
      Unusual Family Relationships-
              -adoption by same sex partners- some states do not allow this bec. child would
              have two legal mothers or fathers
              -in vitro fertilization- cts differ as to who the legal mother is= the mother who
              produced the egg v. the mother who carried the egg/embryo in her uterus


                                               -4-
                -frozen sperm= ct gives frozen sperm special status- considers it prop due to the
                potential to create a human life
       Class Gifts to Children
                -traditional cl rule was that class gift to issue meant marital children only
                may violate epc- state action bec ct enforces presumption, but prevailing trend is
                that ct is merely enforcing testators intent so no state action; merely private
                discrimination against testators own children
                -new presumption is that class gift pertains to marital and nonmarital children
                -UPC looks to whether nat parent treated the child as his/her own- agency concept
       Advancements= gifts made by an intestate during his life to a relative, with the intent that
                it be applied against any share in the intestate’s estate to which the recipient may
                later be entitled
                -any child wishing to share in the intestate distribution of a deceased parent’s
                estate must permit the administrator to include in the determination of the
                distributive shares the value of any property that the decedent, while living, gave
                the child by way of an advancement
                -at cl, any gift to a child was treated as an advancement
                -modern rule, a gift is not an advancement unless it is declared as such in a
                writing signed by grantor or grantee or child acknowledges that the gift is an
                advancement
Bars to Intestate Succession
       -most states have enacted statute that prohibits a person who intentionally kills the
       decedent from inheriting from the deceased; usually referred to as slayer statutes-treats
       slayer as predeceasing the deceased
       -all states bar a convicted murderer from inheriting
       -some states allow murderer to inherit but only in form of a constructive trust
       -some states draw line between invol and vol manslaughter- if it is not clear from record
       whether crim ct found invol or vol manslaughter, ct of equity will relitigate the offense-no
       violation of double jeopardy since this is a civil proceeding
Renunciation or Disclaimer and Intestacy
       -traditional view is that heir has no ability to renounce assets that pass under intestacy
       (unlike gifts made intervivos or by will where the recipient cannot be forced to accept it);
       the reason why is that it deprives the heir of the ability to avoid creditors, or estate taxes,
       or renouncing in favor of someone else
       -modern view now allows heirs to renounce and thereby defeat claims of creditors; prop
       passes as if the heir predeceased the decedent; also heir disclaiming gift is not liable for
       gift taxes, as in wills, title never goes to disclaimant, passes to next taker
       -D has two children A and B, B predeceases D leaving one child, A disclaims his interest
       and has three children, D’s Child takes ½ and A’s three children each take 1/6- A’s
       children only receive amt that A disclaimed
Disclaimers in General
       Why disclaim- to avoid taxes, ensure that others will get prop if disclaimant doesn’t need
       it; to avoid creditors since creditor can place a lien on prop


                                                 -5-
       -disclaimer may be considered a transfer of property; although disclaimer does not name
       the taker, it is still considered a transfer bec one is altering the course of prop, but usually
       the disclaimant is treated as predeceasing the deceased - disclaimant has no prop interests
       especially in a will bec gifts in a will are merely considered “expectancies” until that the
       person dies




                                              WILLS
Generally
       -a will is a legal declaration of one’s intentions to dispose of his prop after death
       -all states have statutes enabling persons to make will and prescribe formalities for
       executing wills derived from English Statue of Wills and the Statute of Frauds
       -a will is not valid w/out statutory compliance
       - a valid will requires a competent testator, physical compliance with the requirements of
       the statute, and testators intent that the instrument be a will
       -fraud and undue influence generally render a will invalid- mistake may also affect
       validity of a will
       -primary goal is to effectuate the true desires of the testator
       -probate ct is used to determine the validity of a will, and how to distribute the will
       -the proponent of a will offers will for probate; presumption exists in favor that will is
       valid; opponent has burden to show that will is not valid
Definitions and Terms of a Will
       -every will is ambulatory- it may be revoked or changed at any moment before death by a
       competent testator; take no effect until testator dies
       -one who dies leaving a will is referred to as the testator- he/she dies testate
       -a devise is a gift in a will of land
       -a bequest is a gift in a will of personal property
       -a legacy is a gift in a will of money
       -the personal representative is the person authorized by the ct to administer the state- if
       named in will, referred to as executor, if not named, referred to as administrator
Execution of a Will
       -formalities of transfer serve three functions= ritual, evidentiary and protective
       -wills may be classified as written and witnessed, holographic, or nuncupative (oral)
       -the authenticity of a written and witnessed will is vouched by the witnesses
       -the authenticity of a holographic will is evidenced by the testator’s handwriting
       -all states permit written and witnessed wills; holographic wills are valid in half the states
       but must be in testators handwriting to be valid
       -formalities for each type of will are regulated by state statute
Written and Witnessed Wills
        -require a writing, signing, publication, witnessing or attestation, and presence
       -an attempt to make a will coupled with the intent to do so will not make a will valid
       unless the terms of the statute are fulfilled

                                                 -6-
-state statutes are usually governed by a provision in the statute of frauds which required
any bequests to be in a writing signed by the testator or by some other person in his
presence and by his express direction and shall be attested and subscribed in the presence
of three or four credible witnesses otherwise such bequests are void and are given no
effect
-the writing must be legible
- a valid signature may consist of any mark, such as an x, check mark, or a name intended
by a competent testator to constitute his signature as authenticating his will; the signature
of the testator may be affixed by himself or by another person in testators presence and at
his discretion
-the placement of the signature may appear any place on the will, but if the statute
requires it to be “subscribed” or “at the end thereof”, it must be preceded by the contents
of the will; also applies to the signature of the witnesses
-the order of signing between testator and witnesses is unimportant if all sign as part of a
single transaction- most jurisdictions hold that it is sufficient if the testator signs before or
after the witnesses in their absence only if he acknowledges signature to them- a valid
acknowledgment is when testator takes his will, already signed, to a witness and shows
him the signature stating that it his or that this is his will (see In re Groffman where ct
invalidated a will bec testator did not acknowledge his signature properly even though
judge found that testator intended everything in the will
-some states hold that testator must sign in the presence of the witnesses or witnesses
must sign in the presence of testator -usually means in the “line of vision” of the testator
or witnesses–does not mean that one sees the other sign, but rather that one could have
seen it; presence is presumed if all parties are in the same room
-presence is required so that witnesses can attest to testators competency
-“conscious presence test”- if the events occur w/in any of the senses of the testator and
the testator comprehends that the witness is in the act of signing- presence is satisfied
-UPC dispenses with the requirement of presence
-UPC, Witnessing Requirements are different than CL
-witnesses do not have to be in presence of testator when signing, must only sign the will
w/in a reasonable time after testator signs, acknowledges his signature, or acknowledges
that it is his will (remember CL where witnesses and testator should sign in a single
transaction, or at least that witnesses/ testator are in line of sight or conscious presence
while other is signing or acknowledges signature)
-so under UPC if testator and one witness sign on tues, second witness may take the will
with her to work and sign on wed- this is valid since it is within a reasonable time
Witnessing or Attestation-
-all statutes require 2 or 3 witnesses to the will; usually required to sign and attest
-no jurisdiction requires the witnesses to know the contents of the will, but some juris
requires testator to publish his will by declaring to the witnesses that the instrument is his
will
-attestation is the state of mind by which the witness intends to bear witness to the
performance of the acts required by the statute to validate the will


                                          -7-
      -signing is merely the physical act of the witness in putting his hand to paper
      -witnessing requirements consist of dual acts of observation and signature-both must
      occur for will to be valid- serves evidentiary purposes; prevents fraud
      -no state statute requires the use of an attestation clause, however this clause is very imp
      especially when witnesses have predeceased the testator and are not able to testify;
      usually an attestation clause is prima facie evidence that will was duly executed;
      attestation clause is usually at end of will and consists of a certificate signed by witnesses
      to a will reciting performance of formalities of execution which the witness observed-that
      the foregoing things were done, that testator duly executed will, and witnesses
      acknowledge this to be his will -
      -witnesses must be competent
      -in most states, any witness having a pecuniary interest in the will could not be an
      attesting witness- at cl, the will was considered invalid; some states allow a beneficiary
      under a will to also be a witness
      -states have enacted purging statutes which eliminate the interest of a
      witness/beneficiary in order to keep the will valid and so they may testify; avoids fraud -
      once purging statute is applied, witness/beneficiary loses their gift so they may not
      disclaim (see Estate of Parsons)
      -under UPC, no purging statute so interested witnesses are not purged of their interest
      -a witness must sign with the intent to validate the testator’s act
      Self Proving Affidavit- clause at end of will, swearing that the will has been duly
      executed; testator and witnesses sign the clause before a notary public, who in turns signs
      and attaches the required seal- very imp if witnesses are unable to testify (dead, can’t be
      located), will is valid without the affidavit but makes it much easier to probate the will
      UPC recognizes two forms of self proving affidavits: 1- combined attestation clause and
      self proving affidavit so that the testator and witnesses only sign once 2- self proving
      affidavit attached after a will is signed and attested, affidavit must be signed by witnesses
      and testator before a notary public (most states only allow the 2nd method)
      What if witnesses sign an affidavit but do not sign the attestation clause or the will- some
      states hold that will is invalid; others hold that although the will does not comply with the
      requirements of the statute, the will may be valid if the witnesses intended and believed
      that their signatures on the affidavit clause were attesting to the will
      In re Will of Ranney- witnesses signed affidavit that was attached to will but did not sign
      the will itself- ct held that although will did not meet formal requirements, proponents of
      the will should be allowed to prove by clear and convincing evidence that the will
      substantially complied with statutory requirements; ct remanded to trial ct to determine
      whether witnesses intended to attest the will by signing the self affidavit; if so, will may
      be allowed to probate
Curative Doctrines
      Doctrine of Substantial Compliance-
      -rule designed to cure the inequity caused by the harsh and relentless formalism of the law
      of wills- finding of a formal defect should not automatically render a will invalid; ct
      should inquire into whether the noncomplying document expresses the testators intent,


                                                -8-
       whether its from sufficiently approximates Wills Act formality to enable the ct to
       conclude that it serves the purposes of the Act (applied in Ranney case)
       -if a will has a formal defect but substantially complies with all other requirements, it
       should not be considered invalid; to hold the will is invalid would frustrate rather than
       further the purposes of the formalities

       UPC -reduced the number of formalities required for a will
       -requires that the will be written, signed by testator and witnessed by two persons who
       sign- if the will does not comply with all formal requirements, the document may be
       treated as a will if there is “clear and convincing evidence” that the decedent intended the
       document to be his will (similar to substantial compliance)

       Dispensing Power- UPC 1990 revised code added a provision allowing a probate ct to
       use “dispensing power” to excuse a harmless error in complying with the formal
       requirements for executing or revoking a will

Holographic Wills (handwritten will)
      -allowed in about ½ the states
      –must be in testator’s handwriting
      -usually holographic wills are not witnesses; attesting witnesses not required
      -traditional cl rule required the entire document to be handwritten in order to be valid;
      some states still require this
      -modern view holds that the material parts must be handwritten; usually the portion not in
      the testators handwriting is disregarded, will valid only if testator’s intent is clear after
      severing the non-handwritten part
      -modern view also allows changes to a holographic will after signed as long as they are in
      testator’s handwriting
      UPC- a will is valid as a holographic will, whether witnessed or not, if the signature and
      material portions are in the testators handwriting (see In re Estate of Johnson- where ct
      held holographic will was invalid-testator used preprinted will and filled in blanks in his
      own handwriting; when ct disregarded the non-handwritten portions, will did not convey
      testators intent and material portions were in preprinted form, not testators handwriting)
      -some states require the holographic will to be dated; this requirement is useful if testator
      writes two wills, the later dated will prevails
      -in almost all states permitting holographic wills, signature may be at end, beginning, or
      anywhere on the will, but if not signed at bottom, there may be doubt whether testator
      intended his name to be a signature
      -holographic wills serve no ritual function (no formality) nor do they serve protective
      function; however, serve evidentiary function (large sample of testator’s handwriting)
      -what if writing is in the form of a letter to someone- ct must determine testator intended
      letter to be his will; look to the language in the letter (see Kimmel’s Estate- ct held letter
      constituted valid holographic will; testator intended letter to be will; furthermore although
      testator signed “your father” this was o.k.)


                                                -9-
Republication of A Will
       A. Republication is a term used to describe:
       1. The revival of a will, instrument or codicil of a valid will that has been revoked but not
       physically destroyed
       2. The reaffirmance by codicil of a valid will for the purpose of making the will speak as
       the date of the codicil
       3. The restoration of a will by revocation of a subsequent will that had revoked the first
       will
       4. The validation of a prior invalid will (only really applied by using doctrine of
       incorporation of reference - invalid will revived by valid codicil; subsequent instrument
       incorporates by reference the invalid will)
       B. CL rule- some cts follow cl rule that revocation of a revoking will automatically
       revives the first will, regardless of the testators intentions
       C-Modern Rule-Other cts follow the rule which makes revival dependant upon the
       testators intentions- under this approach parol evidence is admissible to establish intent
       -Others have enacted statutes to address the issue; ex: some states allow revival only if
       the first will is reexecuted or if a codicil is executed showing an intent to revive
       D. UPC- a revoked will may be revived if it is evident from the circumstances of the
       revocation of the subsequent will or codicil or from the testators contemporary or
       subsequent declarations that the testator intended the previous will to take effect as
       executed- if not evident then revoked will stays revoked
       E- a subsequent instrument generally cannot revive a will that was never valid, however
       some juris justify such revivals by using the doctrine of incorporation by reference of the
       first will into the subsequent instrument
Codicil
       -a codicil generally means a little will
       -a codicil usually is executed to bring about a change in the will w/out the necessity of re-
       executing the will in its entirety
       -generally revoke, modify, alter or republish a will
       -a codicil must be executed with the same formalities as any other will
       -a codicil makes specific references to the will, identifies it by its date of execution and
       states the change to be effected by it
       -generally a codicil will not republish an otherwise invalid will; some jurisdictions will
       get around this rule by applying the doctrine of incorporation by reference of the invalid
       will into the subsequent codicil
Revocation of a Will
       1. Revocation by a subsequent written instrument- three forms
                a. Later Dated Will
                         -must have intent to revoke old will; should use language that this will
                         revokes all prior wills
                         -if new will doesn’t state that it revokes all prior wills, most cts will try to
                         reconcile the two documents and any inconsistencies are resolved in favor
                         of the later dated will


                                                  -10-
                          ex. Will 1- All my prop to X, Y is executor
                               Will 2- 1000 to A, 1000 to B, C is executor
                          Ct will interpret will 2 as a codicil since no language that will 2
                          revokes will 1, 1000 to A, 1000 to B, residuary to X, executor is C
                 -UPC does not reconcile the two documents- presumes the first will is
                 revoked by the latter dated will
         b. A Codicil- instrument that is executed for purpose of amending a prior will
         c. A writing whose only purpose is to revoke a will
-all three must be in accord with the statute
2. Revocation by Physical Act
         a. Tear up, burn, or cut up will with intent to revoke; must be done by testator or
         testator’s atty in the presence of testator
         b. Usually physical act of writing that the will is revoked is only valid if the
         writing touches the face of the will and affects the written portions (crossing
         things out)
         c. law of cancellation requires that the lines touch the writing of the document-
         not enough to write cancel in the margins or on the back of the document (see
         Thompson v. Royall- testator wrote on back of will that “this will is null and void
         and should only be used for purposes of drafting another will” ct probated will-
         although ct found that testator intended to revoke will, she did not adequately do
         so)- most jurisdictions require this
                 Note: if UPC dispensing power had been applied, the outcome may have
                 been different, only need clear and convincing evidence that this was
                 intent of the testator
         d. UPC- if person performs a revocatory act on a will (burning, tearing or
         canceling) it does not have to touch the words on the will itself
         e. if will cannot be located, the presumption is usually that testator destroyed will
         with the intent to revoke
3. Revocation by Operation of Law- the law will revoke a person’s will
         revocation by operation of law occurs when there is a change in either the family
         situation or the property holdings of the testator, such as birth of a child or the sale
         of property devised in the will, the law presumes (irrebutable presumption) will is
         revoked
         A: Changes in Family Circumstances
                 1. at cl- marriage always revoked the will of the wife; marriage and birth
                 of a child revoked the will of the husband
                 2- modern law- usually only by divorce; revokes only gifts to ex-spouse;
                 not entire will; some states still revoke by marriage or birth of child=
                 omissions of children or a spouse in a will are usually treated now by
                 giving them intestate shares unless the omissions are intentional
                 3. Minority of jurisdictions require that the divorce be accompanied by a
                 property settlement
                 4. UPC includes revocation of gifts to ex-spouses relatives -ex-spouse is


                                          -11-
                      treated as predeceasing the testator, so “O to my wife for life and then to
                      her children
                      5. These revocations usually apply only to wills and not to life ins
                      policies, pension plans, or other non-probate transfers
              B. Disposition of Property
                      1. at cl- if testator disposed of prop that is in will, the disposition of the
                      prop was said to be revoked
                      2. More appropriately considered from the standpoint of ademption by
                      extinction
     4. Partial Revocation
     a. best way to partially revoke a will is through a codicil
     b- most people just cross things out, but questions arise as to who really crossed things
     out- UPC presumes that if will is found in testators home, testator is the one that crossed
     things out- authorized partial revocation
     c- what if testator crosses something out which in turns creates a new gift: for ex:
     blackacre to A for life, testator crosses out “to life” thereby devising blackacre in fee
     simple to A: new gift is invalid (doesn’t comply with the Statute on Wills); most cts will
     still give A blackacre for life by applying the doctrine of dependant relative revocation-
     the reason being is that this is the best solution amongst the alternatives (hold will
     invalid, and person dies intestate); if testator crosses out words so unreadable, then the
     entire gift may fail
     -only allowed in a number of states, and usually only allow partial revocation by a
     subsequent instrument (bec fraud) see UPC
Two wills and Inconsistencies
     -a subsequent will that does not expressly revoke the prior will but makes a complete
     disposition of the testators estate is presumed to revoke it by inconsistency
     -a subsequent will that does not expressly revoke the prior will and does not make a
     complete disposition of the entire estate, it is not presumed to revoke the prior will but
     rather it is looked at as a codicil; and bec a codicil supplements a will rather than
     replacing it, cts will try to reconcile the two wills, any inconsistencies are resolved in
     favor of the later dated will (UPC and CL)

Substantial Compliance, Dispensing Power and Revocation
       -substantial compliance and dispensing powers only apply to revocation by a subsequent
       instrument- both do not apply to revocation by physical acts
Doctrine of Dependant Relative Revocation (DDRR)
       -the mere fact that a testator intended to make a new will, or made one which failed of
       effect, will not alone, in every case, prevent a cancellation or obliteration of a will from
       operating as a revocation- if it is clear that the cancellation and the making of the new
       will were parts of one scheme, and the revocation of the old will was so related to the
       making of the new as to be dependant upon it, then if the new will be not made, or if
       made is invalid, the old will, though canceled, should be given effect, if its contents can
       be ascertained in any legal way


                                                -12-
       -most common situation involves a revocation induced by a mistake of law or fact;
       revocation is ineffective if testator revokes his will upon a mistaken assumption of law or
       fact; that testator would not have revoked his will had he known the truth
       = the purpose of the doctrine is to permit a mistaken revocation to be undone
       -ex: Carter v. First United Methodist Church of Albany- testator’s validly executed will
       found folded together with another handwritten document that was unsigned and
       unwitnessed but purported to establish a diff scheme of prop disposition than her will, the
       will had pencil marks through some of the provisions; ct determined although testator
       intended to revoke her first will with the somewhat diff disposition of her prop in
       handwritten doc, they were part of one scheme; ct applied the ddrr; held that presumption
       of revocation had been rebutted, and opponent needed to prove that testator would have
       preferred intestacy; allowed will to probate
       - also applies when testator executes a valid will A, then another will B which expressly
       revokes the first will A, testator then revokes will B in the mistaken belief that she is
       thereby reviving will A; applying the DDRR , ct will probate will B
       -parol evidence is admissible to establish the testator’s mistaken state of mind
       Limits of dependant relative revocation
                cts have held DDRR applies only 1: where there is an alternative plan of
                disposition that fails or 2: where the mistake is recited in the terms of the revoking
                instrument
Revocation, Revival and DDRR
       -if the testator purports to revoke his will upon a mistaken assumption of law or fact, the
       revocation is ineffective if testator would not have revoked his will had he known the
       truth
       -usual case involves a testator destroying his will under a belief that new will will be
       executed or valid but for some reason the new will is invalid or never executed, if the ct
       finds that the testator would not have destroyed the will had he known the new will was
       ineffective, the DDRR will cancel the revocation and probate the destroyed will (this is
       unlike UPC where first revoked will remains revoked)
Revival
       -testator executes will 1 which he later revokes by will 2, testator then revokes will 2,
       does testator die intestate or is will 1 revived?= three possible answers
                1. Some jurisdictions hold that will 2 is not given effect until testator dies so will
                1 was never really revoked
                2. The majority of the jurisdictions hold that will 2 legally revokes will 1 at the
                time will 2 is executed- if testator intends to revive will 1 by revoking will 2 then
                will 1 is revived
                3. Revoked will cannot be revived unless re-executed with testamentary
                formalities or requirements
                4. UPC= a prior will is revived if it is evident from the circumstances of the
                revocation of the subsequent will or from the testator’s contemporary or
                subsequent declarations that the testator intended the previous will to take effect
                as executed otherwise prior will is not revived (presumption under UPC that


                                                -13-
               revoked will stands as revoked - if a will is revoked in its entirety and second will
               is executed and later revoked, the first will is not revived and the ind dies intestate
      *** however, under UPC, ct may apply dispensing power where the ct concludes that the
      decedent intended to revoke or revive, partially or completely a prior will***)
      -UPC and partial revocation and revival- if testator partially revokes a will by codicil and
      later revokes the codicil, the presumption is that the first will in its entirety is revived
Lost Wills
      -if will cannot be found at testators death and it was last known to be his possession, it is
      presumed that he revoked it
      - if will was last known to be in possession of third person, there is no such presumption
      -the contents of a lost and unrevoked will may be provided by parol evidence
Components of a Will
      A. Integration of Wills- integration means the determination of what papers constitute the
      testator’s will
               -logical flow from page to page
               -numbers on each page
               -the worst thing is to have separate topics begin on each page; rather it is better to
               have everything flow from page to page
      B. Incorporation by Reference- testator by provision in his will has legally reached out
      and caused extraneous material, such as a book, record or memorandum, to become part
      of the will; papers that are not part of a will can be included in the will and given
      testamentary effect
               1. Requirements for the doctrine of incorporation by reference to apply
                       a. the extraneous material must be in existence at the time of making the
                       will
                       b. the will on its face refers to such material as being in existence at the
                       time of making the will and shows intention to incorporate it
                       c. the extraneous material offered as part of the will is the identical
                       material referred to or described in the will
               2. UPC- general rule is that documents not in existence at the time a will is
               executed cannot be incorporated by reference, but the UPC provides that a will
               may refer to a written instrument or a list to dispose of personal prop items even if
               not in existence yet; the list must describe the items and the devisees with
               reasonable certainty and must be signed by the testator (signature required bec
               lack of signature may indicate lack of testamentary effect, but may be admitted
               w/out signature under dispensing power if there is clear and convincing evidence
               that testator intended the unsigned writing to dispose of personal prop)- list
               applies only to tangible personal prop
      C. Republication by Codicil- even if an informal document is not in existence when will
      referring to it is executed, a later republication of the will by a codicil will satisfy the
      existing document rule and will incorporate the document by reference if the document is
      properly identified in the will
               -see Clark v. Greeholdge- t drafts memo 1972, t modifies memo 1976, t executes


                                                -14-
               will 1977, t writes in notebook 1979, t executes codicil 1980- what constitutes his
               will- is notebook part of will?
               Ct uses republication by codicil and the doctrine of incorporation by reference to
               hold that notebook and memorandum are part of will bec will made reference to
               memo- clause in will stated that the will must give effect to any memo’s left by
               me, testator wrote in notebook addt’l gifts-the codicil republished the will so at
               time of codicil the notebook was in existence, and notebook qualifies as memo of
               her known wishes with respect to the distribution of her tangible prop even though
               written after will
               -Can a valid holographic codicil republish and validate a will which was
               inoperative because not dated, signed, or attested according to law?
               Yes- see Johnson v. Johnson- testator typed letter calling it his will which
               disposed of his prop but was not valid, on bottom of letter handwrote a disposition
               of his prop to his brother which he signed, ct found the handwritten portion was a
               valid holographic codicil and applied general rule that a codicil validly executed
               operates as a republication of the will no matter what defects may have existed in
               the execution of the earlier document, that the instruments are incorporated as
               one, and that a proper execution of the codicil extends also to the will
       C. Doctrine of Acts of Independent Significance
               - if the beneficiary or property designations are identified by acts or events that
               have a lifetime motive and significance apart from their effect on the will, a gift
               will be upheld under the doctrine of acts of independent significance
               ex: t devises her car to Jack, at time will executed car is worth 2,000, some time
               later t buys new car worth 30,000, Jacks gift is still valid, although t’s act in
               buying the new car had the practical effect of increasing the value of her gift to
               Jack, there are independent non-testamentary reasons which motivated her
               purchase of the car
               - if it is determined that some gifts do not have independent significance and held
               invalid, the gifts either go through residuary clause if there is none, then through
               the intestacy statute
Interpretation of Wills
A. Admissibility of Extrinsic Evidence
       -extrinsic evidence is evidence found outside the body of the will
       Plain meaning rule -a plain meaning in a will cannot be disturbed by the introduction of
       extrinsic evidence that another meaning was intended
               -ct will always look to find the intention of the testator- first look to the plain
               meaning of the language in the document allow no extrinsic evidence
       -extrinsic evidence is generally not allowed to construe clear and accurate descriptions in
       the will of the testator’s property or beneficiaries
       -Latent Ambiguities- extrinsic evidence is generally allowed to clarify latent ambiguities
       in a will- a latent ambiguity exists when the language of a will, though clear on its face, is
       susceptible to more than one meaning when applied to the extrinsic facts to which it
       refers


                                                -15-
               ex: t leaves 1,000 to my nephew John, t has two nephews named John, extrinsic
               evidence allowed to determine which nephew John was the intended beneficiary
               see In Estate of Russell- testator left entire estate to Roxy and Quinn Russell-
               Roxy was testators dog and Quinn was her friend, ct allowed introduction of
               extrinsic evidence to show that Roxy was dog and testator intended to leave prop
               in equal shares to her dog and her friend, Quinn argued that testator intended to
               leave her the entire estate and care for the dog, ct held that since dog could not be
               a beneficiary, half estate went to Quinn, remaining half went through intestacy
               -if testator imperfectly describes a beneficiary such as to my cousin John Doe and
               testator has cousin named Joe Doe and an uncle John Doe, ct will permit extrinsic
               evidence to determine who testator intended gift to mean
      -Patent Ambiguities- a patent ambiguity is one that exists on the face of the will; some
      states do not allow extrinsic evidence to clarify the ambiguity and the will fails, others
      have disposed of this problem by simply construing the language of the will without the
      aid of extrinsic evidence
      ex: I leave 25% to X,Y and Z- did testator mean 33% so that her entire estate was
      devised, ct will change to 33% in order to distribute her entire estate
      -most cts use the “four corners approach” to interpret the will rather than allow extrinsic
B. General Rule for Mistakes in a Will
      -general rule is that a ct will not reform a will for a mistake if document has plain
      meaning on its face; ct will not permit extrinsic evidence to alter or change the plain
      meaning of the will
               -ex: testator uses term “heirs” and believes the term means cousins but it actually
               means aunt, ct will not correct mistake-the plain meaning and view of document
               doesn’t reveal a mistake (see Mahoney v. Grainger)
               -cts generally will not allow extrinsic evidence for scrivener errors if no mistake
               readily apparent on face of will (See Connecticut Junior Republic v. Sharon
               Hospital- where ct refused to allow extrinsic evidence to show the testator’s
               intention not expressed in the will itself, nor for the purpose of proving a devise or
               bequest not contained in the will- construction of a will must be derived from the
               words of it and not from extrinsic evidence = testator left prop to 7 charities in
               will, later executed a codicil for 11 charities, IRS devised new rule, atty had to
               redraft codicil to comply with IRS rule and mistakenly followed the first will to 7
               charities, testator signed w/out reading, pl argued that ct should allow extrinsic
               evidence to show that testator intended to leave to 11 charities and prove
               scriveners error)
C. Curative Doctrine of Mistake
      -what if two will exact in nature have been accidently signed by the wrong person, ex
      husband signs wife’s will and vice versa, some states will use “8 corners approach”,
      determine testators intent and allow probate see In re Snide; other states will not look at
      both wills and refuse to probate the will - see In re Pavlinko’s Estate, ct refused to correct
      mistake of parties signing each other’s will
      -a mere false description does not make the instrument inoperative= a false description of


                                                -16-
       prop or of the intended recipient may be stricken, for ex: sisters have identical wills,
       Jane’s will leaves prop to Jane Doe rather that June, ct strikes out Jane
D. Gifts by Implication
       -one of the recurring oversights in drafting is to leave a gap in the dispositive provisions-
       a particular contingency (which occurs) is not provided for
       -some cts employ the process of construction to imply gifts-
       -to fill gaps in wills, one state has a developed a doctrine of probable intent: if a
       contingency for which no provision is made in a will occurs, the ct studies the family
       circumstances and the plan of testamentary disposition set forth in the will- the ct then
       places itself in the position of the testator and decides how the testator would have
       responded to the contingency
       -most cts refuse to imply a gift in a will= for ex: testator says to A in fee simple,
       remainder to B, although intent to leave B something, there is no remainder, ct will not
       give B anything; or if testator names four stepchildren in his will and then states in a
       clause that he disinherits anyone not named in the will, ct will not imply that testator
       intended to give any gifts to 4 stepchildren; he merely named them; nothing in will to
       show such testamentary intent
       ***DISPENSING POWER DOES NOT APPLY TO INTERPRETATION OF
       WILLS- ONLY APPLIES TO EXECUTION OF WILLS***
E. Death of Beneficiary Before Death of Testator
       1. General Rule-if a devisee does not survive the testator, the devise lapses (fails)
       -all gifts made by will are subject to a requirement that the devisee survive the testator,
       unless the testator specifies otherwise
                a. If a specific or general devise lapses, the devise falls into the residue
                b. If the devise of the entire residue lapses because the sole residuary devisee or
                all the residuary devisees predecease the testator, the heirs of the testator take by
                intestacy (this has been overturned by statute in a maj of the juris)
                c. If the devise is to a class of persons and one member of the class predeceases
                the testator, the surviving members of the class divide the gift
                d. If a devisee is dead at the time the will is executed, the devise is void
       -these cl rules are default rules, they apply only if the will does not provide what happens
       when a beneficiary predeceases the testator
       -Lapsed Gifts and Class Gift- must determine whether testator really intended to make a
       class gift or to specific individuals; usually determined by seeing who testator named, for
       ex in Dawson v. Yukus, it seemed like testator left class gift, she named two nephews and
       one predeceased the testator; evidence showed that testator had other nephews so instead
       of giving the gift to the class of nephews, ct held that she intended to give gift to two
       specific individuals, and held that gift to predeceased nephew passes under residuary
       clause
       2. Antilapse statutes -nearly all states have devised Antilapse statutes which under
       specified circumstances, substitute another beneficiary for the predeceased devisee
       -a typical antilapse statute provides that if a devisee is of a specified relationship to the
       testator and is survived by issue who survive the testator the issue are substituted for the


                                                -17-
      predeceased devisee; but the antilapse statute will only apply if the devisee bears the
      particular relationship to the testator specified in the statute
      UPC- applies only to devises to a grandparent, al lineal descendant of a grandparent, or a
      step child of the testator
      -antilapse statute gives the gift to deceased beneficiaries relatives, but question arises of
      who should be the alternative beneficiary- usually issue; rarely spouse
      -antilapse statute does not apply if testator includes provision that it shall not apply or if
      testator provides for an alternative beneficiary
      -cts favor antilapse statutes over intestacy see In re Estate of Ulrikson
      cl rule: if testator states “to my brother if he survives me”-evidence that testator did not
      want antilapse statute to apply
      UPC- same phrase is not evidence that testator did not intend for antilapse stat to apply
      -Antilapse statutes only apply to wills, not jt tenancies, intervivos gifts, trusts or any other
      nonprobate transfers
F. Changes in Property After Execution of Will: Specific and General Devises
      -specific devises of real and personal prop are subject to the doctrine of ademption by
      extinction
      -a gift is adeemed if some time after will is executed the testator no longer owns the
      property, or substitutes the prop for new prop ex: I give blackacre to Z, testator sells
      blackacre and purchases whiteacre, Z has no claim to whiteacre since blackacre is a
      specific devise and testator did not devise whiteacre to him
      -ademption applies only to specific devises- a specific devise is a disposition of a specific
      item of the testator’s property- ex: I leave my diamond ring
      -does not apply to general devises- a devise is general when the testator intends to confer
      a general benefit and not give a particular assets-ex: I give X 10,000- if there is not
      10,000 in cash, the legacy is not adeemed; other assets must be sold to satisfy the 10,000
      to X
      -what about a change in form of property, for ex “ I leave my 100 shares of IBM to X” at
      testators death the shares have doubled, X still takes 100 shares and remaining shares go
      into residuary clause, no change in substance but rather in form

RESTRICTIONS ON THE POWER OF DISPOSITION: PROTECTION OF SPOUSE
AND CHILDREN
-generally when a person dies testate, the surviving spouse and children are protected under
statute against disinheritance- (children are not protected if testator states so in the will)
1. Rights of Surviving Spouse-
        -two basic marital property systems exist- the system of separate prop, originating in the
        cl of England, and the system of community prop, originating from Roman law
        -the fundamental diff between the two is that under the CL system husband and wife own
        separately all prop each acquires, whereas under the Community Prop Sys husband and
        wife own all acquisitions from earnings after marriage in equal undivided shares
        A. Community Property System
                -stems from a partnership theory of marriage; each spouse is equal partner in


                                                 -18-
              marital unit
              -generally treats husband and wife as co-owners of prop acquired by either during
              marriage
              -prop acquired before marriage and prop acquired during marriage by gift, devise
              or descent is the acquiring spouse’s separate prop
              -on the death of one, the survivor is entitled to ½ the prop and remainder (along
              with prop not part of the comm) goes accd’g to the will of the decedent or under
              the intestacy statute
              -some states have modified this to allow judge discretion to give extra support to
              surviving spouse
              -prop acquired by decedent prior to marriage are not part of the comm
              -only 8 states have adopted this system
       B. Common Law System
              -whatever the worker earns is his or hers- no sharing of earnings
              -surviving spouse takes an elective share in decedent’s estate if disinherited
              -elective share is enforceable against all prop owned at decedent’s death; applies
              to all prop regardless of when it was acquired (before or during marriage)
              -elective share is usually 1/3
              -surviving spouse may choose to either elect a forced share or the provisions made
              in the spouse’s will
2. Rights of Surviving Spouse to Support
       A. Homestead
              -nearly all states have homestead laws designed to secure the family home to the
              surviving spouse and minor children, free of the claims of creditors
              -generally surviving spouse has right to occupy house for his or her life
       B. Personal Property Set Aside
              -similar to homestead- allows surviving spouse to set aside certain tangible
              personal prop of the decedent up to a certain value (UPC 10,000); these items
              usually include furniture, clothing etc
       C. Support
              1. Social security- retirement benefits are paid to a worker and his or her surviving
              spouse; worker has no right to shift the survivor’s benefit to a person other than
              the spouse
              2. Private Pension Plans- funded by employers or jointly funded by employer and
              employer; most governed by ERISA, requires that the spouse of an employee must
              have survivorship rights if the employee predeceases the spouse
       D. Family Allowance
              -every state has a statute authorizing the probate ct to award a family allowance
              for maintenance and support of the surviving spouse (and often of dependant
              children)-allowance not allowed after the estate is closed
              -allowance, like homestead and personal prop set aside, is in addition to whatever
              other interests pass to the surviving spouse
       E. Dower


                                               -19-
              -wife take 1/3 of her husbands land- abolished in most states
3. Rights of Surviving Spouse to a Share in Decedents Property
       A. Elective Share
              -as mentioned above, all but one state under the CL separate prop system allows
              wife to take an elected share of the decedents property
              -underlying policy is that the surviving spouse contributed to the decedents
              acquisition of wealth and deserves to have a portion of it
              -the spouse can take under the decedent’s will or can renounce the will and take a
              fractional share of the decedent’s estate
              -some statutes require a best interests determination
              -In re Estate of Clarkson
                       decedent left wife testamentary trust giving her 1/4 of the estate and if
                       needed, the principal from the estate for needs of her life (only a life
                       estate); wife was incompetent
                       she chose to take by elective share which would still give her a 1/4 interest
                       but in fee simple; the provisions under the elective share statute provided
                       that taking by elective share must be in surviving spouse’s “best interests”-
                       ct determined it was in her best interests to take elective share -greater
                       pecuniary interest in fee simple than life estate, also would not be limited
                       by terms of the trust “for needs of her life”
              -Best Interests Determination- maj of cts take other factors into consideration
              rather than money, such as preserving the decedent’s estate plan; ind
              circumstances of the spouse, interests of possible heirs
              -minority view suggests that best interests are served by electing the method
              which is the most valuable to the surviving spouse; method which provides for
              greatest pecuniary interest (Clarkson above- ct also states that looking at interests
              of her heirs plays no part of the decision however her heirs benefit from her taking
              the elective share, and not under the will)
              - What if testator leaves 3/4 of his estate to X and 1/4 to wife, wife chooses to take
              by elective share which gives her ½, then X’s share is reduced to ½ bec if ct finds
              it is in wifes best interest to take by elective share, this determination overrides
              provisions in the will
              2. Augmented Estate UPC- provides for elective share of a decedent’s augmented
              estate taking into acct length of marriage
              -under the elective share system, the wife must survive her husband and elect to
              claim a share against his will
              - sliding scale system based on duration, ex: if the marriage has been 5 to 6 years,
              the surviving spouse receives 15%; if the marriage has been 15 years or longer,
              the surviving spouse is entitled to 50% of the estate; if the surviving spouse’s
              share is below 50,000, UPC gives the surviving spouse a 50,000 supplemental
              elective share amount
              -the augmented estate is one that has been adjusted to take into acct certain
              lifetime transfers by the decedent and property given by the decedent to the


                                               -20-
surviving spouse; rather than just his net probate estate
-Calculating the Decedent’s Augmented Estate
1. The value of net probate estate (estate after funeral expenses and
administration costs)
2. The value of the decedents nonprobate transfers to others that were made within
2 years of his death, including prop over which the D alone held a presently
exercisable general power of appointment , the D’s fractional interest in prop held
by D in jt tenancy, proceeds of insurance, any irrevocable transfers in which the D
retained the right to the possession or enjoyment of or to the income from the
prop, any transfer in which the D created a power over income or property,
exercisable by the D alone or in conjunction with another person for the benefit of
D, his creditors, his estate, or creditors of his estate, prop that passed during
marriage incl any transfer of prop made to or for the benefit of a person other than
the D’s SS
NOTE: any nonprobate transfers to others that the SS jointly agreed upon in
writing or consented to in writing will not be considered in augmented estate
3. The value of nonprobate transfers to the SS by D, which consists of all property
that passed outside probate at the decedent’s death from the decedent to the SS
reason of the D’s death, including: the D’s interest in jt tenancy with spouse, the
D’s ownership interest in prop or accts held in co-ownership registration with
right of survivorship that passes to SS,
4. The value of SS’s assets and non probate transfers made by SS to others, inl
any prop owned by SS at decedents death, incl SS fractional interest in jt tenancy
with rights of survivorship, SS’s interest in co-ownership accts, and prop passed
to the SS by reason of the D’s death, but not including the SS’s right to
homestead, allowance, ext.; the value of any prop included under this section is
reduced by enforceable claims against the SS
5. Then apply elective share %
NOTE: if married for less than one year, no %- supplemental elective share amt of
50,000 and this amt is substituted if after determining SS’s elective share through
calculations of elective share it is found that her share is less than 50,000 UPC
instead makes it 50,000 (ex: if SS elective share is 30,000 this amt does not stand,
instead 50,000 is used as her elective share, still must satisfy her share but through
a different procedure than normal
6. Once elective share has been ascertained, necessary to determine where it came
from:
        -spouse must disclaim prop that came by will or intestacy
        -credit against the elective share any assets to which spouse succeeds bec
        of decedents death (life ins policies, jt tenancy interests)
        -twice the elective share % of the survivors assets
        -rest from Ds estate
Ex: H and W have been married for 25 years- W is entitled to 50% elective share
H’s augmented estate includes:
100,000 net probate estate devised to A


                                    -21-
               150,000 nonprobate transfers to others
               25,000 life ins payable to W
               50,000 H’s half interest in jt tenancy held for W
               75,000 W’s assets/property
               50,000 W’s half interest in the jt tenancy
               Total augmented estate is 450,000

               W has an elective share of 50% of the whole so 225,000- but since W owns 75,000 in her name,
               this amt is credited against her share, also credited against her share is 25,000 life ins, 50,000 for
               H’s half interest in jt tenancy, and W’s 50,000 in jt tenancy, thus the amt of W’s elective share
               payable out of H’s probate estate and nonprobate transfers is 25,000

               D’s Assets= 400,000
               S’s Assets= 200,000
               Take 50% of 600,000 = 300,000
                      Twice the elective share of the S’s assets is 200,000 (50% times 2 is
100%)
                         100,000 from D’s assets
        -Elective Share System makes no provisions for children, surviving spouse has
        responsibility to support the children
        -The consequences of not taking an elective share has been interpreted as transferring the
        assets; if for ex: wife is on medicaid and elects not to take elective share, medicaid now
        denies her benefits bec she would have had money but instead transferred her assets
        ***Traditional elective share statute which has been adopted by most states is 1/3 of
        the decedent’s net probate estate regardless of how much prop was transferred to
        the surviving spouse by the decedent during life or how rich the surviving spouse
        is***
        NOTE– a pretermitted heir under UPC may elect an elective share of D’s
        augmented estate or take under the pretermitted heir statute
        Example of Traditional Elective Share Statute
        King v. King- testator left estate to his wife and children, prior to his death he transferred
        prop to wife, she chose to take by elective share rather than by will, elective share statute
        followed traditional method which only is based on net probate estate rather than
        augmented estate, children argued that bec prop transferred during life not included in
        determining elective share, it should constitute as an advancement since her taking by
        elective share significantly reduces their shares in the will, ct holds no, 1- the nonprobate
        prop will not be included in estate and 2- will not constitute an advancement- elective
        share is strictly determined by decedents net probate estate
        NOTE: under UPC, this prop would have been included
        -Some cts have deviated from the trad rule and will extend the elective share to some
        nonprobate transfers- Seifart v. Southern National Bank of S.C.
        -ct determined that trust assets in a revocable intervivos trusts should be included in
        probate estate for purposes of elective share; the trust created was considered illusory;
        that the settlor retained powers over the trust assets so extensive that he had until his
        death the same rights in the assets of the trust after creating it that he had before its


                                                       -22-
       creation; trust granted settlor extensive powers, trustee was forbidden from exercising any
       powers over the prop; ct considers the trust invalid and any assets in a trust that fails
       would revert back to the settlors estate and become part of the residue and part of the
       estate for elective share purposes
       RULE: where a spouse seeks to avoid payment of the elective share by creating a trust
       over which he exercises substantial control, the trust may be declared invalid as illusory,
       and the trust assets will be included in the decedents estate for calculation of the elective
       share
       Sullivan v. Burkin- testator disinherited wife in will; she sought to take by elective share
       and have assets of intervivos trust included in estate; trust not testamentary in character,
       ct refused to include assets of intervivos trust into the decedents estate for this case,
       however held for the future that the estate of a decedent shall include the value of assets
       held in an intervivos trust created by the deceased spouse as to which the deceased spouse
       alone retained the power during his or her life to direct the disposition of those trust assets
       for his benefits, for ex. by power of appointment or by revocation of the trust,= no need to
       determine decedents intentions of creating the trust, whether it was illusory or not, simply
       an obj test- did he create a trust, did he have significant control over assets= if yes, then
       part of his estate;
       -Intent to Defraud Tests- some cts look to see if decedent intended to defraud his
       surviving spouse; a subj approach
       Avoiding Elective Share Statutes
       -devise a prenuptial agreement; based on law of contracts, will only be invalidated under
       principles of contract law
4. Rights of Issue Omitted from the Will
       -in all states except LA, a child or other descendant has no statutory protection against
       disinheritance by a parent- there is no requirement for a testator to leave any prop to a
       child, not even one dollar
       -the law, however, does not favor cutting out children from a parents estate especially -
       when the testator leaves no spouse- cts have devised a number of doctrines to protect
       children
       1. Pretermission Statutes- designed to prevent unintentional disinheritance of
       descendants
       -usually apply if child is born or adopted after testator executes his will; in over half the
       states, a child living when the will is executed may also claim as a pretermitted heir; such
       laws also generally apply to children believed to be dead but who are in fact alive at the
       time the will is executed; pretermitted child usually receives a share of the estate equal in
       value to that he would have received if the testator died intestate
       -cts may not consider a child born after a will is executed a pretermitted heir if the testator
       after executing the will and after birth of a child executes a codicil which republishes the
       will- see Azunse v. Estate of Azcunse where ct held that where the codicil expressly
       republishes the will and expressly adopts the terms of the will, the testators child who is
       living at time of codicil but not at time will was executed is not a pretermitted child and
       denied the child a statutory share of her fathers estate as a pretermitted child


                                                -23-
      -in the case above, can the child bring a suit against the atty for malpractice- no privity,
      no standing to bring suit, not an intended beneficiary- to bring suit agst atty, ind must
      either be in privity with atty, or must be an intended beneficiary
      -pretermission statutes do not apply if testator, in the will, intentionally disinherits the
      child or if testator gives almost entire estate to surviving spouse
              Ex: testator has two children X and Y, testator leaves “estate to wife, and if she
              dies to X” wife survives so X takes nothing, Y is allowed to take as pretermitted
              heir since testator did not expressly disinherit Y in the will
      Typically two types of Pretermitted Child Statutes which operate in favor of
      children alive at time will was executed, also includes afterborns
      1. Missouri Type- statute drawn to benefit children not named or provided for in the will,
       it must appear on the face of the will that omission of the child was intentional (in ex
      above that is why Y is allowed to take); extrinsic evidence if intent is not allowed
      2. Massachusetts Type- the child takes unless it appears that such omission was
      intentional and not occasioned by mistake; extrinsic evidence is allowed to show both the
      presence or absence of intent to disinherit
      UPC- does not allow extrinsic evidence; intent must be shown by face of will itself
      (similar to Missouri type statute)
5. Spouses Omitted From a Premarital Will
      -generally a spouse omitted from a will that was executed prior to marriage is allowed to
      take a share in equal value to what the spouse would have received had the testator died
      intestate
      -Pretermitted Spouse Statutes usually specify conditions that if are established would
      preclude the spouse from taking under the statute
              -if testator’s failure to provide for spouse was intentional and such intention
              appears on the face of the will or
              -if testator provided for spouse by transfer outside the will and the intention is
              shown that such transfer be in lieu of a testamentary provision or
              -if spouse made a valid agreement waiving the right to share in the testators estate
      -presumption is in favor of revoking the will as to the omitted spouse; heavy burden rests
      on the proponent of the will to show that above conditions are established and spouse
      should not be allowed to take under pretermitted spouse statute
      -see Estate of Shannon- ct held that omitted spouse allowed to take under statute, testator
      executed will 12 years prior to their marriage, he had clause in will that said anyone not
      mentioned is disinherited, however, ct held this does not pertain to SS bec nothing
      indicates an intention to disinherit her; also testator gave SS certain assets outside will but
      no proof that these transfers were in lieu of testamentary dispositions, and even though
      they kept their prop separately, ct held that is not a valid agreement that shows spouse
      waived her right to share in testators estate
      UPC Pretermitted Share Statute- - if testator executes will prior to marriage, SS is entitled
      to receive as an intestate share that portion of the testators estate that is neither devised to
      testators children born before the testator married and who are not children of the SS,
      unless it appears from the will that testator devised will in contemplation of his marriage


                                                -24-
       to the SS, the will expresses the intention to be effective regardless of any subsequent
       marriages or the testator provided for the SS by transfer outside the will
       -Under this section of UPC, an omitted spouse is entitled only to net probate estate, but if
       wife elects not to take under pretermitted heir statute and instead elects to take elective
       share, then that share is computed by using D’s augmented estate

Contracts Relating to Wills
      -a person may enter into a contract to make a will or a contract not to revoke a will
      -the law of contracts, not the law of wills, applies to these
      -the contract beneficiary may sue under the law of contracts and prove a valid contract; if
      after a contract becomes binding, a party dies leaving a will not complying with the
      contract, the will is probated but the contract beneficiary is entitled to enforce the contract
      by having a constructive trust impressed for his benefit upon the estate or devisees of the
      defaulting party
      -usually many states have statutes which require an agreement to make a will to be in
      writing, otherwise anyone could argue that there was an agreement to make a will
      -if the state does not require a writing, an oral agreement to leave personal prop may be
      valid and enforceable, an agreement to devise real prop however is within the statute of
      frauds
      -the remedy for breach of a contract to devise or bequeath prop is through the medium of
      a trust in a ct of equity, rather than by an injunction to enjoin the probate of the last will
      which constitutes the breach
      -when mutual and/or joint wills are executed, contractual issues often arise
      1. Joint Will= a joint will is a single document executed by two or more testators as their
      will; when one dies it is probated as his will, and when the survivor dies it is probated as
      her will
               ex: A and B executed a jt will providing that survivor takes the estate and on
               survivors death estate passes to C. A dies, estate goes to B, B then marries D and
               executes new will devising his entire estate to, B then dies, both C and D claim
               the estate, the estate goes to C bec jt will is a contractual will; terms of contract
               are not merely to write a will but joint agreement of who will be the beneficiaries;
               B did not have devisable property interests for D to inherit, B only received a
               power to use the assets from the A/B joint will during his life, furthermore, D also
               cannot claim an elective share (Rubenstein)
               =however, in Shimp v. Huff, testator devised will accd’g to joint will contract that
               was executed with first wife now deceased, testators surviving spouse requested to
               take by elective share (nothing in will for her) ct held that because of public policy
               if favor of protecting a surviving spouse, the beneficiaries claims under the
               contract are subordinate to surviving spouse’s right to take under elective share, ct
               allows her to take under elective share; contract beneficiaries rights were limited
               by the possibility that the survivor might remarry and the subsequent spouse may
               elect against the will
               -jt wills should include a clause that the survivor agrees not to revoke the will, can


                                                -25-
                be in the will or in another agreement in writing this is bec the traditional rule
                implies that if not written, jt wills are revocable; some ct infer that neither is to
                revoke
       -some states require the words “we”, “us” to show it is a jt contract
       2. Mutual Wills- each spouse writes separate wills but with the same or reciprocal
       provisions (in re Pavlinko)
       -with mutual wills do not constitute a contract not to revoke; either testator may revoke
       his will at any time; need more external proof that neither is to revoke
      3. If either have a clause not to revoke, beneficiaries take the entire estate- ct treat these
       contracts as giving the survivor a life estate w/ power to consume, even though contract
       not written this way, this is bec they can’t devise their interests to anyone
       4. Joint and Mutual Wills- a term use by cts to describe a joint will that devises prop in
       accordance with a contract; mutuality refers to the contract, not the reciprocal provisions
       of separate wills
       5. Legal Consequences of Joint of Mutual
       -no legal consequences of either unless they are executed pursuant to a contract between
       the testators not to revoke their wills; most cts hold that a contract not to revoke is
       unenforceable unless there is clear and convincing evidence; the mere execution of a joint
       or mutual will is not enough; however, a jt scheme suggest an underlying agreement
       -lawyers should place a provision in every joint or mutual will that the will was not
       executed pursuant to a contract to avoid litigation
       -UPC= contract to make will or contract not to revoke may be established only by
       provisions in the will stating material provisions of the contract, an express reference in a
       will to a contract and extrinsic evidence proving the terms of the contract or a writing
       signed by the decedent evidencing the contract ** execution of a jt or mutual will does
       not create a presumption of a contract not to revoke the wills
Testamentary Capacity and Will Contests
       A. Mental Capacity
       -in almost all states, a person must be 18 years or older to make a will; a person must also
       be of sound mind
       -power of Testation is not extended to individuals lacking mental capacity because of the
       risk of undue influence
       -testamentary capacity is usually the first grounds for contesting a will
       -most states have statutes re: capacity; places burden on ind contesting the will to show
       that testator is not sane (premise that ind is legally sane)
       -requirements for mental capacity are minimal- decedent only has the ability to know and
       understand 1) the nature and extent of his prop, 2) the persons who are the natural objects
       of his bounty, 3) the disposition the decedent is making (the nature of the act) and 4) how
       these elements relate to one another in order to form an orderly plan for the disposition of
       the decedent’s property
       -testator does not have to have average intelligence as this would incapacitate almost ½
       people making wills, but the testator must have mind and memory relevant to the four
       matters above; testator must understand the significance of the act


                                                -26-
       -Insane Delusions-
       -a legal not a psychiatric concept-delusion is a false conception of reality
       if one writes a will under an insane delusion the will fails for lack of testamentary
capacity
       -if the testators drafts part of a will under an insane delusion, only that part fails
       -most cts hold that a delusion is insane even if there is some factual basis for it if a
       rational person in the testators situation could not have drawn the conclusion reached by
       the testator
       ex: In re Honigman- testator left his wife what her forced statutory share would have
       been- 2500 outright, wife contested will on grounds that testator was delusional and under
       an insane delusion that she was unfaithful to him, they were married for over 40 years,
       proponents of will did not offer concrete evidence to show that testator had a reasonable
       basis for his belief, (ct employed reasonable basis test) wife came forward with evidence
       showing that testator was under insane delusion, burden then shifts to proponents to
       provide a basis for the alleged delusion; ct allowed wife to take her intestacy share since
       ct determined testator was under insane delusion
       Distinction between Mistake and Insane Delusion
       -insane delusion is a belief not susceptible to correction by presenting testator with
       evidence indicating the falsity of the belief; a mistake is susceptible to correction if the
       testator is told the truth; cts generally do not reform wills because of mistake but they will
       reform or invalidate wills resulting from an insane delusion
       Anti-Mortem Statutes
       -3 or 4 states have anti-mortem statutes which probate of a will during the testator’s life;
       these statutes authorize a person to institute during the testator’s life an adversary
       proceeding to declare the validity of a will and the testamentary capacity and freedom
       from undue influence of the person executing the will
       B. Undue Influence
       -very difficult to define; to prove undue influence must establish that testator was
       susceptible to undue influence, that the influencer had the disposition and opportunity to
       exercise undue influence, and that the disposition is the result of the influence
       -usually involves conduct of manipulation; never direct evidence
       - the existence of a confidential relationship between a testator and a beneficiary may
       raise a presumption of undue influence, see Lipper v. Weslow- testator left nothing in will
       for grandson, grandson contested on grounds that testator’s son (who was also an atty and
       wrote her will) used undue influence for testator to disinherit gs; that son was in close
       confidential relationship with his mother, had opportunity and perhaps a motive to
       influence her but other evidence existed to show why testator had
        disinherited gs (letter to friend) ; also evidence showed that testator was strong mind- ct
       found no undue influence; employed test of undue influence:: whether such control was
       exercised over the mind of the testator to overcome her free agency and her free will, and
       control caused her substitute her true desires for her will
       -need more that reasonable suspicion; need some specific facts to prove undue influence
       -Most juris apply rule where 1) a person in a confidential relationship 2) receives the bulk


                                                -27-
of the testators prop 3) from a testator of weakened intellect, the burden of proof shifts to
the person occupying the confidential relation to prove affirmatively the absence of undue
influence
Remedy:: that portion of the will that is the product of undue influence may be stricken
and the remainder of the will allowed to stand if the invalid portions of the will can be
separated without defeating the testators intent or destroying the testamentary scheme
-Gifts to Atty- a gift to the testators atty is particularly susceptible to a claim of undue
influence because of the close and fiduciary nature of the atty-client relationship; many
cts create a presumption of undue influence in these circumstances, except when the atty
is related to the testator, the presumption can be rebutted by clear and convincing
evidence by the atty
-the ABA Rules on Prof Conduct provide that an atty should not prepare an instrument
giving himself or a person related to the atty any substantial gift from a client, incl a
testamentary gift, except where related to the donee
C. Fraud
-fraud occurs where the testator is deceived by a misrepresentation and does that which
the testator would not have done had the misrepresentation not been made
-the misrepresentation must be done with the intent to deceive the testator and the
purpose of influencing the testamentary disposition
-any provision in a will procured by fraud is invalid; the remaining portion of the will
stands unless the fraud goes to the entire will or the portions invalidated by the fraud are
inseparable from the rest of the will
-if will is probated, ct may however impose a constructive trust on the wrongdoer,
compelling the wrongdoer to surrender the property acquired by the wrongful conduct
Two types of Fraud
1. Fraud in the Execution- occurs when a person misrepresents the character or contents
of the instrument signed by the testator
2. Fraud in the Inducement- occurs when a person misrepresents facts thereby causing the
testator to execute a will, to include particular provisions in the wrongdoer’s favor, to
refrain from revoking a will or not to execute will
C. No Contest Clause
-a no contest clause provides that a beneficiary who contests a will shall take nothing, or a
token amt, in lieu of the provisions made for the beneficiary in the will
-designed to discourage will contests
-enforcement of a no content clause may inhibit a lawsuit proving undue influence, fraud
or mental incapacity so cts have worked around the clause by allowing suits which do not
constitute a contest of the will; suits to construe wills are not contests; even an attack on
certain provisions of the will as being illegal has been held to be merely a suit for
construction
-a request by a beneif for a declaratory judgment as to whether a particular activity will
violate a no contest clause is not necessarily a contest
-if the suit is determined to be a contest, most cts will enforce the clause unless there is
probable cause for the contest (adopted by UPC and Restatement)


                                        -28-
                                            TRUSTS
A. Generally
       -a device whereby a trustee manages property for one or more beneficiaries; primarily
       concerned with private express trust gratuitously created for the benefit of individual
       beneficiaries (as opposed to charitable purposes, pensions, giant investment funds)
       -creates fiduciary relationship w/respect to property- holds prop subject to the benefit of
       another
       -neither trustee nor beneficiary owns the property to the exclusion of the other; rather
       each owns a different interest in the property-trustee owns the legal interest -beneficiary
       owns the equitable interest
       -the transfer of property into a trust severs the title of the property
       -trusts can occur over a long duration of time- but subject to rules against perpetuities
B. Use of Trusts in Estate Planning
       -avoid probate by transferring property into a revocable intervivos trust
       -secures income, gifts, and estate savings that are not obtainable or are not as readily
       obtainable by any other form of disposition
C. Requirements of a trust
       1. Requires three parties- settlor, trustee, and beneficiary- each need not be a separate
       party, one party can satisfy two, even all three; however if settlor is trustee and the sole
       beneficiary the trust will fail because the settlor must be accountable for performance of
       trust duties to someone- to have a valid trust, the trustee must owe equitable duties to
       someone rather than himself- for example O places blackacre in trust declaring himself
       trustee and to pay the income therefrom to himself for life, and upon his death blackacre
       to pass to A- this is a valid trust because A can hold O accountable for performance of
       trust duties
       A. Settlor- a property owns that transfers assets to a trustee in either a trust instrument or
       a will setting forth the terms of the trust- including the dispositive provisions fixing the
       beneficiaries’ interests and the administrative provisions specifying the powers and duties
       of the trustee in managing the trust estate.
       -settlor can create either an intervivos trust-two types below- or a testamentary trust
       B. Trustee
       -can be an individual or a corporation that holds the property in trust- can also be the
       settlor or a third party; trustee may also be a beneficiary but not the sole beneficiary; for
       example O devises property to W in trust to pay the income to W for life and upon W’s
       death the property to pass to O’s children- W must keep the trust property separate from
       her other property


                                                -29-
      -a trust will not fail for lack of trustee if settlor intends to create a trust but fails to
      name a trustee because a court will appoint a trustee to carry out the terms of the trust;
      however a ct will not impose upon a person the office of trustee unless the person accepts
      due to the onerous duties and liabilities a trustee has; however, trust may also fail if
      settlor explicitly states that trustee is to be only a particular individual
      -trustee holds legal title to the trust property
      -trustee is liable for failing to follow terms of the trust, improperly managing the
      property- the trustee may be released from liability only with consent of beneficiaries or
      by a ct order
      -Responsibilities of trustee include managing the trust property solely in the interest of
      the beneficiaries, preserve the property, make it productive and where required by the
      trust instrument, pay the income to beneficiaries, duty to keep the trust property separate
      from other property, to keep accurate accounts, to invest prudentially, and not to delegate
      trust powers – if trustee has no active duties, then the trust is said to be passive or dry and
      the trust fails- the beneficiaries will acquire legal title to the trust property
      -trustee may not object to any modifications of the trust that the settlor and benef agree
      upon
      C. Beneficiaries
      -hold equitable interests to trust property
      -may have personal claims against the trustee for breach of trust
      -Equity gives benef. remedies relating to trust property itself- personal creditors of
      trustee, other that trust benef. cannot reach the trust property, if trustee wrongfully
      disposes of prop, benef can recover trust prop unless prop has landed in the hands of a
      bonafide purchaser- if trustee sells prop and acquires new prop with the proceeds of the
      sale, the benef can enforce the trust on newly acquired prop
      -private trusts almost always create successive beneficiaries-income usually paid to benef
      or a class of benef for life and so one
      -benif are necessary bec there must be someone to whom the trustee owes fiduciary duties
      -beneficiaries do not need to be identified at time trust is created, but must be
      ascertainable at some point, otherwise the trust fails
      -can be unborn or unascertained when trust is created- for ex: to my future children in
      trust is valid; if however the beneficiaries are too indefinite to be ascertained, the
      attempted trust may fail for want of ascertainable beneficiaries
               see Clark v. Campbell- testator left testamentary trust stating that trustee shall
               distribute articles to “my friends” ct had to determine whether there was definite
               ascertainable beneficiaries; testator is allowed to have a class of beneficiaries
               (sisters, nephews) but must be identifiable in some way; ct holds trust incapable of
               taking effect bec benef’s are not identifiable; no way to determine “friends”, no
               criteria, no limiting language- ct instructed trustee to hold prop in trust for the
               next taker under the will, or for the next of kin by way of a resulting trust
D. Creation of a Trust
      1. General Requirements
      -an enforceable trust can be created without a writing unless otherwise provided by


                                                -30-
statute
          -an oral trust of personal prop is valid and enforceable in most jurisdictions
          - almost all juris have statutory provisions requiring that express trusts of real prop be
          evidenced by a signed writing; based on Statute of Frauds
          -no special formalities for writing; the only requirements are that it be signed and that it
          contain the essential terms of the trust; a description of the trust property, the
          beneficiaries, and the purpose
          Requirements include intent to create a trust, purpose of trust, identification of
          beneficiaries, and trust res
          2. Intent to Create a Trust
          -no particular form or words is necessary- the words trust or trustee are not necessary
          -what is necessary is the manifestation of intent to create a trust relationship- intent to
          vest the beneficial ownership in a third person; for ex: where grantor conveys prop to a
          grantee to hold “for the use and benefit of another”
          -Jimenez v. Lee- ct held trust was created although donor did not expressly direct def to
          hold gift “in trust”- very clear that trust was created for educational needs of pl; ct also
          held def liable violating his duty to the beneficiary by def’s attempt to broaden his powers
          over the trust by investing the funds as custodian; def/trustee failed to maintain accurate
          accts-duty to identify expenditures and prove they were for the purpose of benefi’s
          interests- burden on trustee to prove he did so and all doubts resolved against trustee
          -precaratory words alone usually do not create a trust; words such as hope, wish, desire
          or recommendation; such words may create a trust only if it is found that the transferor
          intended to create enforceable obligations
          -promises to make a gift in the future is not an enforceable trust; see Unthank v. Rippstein
          where ct held that although settlor made an express intention to make monthly gifts, the
          writing was no more than a promise to make future gifts and as such is unenforceable-
          promise to give cannot be tortured into a trust declaration
          3. Necessity of Trust Property
          -trust cannot exist without trust property-may be as small as one cent or it may be any
          interest in property that can be transferred; or anything that is referred to as property (life
          ins. policy, contingent remainder, leasehold interests)
          -the trust property, both at the time of its creation and throughout the existence of the
          trust, must normally be in existence and must be definite or definitely ascertainable
          -trust prop may consist of real or personal property, an interest in an intangible such as
          patent, copyright, an equitable interest, a contingent interest
          -the mere expectancy of interests cannot be held in trust; ex a person who expects to
          receive prop from a devise under a will cannot put that prop in trust
          Contract to Make a Trust
          -general rule is that trust corpus must exist at time trust is created- exception to this
          general rule is that if the settlor receives consideration for declaring a trust of property
          expected to come into existence in the future then a trust will be found to exist once the
          prop in fact comes into existence–in other words, a contract to make a trust will be
          specifically enforced, but all other requirements for contracts (incl consideration) must be


                                                   -31-
       satisfied
                see Brainard v Commissioner where S declares a trust of his profits from stocks
                for the following year; profits to be distributed to his family, after deducting amt
                for his services; when testator declared the trust it was invalid bec no profits at
                that time, so can trust be upheld under an enforceable contract to hold future
                profits in trust= no, because no consideration** ct noted that if S had been given
                consideration for declaring a trust of future profits then a trust would have
                attached to the profits when they came into existence
       Destruction of Trust Property
       -a trust ends with the destruction of trust property

E. Types of Trusts
1. Intervivos Trust by Declaration of trust
       -settlor declares that he holds certain property in trust- settlor is the trustee
       -for real property- settlor must either deliver the property or execute a deed of gift
                statute of frauds requires that a written instrument
       -for personal property- settlor only need to manifest an intention to hold the property in
       trust- oral declaration of trust is valid- for example O orally declares herself trustee of 100
       shares of stock with the duty to pay income to A for life and remainder to B upon A’s
       death- this is valid declaration of trust- no delivery of stock is required and since stock is
       personal property, no written instrument is required.
2. Intervivos Trust by Deed of trust
       -settlor transfers property to another person as trustee
       -if settlor is not the trustee of an intervivos trust, a deed of trust is necessary.
       -to bring the trust into being, the deed of trust or the trust property must be delivered to
       the trustee
3. Testamentary Trust- settlor obviously cannot be trustee
       -trust becomes effective only upon and by reason of the death of the settlor
       -must meet the will act formalities for the trust to be created
       -transfer occurs at death; supervised by probate ct
       -not testamentary when beneficiary’s interest is created during the settlors lifetime so
       always look to see if benef has an interest during settlors lifetime to determine intervivos
       or testamentary trust
       Requirements for testamentary trust
                1. Only a valid will can create a testamentary trust of real and personal prop
                2. It is not necessary that the will name a trustee, a trustee will be appointed by a
                ct if necessary
                3. All elements of trust (intent to create a trust, purpose of trust, identification of
                beneficiaries, and trust res) must be ascertainable either from the face of the will
                or from the face of the will and an existing document properly incorporated by
                reference and/ or the facts which have ind significance apart from the intended
                testamentary disposition
4. Resulting Trusts - a trust that arises by operation of law in one of two situations


                                                 -32-
        a. Where an express trust fails or makes an incomplete disposition
        b. Where one person pays the purchase price for the prop and causes title to prop to be
        taken in the name of another person is not a natural object of the bounty of the purchaser;
        referred to as a purchase money resulting trust
        -resulting trusts bec they arise under operation of law are not subject to the statute of
        frauds
        -once a resulting trust is found the trustee must reconvey the prop to the beneficial owner
        upon demand (unlike most trusts where trustee holds and manages prop for benef)

5. Constructive Trusts-also a trust that arises by operation of law and not by the express terms of
       an instrument
       -usually employed to prevent unjust enrichment; when prop has been acquired in
       circumstances that the holder of legal title may not in good conscious retain the beneficial
       interest, equity converts him into a trustee (fraud, murder of testator)
       -constructive trustee under duty to convey the prop to another on the ground that retention
       of the prop would be wrongful
       -four elements usually needed for imposition of a constructive trust, however all 4 not req
       1. A confidential or fiduciary relationship
       2. A promise, either implied or express
       3. A transfer of prop in reliance on the promise
       4. Unjust enrichment of the transferee
6. Precartory Trust- not really a trust, but an oxymoron- settlor imposes a moral obligation on
       an ind to dispose of prop; not a legal obligation: ex- I leave my estate to X hoping he will
       care for my sister- only a precatory trust- not a legal trust
7. Revocable Trusts
       1. Purpose- to avoid probate; avoids probate bec legal title passes to the trustee and there
       is no need to change the title to the trust assets by probate administration on settlors death
       2. Generally- revocable intervivos trust have come into widespread use
       - revocable intervivos trust is the most flexible of all will substitutes bec donor can draft
       the dispositvie provisions and the administrative provisions to the donor’s liking
       -power to revoke must be written in provision otherwise trust is irrevocable
       -no tax benefits; settlor is taxed re income in revocable trusts
       3. The terms of a revocable trust may call for the distribution of the trust assets at the
       settlors death; or may provide for the main vehicle for the disposition of the settlors
       estate, either outright or further in trust after his death; assets in the settlors probate estate
       can be poured over into the revocable trust to bring about a uniform disposition of the
       settlors prop
       A. Revocable Intervivos Trust Involving a Deed of Trust
       -settlor transfers legal title to prop to another person as trustee pursuant to a writing in
       which the settlor retains the power to revoke, alter, or amend the trust and the right to
       trust income during lifetime
       -on settlors death, the trust assets are to be distributed or held in further trust
       -settlor may also reserve an income interest and a testamentary power of appointment


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-settlor can also name himself as trustee
B. Revocable Declaration of Trust
-settlor declares himself the trustee for the benefit of himself during lifetime, and names a
successive trustee to take over with the remainder to pass to others at his death;
beneficiaries automatically accept prop at his death
-to enforce revocable declaration of trust as an intervivos trust, the beneficiary must have
some identifiable prop interest; see Farkas v. Williams- settlor purchased stocks and
instructed the Investors Mutual to use the stock in his name as trustee for Williams; terms
of the trust gave S as settlor power to revoke, amend, and power to change benef, also
gave him as trustee the power to vote, sell, redeem, exchange, or deal stock; and gave him
as benif the income for life, and proceeds from sale of stock ; trust gave Williams title to
stock after settlors death; ct addressed two issues
1. whether the said trust created a valid intervivos trust when it gave benef title only after
settlors death- if no interests passed to Williams before the death of Farkas, the intended
trust is testamentary and invalid for failing to comply with wills- ct determines that
Williams did have an interest in trust prior to Farkas’s death, although not really definable
2. Whether settlor retained so much control over trust to render it testamentary; well
settled rule that the retention by the settlor of the power to revoke, even when coupled
with reservation of life interest does not render the trust inoperative for want of execution
of a will, settlor naming himself trustee with numerous powers does not make the trust
testamentary, one factor to consider is to look at the formality of the transaction (restate)
Ct held that Farkas did create an intervivos trust although testamentary in look
C. General Characteristics of Revocable Trusts
1. Revocable trust assets is taxable to settlor regardless of to whom it is paid bec settlor
retains power to revoke- no fed tax adv to creating a RT
2. RT can be used in planning for the contingency of incompetency- settlor can be co-
trustee providing that either trustee alone may act on behalf of trust or may provide that
other trustee acts if settlor /co-trustee becomes incompetent
3. Income and principal from RT can be disbursed to benef much quicker than through
probate- usually takes 18 months to 2 years to probate an estate
4. In probate there is a short stat of limitations for creditors, this is not the same for
trusts; statute of limitations for a RT are typically those that apply to whatever claim is
being made
5. Elective share statute does not extend by statute to RT- cts have exercised equity
powers to permit the SS to reach assets in a revocable trust; see Seifart v. Southern
National Bank of SC- ct found trust invalid and illusory bec settlor retained so much
control; ct held assets in RT will be included in decedents estate for calculation of
elective share; see also Sullivan v. Burken- ct held in future the estate of a decedent shall
include value of assets of R intervivos trust created by deceased where deceased retained
so much control for purposes of elective share; if trust was irrevocable, then not included
in estate
6. Intervivos trust- no need for ct involvement; comes into being w’out ct order
7. Testamentary Trust- trust created by will, comes into being by an order of the probate


                                        -34-
       ct that supervises the administration of the estate
       8. Unlike wills where real prop must be probated in the jurisdiction where it is located,
       all prop in a trust (real and personal) is distributed in one jurisdiction
       D. Creditors and Trusts
       -usually creditors can reach maximum amount settlor /trustee could get from the trust
       -creditors can not require debtor to revoke the trust
       see State Street Bank and Trust Co v. Reiser- bank seeks to reach assets of an intervivos
       trust in order to pay a debt to the bank owed by estate of settlor of trust; ct holds bank can
       reach those assets since there wasn’t enough in estate to cover the debt but creditors can
       only reach max amt trustee could pay to settlor under the terms of the trust
       -Rule from case- where person place prop in trust and reserves the right to amend or
       revoke or to direct disposition of principal and income, the settlors creditors may,
       following the death of the settlor, reach in satisfaction of the settlors debts to them, to the
       extent not satisfied by the settlors estate, reach those assets owned by the trust over which
       the settlor had such control at his death as would have enabled the settlor to use the trust
       assets for his own benefit- creditors can satisfy debts from that prop over which the
       debtee retains power of appointment over
       ***traditional rule is that creditors cannot obtain debts from trust assets once
       settlor dies; only can go after probate estate (State St Bank is minority rule***

8. Revocable Trusts and Life Insurance Policies
      -ind has control over policies during their life, some people don’t want the proceeds just
      paid out (usually if benef are children’s) so they will create a life ins trust
      -life insurance trust is created when insured does not wish for proceeds to be directly paid
      out- insured will create a trust by appointing a trust co the payee of the life insurance
      policy and subsequently drafting an agreement to create an intervivos trust where trust co
      is trustee for life ins trust; the trust res is the contract which gives the trustee the
      contingent right to receive the proceeds of the policy, trustee is then to distribute the
      proceeds under the terms of the trust for the beneficiary- usually the insured’s spouse and
      children- most likely children
      -a revocable life ins. trust created prior to death of settlor is not testamentary even though
      the settlor retains right to revoke or change it
      -when insured dies, the proceeds are paid to trust co to fulfill terms of trust- manage
      proceeds and pay income accd’g to terms
      -because trustee has no trustee duties until insured dies, question arises as to why this is
      considered an intervivos trust- uniform rule is that the policy is the intervivos trust- policy
      is a contract whereby the trust property is a contract promise with consideration even
      though not concrete assets placed into trust- insurance co’s promise to pay out the
      proceeds is the trust property
      -an intervivos revocable trust must be revoked accd’g to its terms- insured may not
      revoke life ins trust by will; see Connecticut General Life Ins Co. v. First National Bank
      of Minneapolis where insured created life ins trust and named wife as benef - he later
      divorced, remarried and executed a new will that stated he revoked all prior wills and


                                                -35-
       trusts; and his new wife was benef; ct held this was not a valid revocation of the trust
       since the trust contained its own terms for revocation (terms usually require written notice
       to trustee; furthermore, the divorce decree did not revoke under revocation by operation
       of law bec this is not a testamentary trust; and wills are usually only changed by operation
       of law
       see also Cook v. Equitable Life Assurance Society; ct holds that beneficiary of a life ins
       policy cannot be changed by testators intents expressed in his will; changing by will alone
       is ineffectual; ins co has specific requirements for changing benef so they are not
       subjected to claims; ct states there are three exceptions- 1. If ins co waives strict
       compliance with its own terms, 2- if beyond the power of the insured to comply with
       literally with the regulations, a ct of equity will treat the change as having been legally
       made, or 3- if the insured has pursed the course pointed out by the laws of the ins com
       and has done all in his power to change the benef but died prior to completion, then ct of
       equity will allow change (kind of like substantial compliance- insured did everything he
       could do)
                A. Unfunded Life Insurance Trust
                -the only fund of the trust is the life ins trust; no other funds or assets have been
                added to the trust
                --unfunded trust has ind significance since it disposes of nonprobate assets- the
                life insurance proceeds
                B. Funded Intervivos Trust
                -if the settlor adds other assets to the life insurance trust
                -funded revocable trust has independent significance bec the trust instrument
                disposes of the assets transferred to the trust during life
9. Totten Trusts
       -settlor deposits money in a bank acct as trustee for another person, usually their child or
       another child
       -unlike every other trust, these trusts begin with a presumption that it is revocable- see
       Wildrer v Howard
       -any withdrawal on the acct operates as a revocation of the trust to the extent that such
       withdrawal
       -trust becomes irrevocable either when depositor dies, or does some unequivocal act or
       declaration, such as delivery of the pass book or notice to the benef
       -the benef will be entitled only to the amt remaining in the acct after the testator dies; not
       the original deposit -benef has no legally enforceable claims during lifetime of the
       depositor; cts consider these as tentative trusts that don’t come into being until depositor
       dies
       -creditors can usually reach these trust; possibly even a surviving spouse choosing to take
       elective share either under augmented estate or in a juris where some nonprobate transfers
       will be inc in probate estate for elective share purposes (see Sullivan)
       -if benef dies before depositor the trust is terminated
       -trust is automatically revoked if all money is withdrawn from the acct
10. Pour Over Will or Pour Over Trust


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-often executed at time of will
-residuary clause in will that leaves the residuary as a trust to a trustee
-X sets up a revocable intervivos trust naming O as trustee- X transfers to O his stocks, X
then executes a will devising the reside of his estate to O as trustee to hold under the
terms of the intervivos trust
-useful device where X wants to establish an intervivos trust of some of his assets and
wants to merge after his death his testamentary estate and other assets into a single
receptacle subject to unified administration
        A. Validating a Pour Over Will/Trust
        1- Incorporation by Reference - a will can incorporate by reference a trust
        instrument in existence at the time the will is executed, but it cannot incorporate
        trust amendments made after the will is executed; legal effect is to make the terms
        of the intervivos trust part of the will
        2- Doctrine of Independent Significance- will may dispose of property by
        referring to some act that has significance apart from disposing of probate assets-
        by reference to an intervivos trust that disposes of assets transferred to the trust
        during life- the doctrine requires that the trust be in existence as a legal entity at
        the time of the testators death-not at time will is executed (note the diff between
        this doctrine and incorporation by reference- independent sign requires that the
        intervivos trust have assets transferred to it during life; incorporation by refer
        requires that the trust instrument be in existence at the time will is executed)
        -under doct of ind sign- the assets poured over into the intervivos trust, like the
        assets transferred to the trust during life, are subject to the terms of intervivos
        trust- the will can pour over assets to the trusts as amended after the execution of
        the will (unlike incorporation by ref)
        3- Uniform Testamentary Additions to Trust Acts (1990)
        -a will may validly devise prop to the trustee of a trust established at time of will
        or established after the will is executed; prop is administered accg to terms of the
        trust including any amendments to the trust; act does not require that the trust res
        be more than nominal or even existent
-see Clymer v. Mayo- decedent created intervivos trust at same time she executed will; ct
held that although the trust was not funded it was still valid- cl rule is that trust can be
created only when a trust res exists; however the Mass statute which mirrored the act
above creates a valid trust, funded or unfunded, if the trust is identified in the will and the
terms of the trust are set forth in writing either before or concurrently with the execution
of the will.... regardless of the existence, size, or character of the corpus of the trust
In Mayo, decedent created two trusts; trust A was designed as an estate tax marital
deduction leaving Mayo (husband at time created) the benef- bec they got divorced, the
trust must either be terminated or reformed because its purposes have become impossible
to achieve that the settlor did not contemplate continuation of the trust under the new
circumstances- ct uses statute of revocation by operation of law which states property
prevented from passing to a former spouse bec of a revocation by divorce shall pass as if
a former spouse had failed to survive the decedent (it would be inequitable to hold that


                                         -37-
       under will, prop is revoked to divorced spouse but not revoked in the pour over trust since
       testator was disposing of his prop in one common scheme)
       -ct also held that Mayo was not entitled to Trust B for same reasons and although trust
       had independent significance at time of its creation, the trust had no practical significance
       until testators death-trust and will were integrally related components of a single
       testamentary scheme-for practical purposes, the trust like the will spoke only at decedents
       death- for this reason, Mayos interest was revoked by operation of Mass stat at the same
       time his interest in decedents will was revoked
       I. Unfunded Revocable Life Insurance Trust and Pour Over Will
       -the residuary of the decedents probate estate may transfer to the unfunded revoc life ins
       trust which would then become funded

Revocation of Trust by Divorce-
       -many states have enacted statutes which provide that divorce revokes any provision in a
       revocable trust for the spouse, who is deemed to have predeceased the settlor
       UPC provides that divorce revokes dispositions in favor the divorced spouse in revocable
       intervivos trusts as well as in other revocable will substitutes such as life ins, pension
       plans ...; also revokes any provisions to any relative of the divorced spouse
Revocable Trusts and Ademption
       -does the doctrine of ademption by extinction apply to a specific gift of real estate
       contained in a revocable trust as it would had the specific gift been in a will
       -doctrine of ademption states that if testators will devises a specific gift and testator sells
       that item w/out changing the will, the gift is adeemed and the devise fails
       -in Wasserman v. Cohen the question was presented to the ct when settlor gave benif bldg
       in trust but settlor sold the bldg, pl sought the proceeds from the sale of the bldg, ct held
       that a trust, when executed as part of a comprehensive estate plan should be construed
       accd’g to the same rules traditionally applied to wills; ct concludes that doctrine of
       ademption applies to trusts, and the gift is adeemed
11. Spendthrift Trusts/ Creditors Rights
       -spendthrift trusts are created to keep prop in the family
       -benef cannot voluntarily alienate their interests nor can creditors reach their interests
       -created by imposing disabling restraints upon the benef and their creditors
       -a disabling restraint takes form of a spendthrift clause that states “A may not transfer and
       A’s creditors may not reach prop”
       -recognized in almost all jurisdictions
       -in most juris , trusts are not ST trusts unless the settlor expressly inserts a ST clause
       -although usually not reachable by creditors, the interests of a benif can be reached in
       satisfaction of an enforceable claim against the benef by the wife or child of the benef for
       support or by wife for alimony-see Shelley v. Shelley-); public policy requires this rule-
       and disbursements were left in discretion of trustee–Restatement has instituted this rule
       -Exceptions to General Rule of ST trusts
       1. ST trusts cannot be set up by settlor for settlors benefit to avoid creditors- creditors of
       settlor can reach the settlors interest in income or principal


                                                -38-
                  -in a mandatory trust if the settlor is entitled to income the settlors creditors can
                  require the trustee to pay the interest to them
                  -in a discretionary trust, creditors can reach the max amount trustee would pay to
                  settlor for settlors benefit
         2. Judgements for child or spousal support can be enforced against benef interests in ST
         trusts (see Shelley v. Shelley)
         3. A person who has a furnished necessary services or support can reach benef interests
         in ST trusts
         4. US or State can reach benef interests to satisfy a tax claim agst benef
         5. In some states, creditors may reach benef interests after income is satisfied for benef
         support and education
         6. In few states, creditor may receive a % of income in ST trust in garnishment
         proceedings
         7. Questionable whether tort creditors may reach income
         8. Creditors can reach pension plans that set up by state and local govt but pension plans
         under ERISA which requires that benefits are in ST trust cannot be reached by creditors
         although children or spouse may reach ST pension plans under ERISA
         9. In a maj or juris a ST restraint may also be imposed upon a remainderman who
         receives a remainder interest in trust, if restraint is on remainders interest; his creditors
         cannot reach the principal of trust until the remainderman is entitled to receive the
         principal
12.   Support Trusts
         -requires the trustee to provide for benef’s support, maintenance and education
         -these duties are mandatory on the trustee; no discretion
         -creditors of the benef cannot reach a support trust; exception is suppliers of necessaries
         may recover through the benefs right to support
13.   Discretionary Trusts
         -gives trustee discretion to pay over income or to withhold it completely
         -cts cant compel trustee to exercise discretion
         -benef nor his creditor can compel trustee to exercise his discretion to make payment
         -key to discretionary trusts is that benef has no interests until the trustee exercises
         discretion, unlike a mandatory trust where a benef has a vested interest
         -the more absolute the discretion, the more leeway a ct gives a trustee, usually held to a
         good faith std
         -if discretionary trust has clause that says “must be paid out in case of emergency” benef
         can bring a suit against trustee to exercise his discretion
         -Rest requires the trustee to act in the state of mind as the settlor
14.   Mixed Trusts- most popular
         -mandatory and discretionary terms incl in the trust
         -ex to X for his comfortable support; trustee given discretion to determine comfortable
         support; does trustee take into acct other assets of benef to determine his needs
15.   Trusts for the State-Supported
         -if trust is established for support of another and that ind is receiving medicaid the


                                                  -39-
      question arises whether the trust benefitting that ind can be counted as resources available
      for the support of that ind
      -fed law draws a distinction between self-settled trusts and trusts created by third parties
      for the benefit of the ind
      -Self-Settled Trusts and Medicaid
      - a trust is created by ind applicant if assets of the ind were used to form all or part of the
      corpus of the trust and the trust was established by the ind, his spouse or by a person or ct
      with legal authority to act on behalf of the ind or ind’s spouse- -if the trust is revocable by
      the ind, the corpus and all income from the trust are considered resources of the ind
      -if the trust is irrevocable any income or corpus which under any circumstances could be
      paid to or applied for the benefit of the ind are considered resources of the ind
      -therefore, in a discretionary trust the medicaid applicant will be deemed to have
      resources in the max amt that could be distributed to him, assuming full exercise of
      discretion by the trustee in his favor
      -Two exceptions
               1. A disc trust created by the will of one spouse for the benefit of the surviving
               spouse is not deemed a resource of the surviving spouse
               2. If a trust is established for a disabled ind from the ind’s prop, his parent,
               grandparent, guardian, or by a ct, and the trust provides that the state will receive
               upon the death of the ind all amts remaining in the trust up to the amt equal to the
               total medicaid assistance paid by the state, the trust will not be considered a
               resource available to the medicaid recipient
      Trusts Established by a Third Person and Medicaid
      -the trust income or principal is considered available both when actually available and
      when the applicant or recipient has a legal interest in a liquidated sum and has the legal
      ability to make such sum available for support and maintenance
      -thus if a mandatory or support trust is created, where ind has legal right to trust assets,
      such income is treated as a resource available to the benef but if a disc trust is created,
      giving the ind no legal right to trust assets, the trust is not considered a resource available
      to the ind in applying for medicaid unless it was intended to be used for the inds support
      Supplemental Needs Trust
      -discretionary trust designed to provide for needs that medicaid does not cover
16. Charitable Trusts
      -trust designed for charitable purposes; must qualify as a charitable trust
      -usually defined as charitable when purpose is to benefit, improve, or uplift mankind
      mentally, morally, physically or spiritually; purposes incl relief of poverty, improvement
      of govt, advancement of religion, education or heath, and other goals that benefit the
      comm
      -huge tax incentives to create charitable trust
      -charitable trust cannot be made for identifiable beneficiaries such as X, Y, and Z rather
      must be created for a class that is definite; that is it must be large enough so that the
      comm in general is affected and interested in the enforcement of the trust, but must not
      include all of mankind; within this class, the specific persons to benefit from the trust


                                                -40-
must be indefinite
-charitable trusts are not subject to RAP; in essence they can live forever
-Charitable trusts are enforced by attorney general of the state (unlike private trusts)
Restatement- purpose of charitable trusts
-relief of poverty
-advancement of education
-advancement of religion
-promotion of health
-govt or municipal purposes
-other purposes for benefit of community
-Charitable trust must be distinguished from a trust that is for mere benevolence (a nice
thing to do)
         Ex: give to a specific group, this may qualify as a charitable spouse if group is
         identified as impoverished or if trust is for educating the particular group , but if
         you just make a trust for a group such as a political party w/out any of the above
         charitable purposes, it is considered mere benevolence
-Can’t make a trust for political party but will qualify as a charitable trust if is one that is
for education of that political party
-Always look to see whether trust really serves public benefit
- if trust is determined to be invalid for lack of charitable purpose, the assets go back into
estate
-Once trust is established as a valid charitable trust; money is disbursed but at many times
trust may become impossible or difficult to serve the purposes, say for ex if the trust is
outdated; in this case usually recipient seeks to reform the trust
-recipient may request Ct to exercise its CY-Pres Power where ct reforms charitable
trust
-Requirements for ct to exercise Cy-Pres Power
1. Trust must be charitable
2. Trust must be impossible or impracticable to achieve purpose
3. Ct looks to settlors general charitable purpose/intent
4. If ct finds that settlor’s purpose was more general than specific, ct will look to see
what use can be designated that is as close as possible as original gift
         ex: settlor makes trust for tuberculosis patients treated in a solarium- if
         tuberculosis patients are no longer treated in a solarium but rather in an outpatient
         facility, the ct will exercise its cy-pres power and use trust for tuberculosis
         patients in outpatient facility== the key is the settlors intent; if specific ct will
         most likely not exercise cy pres power
5. If trust has alternative gift, ct may not exercise Cy Pres Power
Charitable/Discriminatory Trusts
-what if settlor creates charitable trust in a discriminatory way
-ex: scholarship trust restricted by race, religion, gender etc
-remember charitable trusts are enforced by state but does this qualify as state action
under EPC


                                         -41-
       -usually not held unconstitutional under Equal Protection challenge bec although
       enforced by state , not considered state action, merely enforcing trust set up by private
       party; however the state itself could not set up such a trust

Modification and Termination of Trusts
       -if settlor and all benef consent, a trust may be modified or terminated; trustee can’t
object
       -if settlor dies, cts may modify a trust if all benef consent
       -Restatement– where all the purposes of the trust have been accomplished and all benef
       consent, the ct may declare a termination of the trust; but limited to very few
       circumstances
       --Rest also states if there are circumstances that the settlor did not foresee and these
       circumstances would defeat or substantially impair the accomplishment of the purposes of
       the trust the ct can direct or permit the trustee to do acts which are not authorized by the
       terms of the trust
       -but may not terminate or modify a trust merely bec such deviation would be more
       advantageous to the benef than a compliance with such discretion see In re Trust of
       Stuchell where ct determined that modification was solely for the advantage of the benif
       and refused to modify the trust
       -but see Hamerstein v. Commerce Bank of Kansas City where ct modified term of trust
       paying benef 150 per mth to 2000 per mth, the trust prop had grown substantially bec of
       interest earning on the trust; must first determined whether purpose of the trust has been
       satisfied; this is known as the CLAFLIN RULE- a trust cannot be terminated or modified
       if the terms of the trust have not been accomplished, meaning that the settlors material
       purpose has not been obtained, even if all befen consent= if determined that CLAFLIN
       RULE is satisfied, then stat in this case says that must determine whether modification
       will benefit any minor, unborn or unascertained children= if yes then trust may be
       modified; in this case ct determined that there were no unascertained benef and allowed
       trust to be modified
       -Certain Trusts will not be terminated or modified under CLAFLIN rule
                -spendthrift trusts
                -support trusts
                -discretionary trusts
                -postponed enjoyment trusts
                -trusts where benef must reach a certain age
       -if provision in trust for education and once satisfied to X for maintenance and support,
       comfort for the remainder of his live, and X seeks modification, ct will not allow bec it
       said for remainder of his life and since he is still alive, the trust has not served the
       material purpose of the settlor - see In re Estate of Brown




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