Wills and Trusts with Wendell 1/9/06 Who gets the decedent’s property? Two hurdles. 1. You don’t think you are going to die. 2. You don’t have any valuable property. First have to calculate what is the decedent’s property. Testate means you die with the will. Person who writes the will is the testator or testatrix. If you die without a will you die intestate. When Wendel dies, an administrator, or executor, or personal representative is appointed to handle the estate. What is the personal representative’s job? First he must inventory the assets. Then have to deal with creditors (give public notice). Then finally must distribute the assets. Now we are really jumping to step 3 of the personal representative’s job. Who gets your property? 1. Depends if the property is probate or non-probate. The default is that every goes to probate unless you take affirmative steps to opt out. The non-probate intrinsically answers who gets the property. One way of opting out is joint tenancy. When one joint tenant dies their property interest is extinguished. Basically any property that passes at the time of death must go through probate. With joint tenancy no property is passing, each party owns the whole thing. The person who dies has their rights extinguished. A second way of opting out of probate is a life insurance policy. A life insurance contract is generally a 3 rd party beneficiary contract with a payment on death clause. At common law it must be a life insurance contract to qualify as non-probate, but modern trend we will ask if any 3 rd party beneficiary contract with a payment on death clause fall out of probate. The 3rd way to opt out of probate is with life estates and remainders (possessory estates and future interests). The 4 th way to opt out is by trust. Who takes your probate property? Depends if you die testate or intestate. The default is intestate, you have to execute a valid will to opt into testate. You can die testate and intestate, if your will does not address an issue. Three types of gifts in a will: 1. Specific gifts are where there are only one item in the world that matches it (my wedding ring). 2. General gifts are like money. 3. Residuary clause gives all remaining property to something. If the will has a residuary clause then you generally can’t die intestate. If a will does not have a residuary clause (I give the rest, residue, and remainder of my estate to X), it is almost impossible for the will to cover every thing. We will first start with the CA intestate scheme. 1/11/06 Issue is: Who gets your property when you die? First it depends on whether the property is Non-Probate or Probate. First look for non-probate stuff. The statute (6400) only applies to the probate estate. Historically there are 4 types of nonprobate stuff. 1. Joint Tenancy, 2. Life insurance policy (contract with a payment on death clause), 3. Intervivos (created during ones death) trusts, 4. Possessory estates and future interests. If property does not qualify as non-probate, the it falls into probate. If it falls into probate then who takes it? It depends on whether you die testate (with a valid will) or intestate (without will). Any property disposed of through will, will be taken care of by the personal representative. Any property not disposed of via will, will be disposed of via intestate succession. Under intestate the first taker is the surviving spouse. How much do they take? It depends on whether the property is community property, quasi-community property, or separate property. The surviving spouse takes half of community and quasi-community property. Community property is any property acquired as a result of the earnings of either spouse during the marriage. The act of marriage does not change the characterization of property acquired prior to the marriage. If a married person inherits or is devised money, that is separate property because it is not considered earnings. Inherit means that decedent died without will and money passed though intestacy, if a person dies with a will they devise property to a devisee. Any gifts, inheritances, or devises are separate property. Quasi-community property: If you are married in a non-community property state then every dollar you earn is still considered separate property. We classify property at the time of acquisition. If you then move to a community property state, then any money that is separate property but would have been community property had they lived in the community property becomes quasi-community property. When community property is earned it is owned half and half. When husband dies his half of each community property asset goes into probate. The wife’s half does not go into probate. Of the husband’s half that goes into probate, the surviving spouse gets 100% of it. If husband has a will then he can devise his half of community property to anyone he wants. But according to the statute (6401), if husband does not devise the community property then the surviving spouse takes 100% of the decedent’s half. As far as separate property, who gets the decedent’s separate property? It depends. There are 3 possible amounts the surviving spouse can get. 100%, 50%, 33%. What is the difference between children and issue. Children is just one generation, issue is your children or your children’s children and so on. 100% when there is no surviving issue, parent, or issue of parents. 50% when there is one child* or no issue but parent or issue of parent. * -- person qualifies as a child if they are alive or if they are dead but survived by issue (at the time of decedent’s death). 33% when there is more than one child*. When we talk about spouse, we must also realize that domestic partners in CA now are treated exactly as spouses. 1. To surviving spouse/Domestic Partner. If none, or then the separate property that doesn’t go to the spouse then goes to: 2. Issue (equally) 3. Parents (equally) 4. Issue of Parents (equally) 5. Grandparents (equally) 6. Issue of grandparents (equally) 7. Issue of a predeceased spouse (equally) 8. Next of kin (equally) 9. Parents of predeceased spouse 10. Issue of parents of predeceased spouse 11. Escheats to state 6402.5 kicks in when the community of both spouses dies. It doesn’t allow all the property go to one side of the family. Wendel calls it the recapture doctrine (CA only). The recapture doctrine kicks in if there is no surviving spouse or no surviving issue, then we stop and ask if there was a pre-deceased spouse. If the answer is “no” then keep going to number 3 above. If the answer is “yes” then we recapture all the qualifying property the second spouse received by virtue of the first spouse’s death. So we need to know what constitutes qualifying property? If it is real property it is qualifying property if the spouses died within 15 years of each other. If it is personal property there are three requirements: 1. spouses died within 5 years of eachother; 2. there is a written record of ownership; 3. as an aggregate the property that meats the first two requirements is $10,000 or more. If there is qualifying personal property then we will recapture it only if there are qualifying takers. Qualifying takers are 1) issue, 2) parents, 3) issue of parents. If there are none of those three then don’t recapture anything. 1/13/06 Definition of Child* -- Surviving child or child that is dead but survived by issue. To overlap the recapture doctrine on the whole thing. If there is no surviving spouse or surviving issue then we go to it. Ask if there is a pre-deceased spouse. If no, then go back to the list. If yes then we recapture all the decedents qualifying property the second spouse to die received by virtue of the first spouse’s death. Then ask what constitutes qualifying. If real must die within 15 years of eachtoher. If personal then die within 5 years, must be written record of ownership, and the aggregate must be equal or more than $10,000. If yes to this stuff, then all the qualifying property goes to issue of predeceased spouse, if none, then to parent of pre-deceased spouse, then to issue of parent of predeceased spouse. Recapture Doctrine -- With regard to the second spouse to die, the recapture doctrine only applies to their probate intestate property. Doesn’t matter what kind of property it was with regard to the first spouse to die. 1/18/06 Problem Set Again. Back to Problem 3 – In number 4 the only difference is that Wendy dies 3 days later. Is she a surviving spouse. If people die simultaneously then the old common law system causes problems in a jurisdiction with no re-capture doctrine. If someone survives by a millisecond then their family gets everything. The uniform simultaneous death act came along. First version just changed burden of proof from preponderance to clear and convincing. That did not work, the second version said the spouse must survive by 120 hours (5 days). Focus on two requirements, the length of time and the burden of proof. CA has different survival statutes that apply to different types of property. The types are nonprobate, probate testate, and probate intestate. SURVIVAL REQUIREMENT Probate Intestate – Clear and Convincing by 120 hours Probate Testate – Clear and Convincing by millisecond, unless the written instrument does not expressly require longer. Non-Probate is lumped with probate testate. When you see a rule that is in the 21000, that will apply to non-probate and probate. When you see a rule in 6000 then only probate. But still need to see testate or intestate. Put the word surviving in front of each taker, not just spouse. The general rule is that you have to survive the decedent to take any type of property or you lose your right to take. Degree of Relationship is the number of steps you have to go through to connect people, must be blood related. Between parent and child is 1 step. Between grandparent and grandchild is 2 steps. Problem 7. When you get the problem, just cross out people who die. When the property goes to issue equally, what does that mean? Equally has 3 possible approaches: Per Stirpes Per Capita Per Capita Each Generation 1. At which tier do we make our first division? 2. How many shares? We give a share to everyone at that tier who is alive, or dead but survived by issue. One share to each. 3. For the people that are dead but survived by issue, how are those shares going to drop. We can drop by blood line, or we can combine the dropping shares and pool them together. Under per stirpes approach the first division is always at the first tier, even if all are dead. The shares are given to one share for everyone alive, and one share to anyone dead but survived by issue. Under per capita we make the first division at the first tier where there is a live taker. Under per capita next generation the first division is made where there is a live taker. Under all 3 approaches divide the shares to one for each alive, and one for each person who is dead but survived by issue. Dropping shares: Per Stirpes we drop by bloodline. Per Capita we drop by bloodline. Under per Capita next generation we drop by pooling. 1/20/06 When do you stop being spouse? When final decree is issued. What does it mean to Take Equally? 1st question? Where do we make our first division. Per Stirpes Where do we make the first division? How many shares at that first divison? Always at the 1st tier 1 share for each party at that tier who is alive, and 1 share for each party who is dead by survived by issue Bloodline Per Capita 1st Tier where there is a live taker 1 share for each party at that tier who is alive, and 1 share for each party who is dead by survived by issue Bloodline Per Capita Each Generation 1st tier where there is a live taker 1 share for each party at that tier who is alive, and 1 share for each party who is dead by survived by issue Pooling How are we going to treat the dropping shares? Dropping shares are those shares that are cut for people who are dead but survived by issue. CA uses the Per Capita approach as default. If the written instrument adequately expresses the intent to use a different approach, then use that approach. Go say I give my property to my issue per stirpes. What about leave my property to my issue per stirpes and per capita each generation. Then you don’t know what you are talking about so it will go to your issue but in the default way (per capita). I leave all my property to my issue by representation or by right of representation, in CA this means per stirpes, in other states this means per Capita. Problem Set #1 Per Stirpes Approach – Make division at first tier, there are 3 shares, and the dropping shares drop by bloodline. A’s 1/3 will go equally ¼ to each of D, E, F, G. so 1/12 to D, E, F, G. C’s 1/3 will drop to H and I, each get 1/6. Per Capita – Make division at first tier again, there are 3 shares, same dropping as above. Per Capita Each Generation – Make division at first tier again, there are 3 shares, but now we pool the dropping shares. 2/3 total dropping down to 6 people. 1/9 to the grandchildren. Problem Set # 4 Does a son-in-law or daughter-in-law qualify as taker? No. Per Stirpes – Division at first tier, there are 2 shares, and drop by bloodline, so ½ is cut into ¼, then ½ is cut in to ½. Per Capita – First division at grandchildren, 6 takers, each get 1/6. Per Capita Each Generation – Same as per capita. Problem Set #7 Per Stirpes – Make at first division at the first tier, 2 shares, and they drop by bloodline. Who gets a share? Anyone who is alive or anyone who is dead by survived by issue. ½ goes 1/3 to D, E, G. D’s 1/6th gets divided by 3 so 1/18 th to R, S, and T. C’s ½ goes down to only I because I is survived by issue, so ¼ to W and X. Per Capita – Make first division where there is a live taker, here the second tier. E and G alive and D and I dead but survived by issue so 4 shares. D’s and I’s ¼ drop by bloodline. ¼ divided by 3 for R, S, and T. 1/4 divided by 2 for W and X. Per Capita Each generation – Second tier, 4 shares, drop D and I’s shares by pooling. Add those to get a total ½. Those are divided equally by all eligible takers. Here there are 5 eligible takers. Eligible taker is one in the proper bloodline that is alive, or dead but survived by issued. NEXT OF KIN Next of kin is not going down, it is going up and out. There are two different approaches to determining next of kin. 1) Parentelic line approach – This approach says go out by parentelic lines. 2) Degree of relationship – Just count the steps to the person claiming they have a right to take. Back page – Who is the closest common ancestor between the decedent Z? “GF” When going to the right focus on the males, going to the left focus on the females. 2 steps up from Dec to GF, then 3 steps down from GF to Z. Total 5 steps. This is 5 th degree of relationship. In the degree of relationship approach, the people in the closer degree of relationship take to the exclusion of the people in the further degree of relationship. Parentelic approach – Don’t care about degree of relationship, here no one in the first parentelic line is alive, but people in the grandparent’s parentelic line are alive. Z, X and Y are alive and they are next of kin to take equally. In CA we use degree of relationship approach. 1/23/06 On the test, for Probate testate and probate intestate we only need to know CA rules. In parentelic approach, the person in the closer parentelic line wins over those in further parentelic line. Page 4 of the handout. Top Half – degree of relationship – First look for surviving spouse, then issue and down the line. Here the stuff is given out at issue of grandparents. Now how much do they get. In CA how so they take the property? We use per capita approach. At which tier do we make the first division? 2 nd tier, X and Y tier. How many shares? Here X and Y are alive, and C is dead but survived by issue, so 3 shares. Drop the shares by bloodline. So 1/3 to X, Y, and Z. Bottom Half – In this one we have to go to next of kin. In CA we do degree of relationship approach. For this approach, find the person you think will be eligible to take and find the common ancestor. On the right the common ancestor between Dec and Z is GGF. 3 steps up and 3 steps down, total 6 degree of relationship. Between decedent and W is GGGM. W is 5 steps away so he beats Z. Under parentelic, however, Z would win. X and Y is 5 steps, use GGM as the common ancestor. So there are 3 claimants of the 5 th degree. In CA how does it come out? In CA it is degree of relationship with a parentelic tie-breaker. Where you have multiple parties of the same degree of relationship, check the parentlic line. Here X and Y would split 50/50. So CA – next of kin goes degree of relationship with a parentelic tie-breaker. What does it mean to be issue in the first place? If no surviving spouse, then to issue. Children are only 1 generation below the decedent, issue can be multiple. To qualify as an issue you have to establish a parent-child relationship. In CA there are 10 ways to establish a parent child relationship. Common law – there is a natural mother and natural father. One contributes the egg, and the other the sperm. From a social perspective we would like them to be married. Natural Parents, M and F married, then there is a virtually irrebuttable presumption that when the baby is born, the husband is the father. Any time you create a parent child relationship, what does that establish? Inheritance rights are established. Full inheritance rights means the person can inherit from and through the other person. Children can inherit from and through parent, and vice versa. By natural we contrast that with legal via adoption. For the natural parents-married there are full inheritance rights going both ways. Natural parents-not married: On father’s side must show paternity to get inheritance rights. How to do this, 1) court order entered during the father’s lifetime (burden of proof is preponderance of evidence), 2) acknowledgment by father while alive (clear and convincing), 3) show clear and convincing evidence post-death (clear and convincing) Paternity is primarily an issue with respect to the arrow down, but what about with respect to the arrow up? For the arrow up, must also show that you acknowledged the child while the child was alive and support of the child by the parent or a relative of the parent. What if Lulu and Wendel have a child. Wendel denies it, but Wendel’s mother acknowledges and supports the child. The child wins the lottery and dies. Does Wendel take? It is unclear if Wendel or Wendel’s mom gets those rights. So, for the arrow down, the child has to show paternity, for the arrow up the father or relative must show acknowledgement and support. This can also apply to the mother if the mother abandons the baby at birth. Classic Adoption – New born being put up for adoption, two parents adopting. What about anonymous sperm donor? That child will only have one parent for intestacy purposes. If you don’t have the sperm donation and insemination performed by a doctor professionally then you are the father. Legal Adoption – Classic adoption creates full parent child relationship. And upon adoption it severs the relationship with the natural parents. The general rule is complete severance. In CA, we make it more complicated. What about if parents die and then new parents adopt. Here we assume the parents had a meaningful relationship before they died, so we modify the rules for “post-death” adoption. The moment we have the adoption give full inheritance rights. On the other side, we sever the arrow up, but not the arrow down to the child. This is assuming that the adoption takes place postdeath of one or both of the natural parents, and the child had to live with the natural parent in question. Step-parent adoption – Marry a person and then adopt the kids. If the kids are minors the natural parents have to consent. If the new father adopts then that establishes full inheritance rights. Remember this is a scenario where the step-parent is adopting. Only the natural parent of the same gender as the adopting parent is affected. 1) the adoption is by a step-parent, 2) the child lived with the natural parent in question. If so, then we assume the meaningful relation and we cut the arrow up, but leave the arrow down. What if it is a non-step parent adoption. The moment there is an adoption create the inheritance rights. But what effect, if any, on the natural parent of the same gender? Here there is full severance. We punish the child for the sins of the parents. If Gerri and Cupp don’t get married, then full severance. 1/25/06 Inheritance Rights: Married natural parents – Full inheritance from and through both parents Un-married natural parents – Must show paternity to take from father. For the father to take from the child natural father or relative of natural father must acknowledge and support. Adoption: Any time you see adoption that will create full rights from and through the adoptive parent Classic Adoption: Sever ties with natural parent Post-Death: 1) post-death of either parent, and 2) the child lived with the natural parent in question (for some period of time). If this is the case we sever the up arrow only, not the down arrow. Step-parent adoption: 1) Must be step parent adopting, and 2) must have lived with the natural parent in question. 3 arrows down, only 2 up. Adoption by non-step-parent: Here we sever all ties with parent of same gender. o Side rule is if we are overlapping non-step parent adoption with post death adoption, then do what is best for the child General Rule – Natural parent must consent to adoption. Attempted Adoption – 1) relationship (between child and attempting adopting parent) was established began during the child’s minority and continued throughout, and 2) there was clear and convincing evidence that the attempting adopting parent would have adopted but for a legal barrier. If both exist then the relationship with natural parents is not effected, keep both arrows, but then add only down arrow from adoptive parent. This doctrine only applies while the child is a minor, if the child hits the age of majority and is not actually adopted then this doctrine does not apply, because technically (for purposes of this class) there are no legal barriers to adoption once the child hits the age of majority. Are you your mom’s heir? Depends if your mom is still alive. You can determine who heirs are until the person dies. There is a survival requirement for heirs. While mom is still alive, you are an heir-apparent. As an heir-apparent, do I have a right to share in mom’s estate when she dies? No, but there is an expectancy. Technically an expectancy is not a property interest so it can not be transferred, but courts of equity have held that if an heir-apparent transfers an expectancy and it is fair in light of all that has happened, then it will be upheld. Simultaneous death case with tainted Tylenol: First determining if wife survived husband. First is actual survival but what is actual surviving. Common law was irreversible cessation of heart and lung activity. But modern trend is irreversible cessation of brain activity. Here the property at issue was a life-insurance policy, non-probate property so clear and convincing evidence of survival by a millisecond. They said she did survive and it ends up in her probate. In CA this is subject to recapture doctrine. He is predeceased spouse so recapture it. What if will just says my daughter does not take a dime no matter what? Can I negatively disinherit her without affirmatively giving away the property? Common law the statement in the will is worthless, if it got into intestacy then the intestate scheme goes to work. Modern trend statutes may allow it. CA does not have a statute that includes it, but CA likes to say that the intent of the decedent should control. Unclear in CA. Probably common law wins. Half-bloods – Common Law half bloods do not take the same as full bloods, in CA and modern trend says they do. This comes in at the sibling level. Hall case – Mother and Father have 4 kids. Father 2 adopts. Maryland says that Father 1 was severed so kids do not get to take through Father 1. Case: Life estate to kids, remainder to issue. One of the kids does not have kids and realizes when he dies his money will be shifted to his siblings. So he adopts his wife. First issue, can you adopt an adult? Yes. The next issue is do they get inheritance from and through. General rule is that adopted person gets from and through. The court says the from is fine, but the through is not cool. This court said, when an adult is adopted solely to qualify them under an existing testamentary scheme, then they do not get inheritance rights through. Other courts allow full rights. 1/30/06 For a child to inherit from an adult, must show a parent child relationship. Two ways to show that, natural child or formal adoption. In the O’Neil case there was neither, but child tries to invoke equitable adoption. She was treated as a daughter so she should be able to inherit as a daughter. Court says this is not enough. Court says must show 1) an agreement between adoptive parents and natural parents, and 2) full performance by giving up the child from the natural parents, and 3) full performance by the child by living with the adoptive parents and treat them as if they were parents, and 4) partial performance by the adoptive parents by taking child in and treated him/her as their own (called partial performance because the agreement is to adopt the child and technically that entails completing paperwork), and 5) the adoptive parent has to die intestate (with regard to the property in question). If person died with will and said everything goes to my children, then this doctrine would not apply, the decedent’s intent wins, but this doctrine can help the court figure out the intent of the decedent. Decent says the rule should be whether the adoptive parents led the child to believe that he or she was a legally adopted member of the family. This view may become the modern trend. But for now the traditional rule applies. CA says there must be clear and convincing evidence of the intention to adopt in addition to all the five elements. If you meet all the elements of equitable adoption, then you only get a little arrow down, you only get the right to inherit from, not through. This doctrine does not breach the relationship between he child and natural parents and also this doctrine can not be used to get an arrow up to the adoptive parents from the child. Woodward case: Posthumously Born doctrine. Child conceived with natural father, but the father dies before the child is born. Common law says if it is in the child’s best interest, then treat the child as alive from the moment of conception. So child gets to inherit from father as long as the child is alive. If the husband dies before the child is born, then the child inherits as long as it is born between 280-300 days of the fathers death. There is a presumption that the child is from the husband. If born after 300 days then presumption that child is not of the husband. If not married then must show paternity. What about posthumously conceived? This is where father freezes sperm and then dies. Court said you can devise your sperm. Court says keep in mind three things: 1) best interest of children, 2) state interest (cost of administration), 3) reproductive rights of the genetic partner, 4) the potential for fraudulent claims 1. You have to show that the father consented (consent as to what? And can it be implied? One jurisdiction says must be in writing, another says it is presumed based on certain factors.) 2. There must be a time limit, can keep trying to get pregnant. Not sure what the time limit is. 3. Must give notice to the personal representative that this is going on. CA took statutory action. For posthumously conceived child to claim right as heir. 1. Burden is clear and convincing 2. Must be writing from decedent that says sperm can be used to conceive a child 3. Writing must be signed 4. Must be one witness 5. It is revocable only by a writing signed by decedent and one witness 6. Must be notice to personal representative 7. Child must be conceived and in utero within 2 years of decedent’s death There is no mention as to whether it is a full arrow or partial. Language is unclear. So this means the property can be held over for almost 3 years before distributed. 2/1//06 ISSUE: When dealing with issue taking equally, do inter-vivos gifts count against the time of death share? Common Law – Gifts to children were presumed to count. The advancement doctrine – Intervivos gifts were considered an advancement against your share at time of death. Make a hodgepodge and put in all the intervivos gifts and the probate estate. Then divide that equally among the issue. This doctrine applies only against intestate probate property. If an issue has already received more than their share, then they are not forced to give any back, they just don’t participate in the distribution. Modern Trend (CA) is to presume that intervivos gifts are not an advancement, unless there is a writing that indicates the intent of the gift is to be an advancement. The writing can be created either by the donor or the donee. If it is created by the donor it must be contemporeanously with the gift to qualify under the advancement doctrine. The writing does not need to be signed. If created by the donee, the writing can be created at any time. Can make a writing in your will, it will qualify as long as it meets the requirements of a will. What if gift is given to child with a writing saying that it is an advancement, but then the child dies before the mom, and then the mom dies? Does the advancement doctrine apply to the shares going to the issue going to the predeceased donee? The advancement does not apply when the donee predeceases the donor, unless the writing expressly covers that contingency. If issue is a minor, then something has to be done because technically minors lack the legal capacity to hold property. There can be a guardianship that holds it for them. Guardian of the person or guardian of the property. Guardian is supposed to preserve the property for the minor until they reach the age of majority. Modern trend gives the guardian more power. Under the Uniform Gifts to Minors Act, if you meet the requirements you can get a custodianship. There is more power given to the custodian, here they can use the property for any purpose that might benefit the child. Finally, can put the property in a trust. The default is guardianship at common law. Modern trend is conservatorship that is like custodianship. Gerri finds out about Lulu and so she kills Wendel. Who gets the property? Is there certain misconduct that should bar a party that is otherwise qualified from taking? 3 approaches for out of CA (in CA we have a statute): 1. Just goes through normal intestate scheme. 2. Do not take because not equitable, do not profit from wrongdoing. In this approach we legally treat the killer as if they predeceased. 3. Person gets it but only holds as a trustee (constructive trust). Legally the statute says the person takes it, but the court says it is wrong for them to keep it so the property is put in a constructive trust. Legal title goes to trustee (wrongdoer) and equitable title goes to beneficiaries. At some point the trust ends and the trustee gives total title to the beneficiaries. Any time you see unjust enrichment you can petition for a constructive trust. If so, then impose a constructive trust and give it to the right people. Won’t always win the argument. In CA the homicide doctrine will apply as long as the killing is felonious and intentional. There are two types of manslaughter. Involuntary is unintentional killing. In CA if you intentionally and feloniously kill someone, you do not get to take. Treat the person as predeceased. What property does this doctrine apply to? This applies to all property (probate and nonprobate). The issue of whether you take property is not a criminal issue, just a civil issue. Keep in mind res judicada and other issue with Civil and Criminal proceedings. Now what about joint tenancy? Gerri should not be able to get Wendel’s half. By operation of law turn the joint tenancy into tenancy in common and Wendel’s half goes into his probate. What about if Wendel kills his mom? Mom has a will that says my property to my sons. Usually if person dies prior to taking under a written instrument then the doctrine of lapse kicks in. This says that the gift has lapsed because you must be alive to take. But the doctrine of antilapse says that if you are related to the donor and are dead but survived by issue, then give the gift to the surviving issue. In this case Wendel will be treated as predeceased which will kick in the lapse doctrine, then the anti-lapse doctrine will kick in so it seems as if Wendel’s kids get his share. But the CA statute says specifically not to apply anti-lapse, so Wendel’s kids do not take. 2/3/06 What if Wendel kills mom, and mom dies with will that says all to my 4 sons. We still treat Wendel as predeceased and this kicks in the lapse doctrine. Then look for anti-lapse, as long as the intended beneficiary predeceases the testator and is survived by issue, give the gift to the issue if the intended beneficiary meets the requisite degree of relationship. Under CA statute, if person is killed and dies testate, the statute says killer does not take and do not apply anti-lapse. So grandchildren do not take. If person dies intestate, again killer doesn’t take, but the grandkids take under the per capita doctrine. 3rd scenario – Mom’s will says give all my property to 4 sons equally, but in the event one of them predeceases me, all of his share to his issue. Now when Wendel kills mom, the homicide doctrine kicks in and he is treated as predeceased. Technically that kicks in the lapse doctrine. Because of the statute in this case we do not apply anti-lapse. But in this case, Wendel’s kids are not claiming under anti-lapse, they are claiming under the expressed language of the will. So to determine if the killer’s kids take it depends if the killer died with a will or without a will and what the will says. Doctrines: Advancement Doctrine Homicide Doctrine Disclaimer Doctrine Disclaimer Doctrine – a legal renunciation. Not accepting the testamentary gift. Why would you not take the gift? Maybe for tax reasons. A party who disclaims is treated as though they are predeceased. The party disclaiming can not attempt to control or distribute the property. Just treat the disclaimant as predeceased and let the property flow where it would flow based on that treatment. Can you disclaim property under a will. Normally the disclaimer dates back to the date of death, and we determine heirs at the time of death. You can disclaim all or part of the gift. In CA how does disclaimer overlap with per capita doctrine? We don’t want people to sue disclaimer to increase their share. For purposes of the per capita doctrine, treat a disclaiming party as alive for purposes of calculating the shares, but treat them as if they are dead for purposes of distributing the shares. What about disclaimer and advancement? Generally, if the donee predecease the donor then the advancement doctrine does not apply against the share that the donee’s issue would take. But when it comes to disclaimer we don’t want people to increase their share by disclaimer. For purposes of applying the advancement doctrine to a disclaimant, treat the disclaimant as alive for purposes of calculating the share and then treat them as dead for purposes of distributing the share. After class today Wendel hits Kazarian with his car. It was Wendel’s fault. Kazarian sues Wendel and wins a million dollars. Shortly after the judgment Mom dies and she won the lottery. If Wendel gets his share (about a million) then Kazarian will get it. So he wants to disclaim to avoid a creditors claim. This is ok. As a general rule, you can disclaim to avoid a creditors claim. But the govt. plays by there own rules. If the govt. is the creditor then you won’t be able to avoid them. Court will often allow the disclaimer in situations with the government, but then impose a constructive trust and allow the govt. to go after it. WILLS To opt out of intestacy you should have a will. First you need capacity to write a will. A will is valid when you die. We are not as concerned about transfers under a will as we are transfers under a contract. Contractual capacity is higher than testamentary capacity. Testamentary capacity is higher standard than capacity for entering into a marriage. Marriage is low capacity because it is a fundamental right. If you are incompetent to handle your affairs then a conservator is appointed. But, the appointment of a conservator does not mean that you can not execute a will, because conservators are when you lack capacity to form intervivos contracts. There have been cases where a dude gets married and executes a will in the same day, the court ruled the will no good but the marriage ok. Remember different capacity. Testamentary Capacity: Must be 18 years old, and must be of sound mind. 2/6/06 Writing a will. Must have testamentary capacity. For this you must be 18 years old and be of sound mind. To have sound mind (1) you must have general understanding of the nature and extent of your property, and (2) understand who are the natural objects of your bounty (family), and (3) understanding the nature of the testamentary act that you are performing (do you understand what you are signing), and (4) understand how 1, 2, and 3 relate to one another to form an orderly disposition of your property. It is just the capacity or ability to know these four things. For the average person there is a strong presumption that you have testamentary capacity. Even if you have testamentary capacity there are 3 types of defects you can suffer from. 1) insane delusion, 2) undue influence, 3) fraud. If you lack general testamentary capacity we void the whole will. If you have general testamentary capacity but were effected by one of the three things, then void only the part of the will that was effected. If there is an unnatural disposition (not going to family) then more likely to be voided. Who has standing to challenge the will? You must show that if your claim is successful, then you will take some of the property. If you witness the execution of a will and act as the witness, then you are supposed to evaluate his/her sound mind before you sign the will. As the drafting attorney you have a legal and ethical duty to determine if the person has sound mind. But just to your opinion. No need to run tests or anything. What if someone is truly drunk, do they have sound mind to write a will while they are drunk? Generally no. You have to have testamentary capacity at the point of execution of the will. INSANE DELUSION Keep in mind it must be an insane delusion. Not just a mistake. Person thought his wife was cheating so he disinherited her. Insane delusion is when even with all evidence pointing to the contrary, still believe your delusion. This is very fact sensitive. No requirement to attempt to talk a person out of their delusion. Just must have a sense that the person would believe their delusion even will all contrary evidence. Test of insane delusion: No CA statute on insane delusion. This is judge made law. You can argue other doctrines in good faith on the exam. Two approaches: Even if there is some factual basis for the delusion, if an average reasonable person in the testator’s situation could not have reached the same conclusion, then it is an insane delusion and not just a mistake. Minority (CA approach) – Not an insane delusion if there is some factual basis to support it. It is simply a mistake and as a general rule courts don’t correct mistakes. As a general rule, even if there is a defect we strike the will as to that part. Don’t re-write the will. Even if you have an insane delusion you still must show that it effected the disposition. The delusion caused the testator to dispose property in a fashion that he or she would otherwise not. Causation has a split in jurisdictions as well. Can be a “but for” test (majority and CA), other courts say causation may be shown if “it might have affected the disposition.” When trying to attack capacity, it helps if you can show the court some kind of event or injury that changed things for the testator. 2/8/06 On the way to school Wendel sees the bush burning and the bush tells him to give all his money to Pepperdine so they can build a church. Is this an insane delusion? We are much more comfortable applying the insane delusion doctrine to things that are factual and provable. As a general rule we don’t want courts judging people’s religious beliefs. Maybe if it is really out there. Better chance of court getting involved if you hit your head. First look to the natural disposition, basically per capita approach. Then if there is something unnatural about it, it is easier to claim defect. What is undue influence? Basically it is coercion, or is it inappropriate influence? Must show: 1) Testator was susceptible 2) Motive/Disposition to take advantage 3) Opportunity to take advantage 4) Causation Person claiming undue influence has the burden, and the burden is preponderance. Motive is almost always greed/money. The other classic form is revenge. In CA the causation is probably a “but for” test. Every jurisdiction has a presumption of undue influence under certain circumstances. In CA the presumption shifting doctrine is if 1) the alleged influencer was in a confidential relationship, and 2) the alleged influencer was active in the procurement or execution of the will, and 3) the alleged influencer unduly benefits under the will. If these are met then we shift the burden to the alleged influencer. We basically presume causation. Confidential relationship is where one party feels comfortable confiding in the other. Classic ones are attorney/client, and parent/child. Procurement is the drafting of the will. Execution is when there is signing and witnesses signing. For unduly influencing, what is unduly? Do we look objectively what he would have received under intestate scheme and see if he is getting more. Or do we look subjectively at the nature of the relationship and how much he should have taken. In CA we look subjectively at the specific facts. What can testator do to protect intent? Can put in reasons why you don’t give someone money, but not a very good idea, better to write in a private letter and give to attorney. He can pull out if necessary. No contest clause says if you contest any portion of this will you take nothing. As a general rule no contest clauses are valid, but they are construed narrowly. Some no contest clauses only bar contesting in with bad intent (construe narrowly). And some courts won’t enforce the no contest clause. But if you challenge the will and win, then the no contest clause won’t be enforced. When do we not enforce a no contest clause even when the challenger loses? Some jurisdictions say if there is probable cause to support you claim, even if you lose. Other jurisdictions say we limit it to certain types of claims. If the claim is one of these types then we will not subject you to the no contest clause. In CA a no contest clause is not enforced when a person has reasonable cause to bring a claim of type of forgery, revocation, or the interested drafter. And it is also not enforced if there is probable cause and the claim is against a provision which benefits one of the following individuals: person who drafted the will, person who acted a witness, person who gave direction to the drafter. If you are just claiming that the testator lacked capacity then you are screwed unless you win. What if dude gives away all of community property. If wife wants to challenge and say that was not his property, half was mine. This is still considered to be a violation of the no contest clause. 2/13/06 When you strike a portion that was affected by a defect means that property will now fall somewhere. If you have a residuary clause then it will fall into that. If not, then it will fall into intestacy. How to prevent challenges to the will? No Contest Clause If someone says lack of general capacity and wins, then the whole will is out. That means the no-contest clause is out also. Everything falls to intestacy. What about the defects in capacity? There are 4: Insane delusion, undue influence, duress, and fraud. If the challenge is one of the kind that infers wrongdoing by a third party (undue influence, duress, or fraud) and you win, then we assume that the no contest clause is also influenced by the third party. That is why the no-contest clause is out. If you make another challenge (delusion, improper execution, etc.) and you win the no-contest clause will be enforced against you, unless you fall in one of the two exceptions. 1st set of exceptions are forgery, interested drafted, revocation. The burden of proof is that you need reasonable cause to assert the claim and you fall within the exception, even if you lose we will not enforce the no contest clause against you. The other set of exceptions is you bring any claim against anyone that was involved in the drafting or execution of the will, as long as you have probable cause to support that claim then we will not enforce the no contest clause against you. Remember, we only care about capacity at the time of execution of the will. As a general rule, sex can be used and is relevant to show undue influence. Typically more so in an untraditional (unmarried) relationship. What about a lawyer receiving a testamentary gift from a client? Does it make a difference whether the attorney is also the one who drafts the will? If you have a will, and then later obtain a spouse or kid we presume that you intended to change your will to provide for the spouse and/or kid but just never got around to it. The spouse or kid is called a pretermitted spouse or kid. What are the different ways of proving undue influence? P has the burden of proving the 4 elements. But every jurisdiction has a 3 element approach which, if satisfied, will shift the burden of proof to the defendant. See day before for those elements. Almost all jurisdictions have a separate doctrine for lawyers who take from their clients. In some jurisdictions it doesn’t even matter how you took (via will or intestacy). If the lawyer took then a presumption arises. If the presumption arises, then there are different ways to rebut. Under the classic jurisdictions, any evidence to rebut will do so. In other jurisdictions there is only one way to rebut it, that is to show that the donor acted upon the independent advice of counsel that was devoted completely to her interests. In CA we have the interested drafter statute – We take the Epps approach. Only invalidate if lawyer actually drafted. But we cast the net a bit more broadly. If a member of your firm drafts it, or if a family member of yours drafts it, etc. In CA it is simply an invalid gift. It is an irrebutable presumption of undue influence. There are some exceptions to the statute in CA – If the person who receives property is related by blood, marriage, co-habitant, or domestic partner. The other exception is if there is a certificate of independent review. FRAUD – Someone else is tricking you and substituting your intent. Intentional misrepresentation made with the purpose of influencing the testamentary scheme that causes the person to dispose of property in a way they would not have otherwise. There is fraud in the inducement – Inducing the person to go down and have the will drafted a particular way. Like you tell a lie about a beneficiary, and that induces them to change the will. Fraud in the execution – The person doesn’t realize the true nature of what they are signing. This can be as to the whole will, or just part of the will. Example where person dictates the will and another person drafts it. If that person tricks his way into the will then that is fraud in the execution with regard to part of it. As a general rule we strike the portion of the will that was effected. Also look at fraud as it relates to intent to revoke. 2/15/06 What is the difference between undue influence and fraud? Undue influence is coercion on one end of the spectrum, on the other end of the spectrum it is merely inappropriate influence. 3 ways of showing undue influence? 1) traditional four element, 2) presumption shifting three elements in CA, 3) interested drafter The old version of the book does not separate out duress, it was considered a part of undue influence. Duress is undue influence that is overtly coercive. This implies more of a physical threat. Generally if we find a defect then we strike the portion that was affected. In this particular case the cousins wanted a provision stricken but did not want the property to fall into intestacy because they would not get it. There was another will that was drafted but not signed that would have left the property to the cousins. The court said that if the general remedy is not equitable, then in specific circumstances you can create a constructive trust. To get a constructive trust you must also submit evidence of wrongful conduct by a third party. Tortious Interference with an expectancy – because of wrongful conduct by a 3 rd party, I didn’t get my expectancy. Most courts say you need to show undue influence, fraud, or duress. So what is the benefit of recognizing it as a separate cause of action? Damages can be different (can be punitive damages attached). Also you avoid no-contest clause. You are not challenging the will, you are suing the 3 rd party that acted wrongfully. Also a longer statute of limitations. For a will, if you have testamentary capacity, the next requirement is that the will must be validly executed. VALID EXECUTION OF A WILL 1) Must be a writing 2) Must be signed 3) Must be a witness These requirements serve an evidentiary function. Also serve a ritualistic function (make sure the person realizes the significance of what they are doing). Also serve a protective function (protect them against 3rd parties trying to sneak in and take property). Also serves a channeling function. Channeling people to lawyers. When ever you see home executed wills, you have a potential for problems. 1st requirement to dying probate testate is that you have general testamentary capacity. 18 years of age and of sound mind. Then we need a validly executed will. Statute of will varies by jurisdiction. 1) Writing, 2) signing at the foot by the testator or by another if at testator’s direction and in testator’s presence, 3) signed or acknowledged in the presence of two or more witnesses that are present at the same time, 4) the witnesses must attest and shall subscribe in presence of the testator Traditional rule is that the court takes a strict application approach to the statutory requirements. Modern trend is to have substantial compliance be enough. 2/20/06 2 variables – 1) what are the statutory requirements, and 2) what degree of compliance are we looking for (strict or substantial). In CA, the will must be in writing, signed by the testator (or by someone else in the testators name in the testator’s presence and direction), does not need to be signed at the foot, or signed by a conservator pursuant to a court order. In CA, there must be two or more witnesses each of whom (1) are present at the same time, witnessed either the signing of the will or the testator’s acknowledgment of the signature or of the will and (2) understand that the instrument they sign is the testator’s will. In CA, does not say that witnesses have to sign in the presence of each other, or sign in the presence of the testator. But they both have to be present when the testator either signs or acknowledges. In CA there are fewer requirements so those are the ones that are important. CA requires strict compliance. Two approaches to “in the presence of.” Line of sight approach means that if you were to look at that time, you would be capable of seeing it. The other approach is the conscious presence test (CA uses this). This means that from the totality of the circumstances, the witnesses know that the testator has signed or acknowledged the will. The conscious presence test is really a flexible test. Not really strict compliance then. So CA is really strict compliance with an *. Problems: Telephonic presence – This does not cut it. Does not serve the functions. Can not assess testator’s capacity, do not know what is going on on the other side of the phone. Execution through the bank teller’s window – Without the interaction probably no good. The signature or the acknowledgement by the testator has to occur before the witnesses sign it. The witnesses have to be there for the entire signature. There is one court that says as long as all of the parties sign before anyone has left the room, then the order of execution does not matter. CA – Must be in writing. Must be signed by the testator or by someone else on his behalf. If signed by someone else then T must be present and something about acknowledged. Witnesses must be present at the same time that the T performs. The witnesses need not be present at the same time that the other witnesses sign. Wendell thinks it is ambiguous and can be argued both ways. In CA, the witnesses do not need to sign in the presence of the T. Name printed on the will, and testator was too sick so puts an X next to it. The rule is that any mark that the testator makes with the intent that it be his or her signature, counts as the signature. The X is considered a valid signature. In CA we have a statute that overrides the general rule for when an X can be a signature. In CA, the X must be in the presence of a witness, the witness then has to write the name of the person who wrote X intending it to be the signature, then the witness has to write their name as the name of the witness. What if someone holds testator’s hand and helps? No good if the testator did not ask for the help because the guy could be controlling the signature. If the testator asks for help then probably ok to give it. What if he is signing the will and dies in the middle, only half the signature is there? The general rule is a mark that was intended to be a signature. But the question is why did the person stop? If you voluntarily stop then that is what you intend to be the full signature. If you involuntarily interrupted then that mark is not intended to be the full signature. No good. What about the witnesses signing after you die? Tough call under common law, but in CA it is not a problem because testator does not need to be there. What about electronic signature or rubber stamp signature? Too much potential for fraud. Probably no good under strict compliance. What about a complete nice signed will, but additions after the signature. In Groffman it needed to be signed at the foot so there is a problem here. Do we strike just the additions or the whole will? In CA it does not need to be signed at the foot. But the real issue is when was that put on the document? What about videotaped will? No good because lack the ritualistic function. Write the whole name and then have a heart attack. In all the commotion the witnesses forget to sign. What if the witnesses sign it later? How much time can elapse if the testator survives the heart attack? Reasonable period of time. They have to sign in a period such that they have a good recollection of what they are attesting to. Some courts say bright line 90-120 days. Even if the guy dies you can sign after and validate the will, this is called delayed attestation. 2/22/06 We are only responsible for CA. First variable to executing the will, after general testamentary capacity, is that you must comply with the jurisdictions will act formality statute. Second variable is the degree of judicial compliance. The traditional approach is strict compliance. 100% strict compliance. CA is strict compliance with bending because of delayed attestation, and because of conscious presence. Delayed attestation – As long as the witnesses can recall the circumstances surrounding the execution of the will. The witnesses have to understand that the document they are signing is the testator’s will. If you have more than the necessary witnesses they are called super-numerary witness. Do the witnesses have to be disinterested? Early common-law an interested witness was not competent to testify so no good. Second approach was to void the portion with respect to the interested witness. Third approach purges the interested witness of the excess interest, the amount which is above and beyond what they would take if the instrument was not valid. It is quite likely that people will have witnesses that they love and want to give stuff to. The CA legislature created a statute. We are only responsible for CA. A disclaimer can not relate back and create a disinterested witness at the time of execution. In CA the interested witness creates a rebuttable presumption of wrongdoing of wrongdoing. If you can rebut the presumption then you take the gift in the will. If you can not rebut the presumption then you purge them of excess interest (any amount greater than the amount they would take if the instrument was invalid). That excess amount, if any, will be treated as a failed gift. If you can prove the interested witness has actually engaged in wrongful conduct using our other doctrines, then apply the remedy per the other doctrine and take away the whole gift. To rebut the presumption the standard is a preponderance of the evidence. Undue influence – 4 element, then the 3 element that shifts the burden, interested drafter (irrebutable presumption unless you come within the exceptions), interested witness (rebutable presumption). The husband and wife signed the wrong documents. Must have testamentary intent. Must believe that the document you sign is the one expressing your wishes. Only where there are mirror wills and it was otherwise completely valid, the court allow it. But otherwise they say they are strict compliance. What about misdescription? I give my home at 2387 Border Lane to Ms. Roberts. But the proper address is 3278 Border Lane. What do we do? Misdescription doctrine says that if we have an otherwise valid will with a misdescription we have two options. We can correct the will. But that is like re-writing the will and courts don’t want to get into that. So as a general rule the doctrine says to take the evidence of the misdescription and strike as little as you need to, to get rid of the misdescription. In this case strike the numbers, and it reads I give my home at Border Lane to Ms. Roberts. As long as you only own one home on Border Lane then there is no problem. Under the misdescription doctrine if the wills are signed of the spouse and they are mirror wills, then strike the first name of the people in the first paragraph. 2/27/06 Traditional approach to validly executing the will. 1) Comply with wills act, degree of judicial compliance (strict). Modern trend is to reduce the number of statutory requirements, and loosen up on degree of judicial compliance. There is something called a self-proving affidavit, this is so you don’t need to call in the witnesses at probate. It is signed by the witnesses saying what they observed when the will was executed. In this case, the witnesses signed the self-proving affidavit, but did not sign the actual will. If you take strict compliance they did not sign the will and that is that, the will is no good. The New Jersey court says that if the will fails under strict compliance, then we fall back on substantial compliance. First prong is that we need clear and convincing evidence that they intended this document to be taken down and probated as their last will and testament. The second prong is that you must show that you substantially complied with the wills act formalities of the jurisdiction. The burden on the second prong is also clear and convincing. In this case they said the both prongs are met. Why should the testator’s intent be frustrated by the witnesses screwing up. Also, almost everything was done properly, the only thing wrong is they signed the wrong document but it says almost the same thing as what they were supposed to sign. Another approach is to simply use the first prong. As long as there is clear and convincing evidence that the decedent intended this document to be his will, then probate the document. This is called the harmless error doctrine. It allows courts to dispense with statutory requirements. Joint will was created and executed but not witnessed. Under strict compliance this is not a valid will. Montana has a statute saying all you need is clear and convincing evidence that you intended this to be your will. Three approaches – 1) Strict Compliance, 2) Substantial Compliance (two prongs), 3) Dispensing Power/Harmless Error Doctrine (one prong) For purposes of the essay question the fact pattern occurs in CA. Still must argue all approaches because they can be adopted judicially as they did in Rainy. Advocates of substantial compliance and dispensing power say you should only look at the facts of the particular case, and not look at the long term effects of a ruling. Is there a hierarchy with the 3 requirements (writing, signed, witnessed). Number of courts have said that the courts can not dispense with the signing requirement. What about the writing requirement? What is a holographic will? These are authorized by statute. Holographic will gets rid of the third requirement. Just need a writing that is signed. The traditional holographic will is made at home. 3/1/06 A holographic will is a writing signed by the testator. We drop the witness requirement and since we do that we add some other requirements. This one must be signed by the testator, can not be signed by someone else in the presence and direction of the testator. The will must also be in the testator’s handwriting. The whole will must be in the testator’s handwriting. What if the paper has company letterhead on it? Is all of the instrument in the testator’s handwriting? There is a split in jurisdictions over how much needs to be in testator’s handwriting, all or just the material provisions. Also these holographic will generally must be dated (split in jurisdictions). If there are multiple wills, we assume the later will trumps the prior will. Also need the date because at some point in the person’s life they may have laced capacity. Also the document must have testamentary intent. What is testamentary intent? The testator must intent for this document to be his/her last will and testament. Testamentary intent is also a requirement for the classic will, but because of all the requirements of the wills act formalities, it is almost always a given in the classic will. Johnson Case: Guy goes to business supply store and buys a standard form will. All he needs to do is fill in the blanks. When he is done he signs it at the bottom. Let’s assume that this jurisdiction only requires the material provisions in his writing. What is a material provision? Start with who gets what. 1) Writing 2) Signed 3) Handwriting of testator (how much split, all or material provisions) 4) Dated (split in jurisdictions) 5) Testamentary intent In CA 1) Writing 2) Signed, must be signed by the testator 3) Material provisions must be in the testator’s handwriting We will start by saying the material provisions are who gets what 4) Not need to be dated, but if it is not dated be careful. Two scenarios to be worried about. If it is not dated and there is another will, to the extent of any inconsistencies, the other will prevails. This assumes the other will is an attested will. We said earlier that a later will prevails over an earlier one. This statute creates a presumption that the other will is the later one. This is a rebutable presumption. If there is anything about the holographic will that permits you to give it a relative date that is later than the other will, then use the undated holographic will. What if the other will is also an undated holographic will? The second scenario is a capacity issue. If the testator lacks testamentary capacity at any time during his life and the will is undated, there is a rebutable presumption that the will was executed while the person lacked capacity. Relative dating will work to rebut the presumption. 5) The writing has to express testamentary intent Case: The will/letter is signed, “Father.” What constitutes a valid signature? We looked at this with respect to attested wills. There is standard is as long as you intend it to be your signature. It is the same here, anything the person intends to be his signature. The court said “Father” counts. The court then looked for testamentary intent. Is it a will, or is it a letter. Father wrote, “if anything happens” then who should get what. Also told son to “hold on to this.” What degree of judicial compliance do we need with respect to the elements of holographic wills? Problem 6 – The word estate in a document is ambiguous and in and as of itself is not sufficient to create testamentary intent. She also said “this is my will.” The question is what kind of extrinsic evidence is admissible? Does it have to be in the writing or can oral statements be allowed in. Also, is this the actual will, or is this instructions to the attorney on how to draft the will. Court found this to be only instructions, not the actual will. Is testamentary intent a material provision? If so, then it must be in his handwriting. Traditional approach the court only looks at things in his handwriting, and asks, can testamentary intent be determined from that. Under the contextual approach, testamentary intent must still be in testator’s handwriting and is a material provision, but if ambiguous, then look to printed words to resolve ambiguities. In this case the word estate may not refer to testamentary estate, but when you look at the title of the document “Last Will and Testament,” then obviously talking about the testamentary estate. Uniform probate code says take any extrinsic evidence to find testamentary intent. CA says what? Based on statutory language the first clause makes it seem as if we take strict approach, but then it says we can use printed text. This is a step beyond the contextual approach because in that approach we could only look at the printed words if the handwritten words create ambiguity. In CA can use handwritten and printed right from the start. So CA says it is not a material provision The CA statute actually says you can look at printed words on commercially printed form wills. 3/3/06 Traditional attested wills are recognized in all jurisdictions, holographic will are recognized in about half. CA does recognize holographic wills. In CA we allow extrinsic evidence if it goes to the validity of the will. Not if it goes to the construction then don’t admit it. A codicil is a document that amends a will. But first and foremost a codicil must qualify as a will. Person executes a holographic will giving house to a person. Then executes a traditional attested will later on that does not specifically mention the house but has a residuary clause giving everything to a different person. What is the effect of the New York will (later will) with respect to the holographic will? A later will cancels out all prior wills with respect to any inconsistencies. The New York will also says “I hereby revoke all prior wills.” So that is that, the older holographic will is done for. If the latest will has a residuary clause that will replace all prior wills. But if the prior will has a residuary clause but the latest one does not, then the prior will is basically a codicil. Even where a later will just changes 1% of a prior will, but has a residuary clause, then the intent seems that the later will completely replaces the older one and is not simply a codicil. But you have to look at intent. Codicil has to be attested or holographic will. Remember that testamentary intent is going to be the main question. Can make an outside argument that in a non-strict compliance jurisdiction, typically you need clear and convincing evidence that this document was intended to be probated, but make the argument that you just need clear and convincing evidence of intent. REVOCATION Revocation by act – Destructive physical act. Burning, tearing, erasing, crossing out, etc. This destructive act must be coupled with the intent to revoke. Need testamentary capacity at the time of the act, if done by another party, then the testator must be present and directed the other party. Revocation by writing – This requires a writing that qualifies as validly executed will. Can be attested or holographic. If you write, “I hereby revoke my previous will.” Then that will count. If you sign it, it is a holographic will. Writing that is signed and has intent of effecting who gets what. The act of writing can qualify as a destructive act, even if it does not qualify as a writing for purposes of revocation. Common Law added requirement – where you have revocation by act, the act must effect some of the printed words of the will. Modern Trend – As long as the destructive act effects any part of the will and has destructive intent, it can be a valid destructive act. CA used to say it has to effect the printed words, but we have not had any recent cases. The statute is silent on the issue. Lead with the traditional rule but argue the modern trend. 3/6/06 For attested wills, CA is a strict compliance jurisdiction. Lead with strict compliance but argue other approaches as well. Revocation by writing requires the writing to qualify as a valid will. The writing can either expressly revoke the prior will, or impliedly revoke the prior will. Imply would be through inconsistency. You can have as many codicils as you want. There is no limit. Revocation of a codicil does not effect the underlying will. Think of codicil’s as an add on document. If the testator revokes a will, it will bring down all codicil’s to the will as well. It is also possible to have multiple wills, if none of them have residuary clauses. I give my car to Mr. Mcdermott. Another document says I give my house to Ms. Lopez. Nothing inconsistent with these, so they are both free standing wills. If you want to completely revoke a will then you must either put your intent in a new will, or revoke everything by inconsistency. Partial revocation by act. This is a bit controversial. As a general rule, when a specific gift of a will is revoked then it will fall into the residuary clause. Some jurisdictions don’t allow partial revocation by act. The problem is that part and parcel with every revocation, is the making of a new gift. To make a new gift, technically you need to execute a will or codicil. So even in jurisdictions that allow partial revocation, some will only allow the partial revocation if the partially revoked gift falls into the residuary clause. CA permits partial revocation by act. CA will not force the gift go all the way to intestacy. CA is fine letting it go into the residuary clause. In other situations, we are not sure. 3 approaches to where it gift falls. An attorney tore up the will for his client. This does not count because act must be done by testator or by another in presence and direction of testator. Telephonic presence does not count. If after death, the will can’t be found then, either the testator destroyed it, or it was lost. Revocation through presumption. If a will is last in the testator’s possession and can not be found after the testator’s death, we presume the testator revoked the will. Must also show that the testator had capacity up until his death. If those requirements are met, then there is a rebutable presumption that the will was revoked. If rebutted or if an element is not met, then it becomes a lost will. The beneficiaries must come up with a more plausible explanation of why it is lost (other than it was revoked). To properly revoke you must have testamentary capacity. If just a lost will, you can probate it. You need clear and convincing evidence of the terms of the will. Duplicate original wills: 2 copies of the same document and have testator execute both out of abundance of caution. Leave one copy in lawyers office and keep the other. If make a new will leaving all property to Pepperdine, then that is revoking other prior wills. But if you take yours out and tear it up then what is the effect. Affirmative evidence of revocation by act of one original will revoke all originals. 3 rd scenario is after death can’t find the person’s duplicate original. CA says in this scenario the presumption doctrine does not apply unless none of the duplicate originals can not be found. If any one of them can be found, then probate it. Where there is a line out on a part of the will, how do we know that the testator made the lineout. Overlap the presumption doctrine. If the will is last in the testator’s possession, the testator has capacity up until his death, then first we presume the testator made the line with intent to revoke. This is a rebutable presumption and the question is, is there a more plausible explanation for how the line got there. Some courts refuse to apply the revocation doctrine if the act was made by pencil, pencil does not show formality of act. If the whole will is crossed out, the same process is followed. Revocation by operation of law. This applies to a divorce situation. Does the revocation by operation of law apply only to my will? What about non-probate property. In most states it only applies to wills. Modern trend is to apply revocation by operation of law to both probate and non-probate property. Treat the ex-spouse as if she pre-deceased. Life insurance policies are specifically excluded from the CA statute of revocation by operation of law. Life insurance policies are not revoked by operation of law. But keep in mind that the non-probate has to be revocable. If there is an irrevocable trust then that can not be revoked by operation of law. Under the will, the revocation by operation of law is an irrebutable presumption. Under life insurance policy it does not apply at all, and it is a rebutable presumption for other non-probate property. Need clear and convincing evidence otherwise. What about all property to my wife and if she dies first, then to her daughter? If divorce then construe broadly or narrowly? Revoke only gifts to ex-spouse. In CA gifts to other member of family are not revoked. Wife’s daughters would get it in CA. 3/8/06 If a will has been validly revoked, does that mean we never probate it? There are two doctrines that says we probate a will that has been validly revoked. As a general rule a will is effective when you die. For revocation purposes a will is effective when you validly execute it. REVIVAL – There is will 1 and will 2 (remember will 2 can be a will or codicil). There after you revoke will 2. Should we revive will 1. The English approach follows the traditional rule that a will is not valid until you die. Therefore we don’t have to revive will 1, it is still valid. Only look things when you die. Will 1 would be valid and would get probated. Only a handful of jurisdictions follow this approach. Most jurisdictions say that the moment the will is executed, it revokes all previous wills. There are two approaches here, 1 st approach says you have to re-execute it for it to be revived. The other approach is that as long as the testator intended will 1 to be revived, it is revived. That is the majority rule in America. CA follows the majority approach. The key in revival turns on how was will 1 revoked, by act or by writing. The question to ask is, what evidence of intent to revive will the court accept. If will 2 is revoked by act then the court will accept any evidence of intent to revive will 1. If will 2 is revoked by writing a 3 rd will, then the 1st will will only be revived if it appears so from the terms of the 3 rd will. DEPENDANT RELATIVE REVOCATION – Where you have a valid revocation, based upon mistake, and the testator would not have revoked but for the mistake, ignore the revocation. We have to show that there was a mistake. Courts have set limits on DRR. Courts have held that DRR is only good where there is an alternative plan of disposition that fails (this means an attempt at a new will which is invalid for some reason), or if the mistake is recited in the terms of the revoking instrument. What evidence of the mistake will the court take. If the revocation is by writing the evidence of the mistake must be set forth in the writing (that revoked the original will) in addition to the original three elements. If the revocation is by act, there must be evidence of a failed alternative scheme in addition to the other three elements. An attempt at another document being your will, but that document failed. 3/8/06 4 ways to revoke – By act, by writing, by presumption, by operation of law (divorce). CASE: Estate of Auburn: Person has will 1, and then makes will 2. Person then tears up will 2. Is will 1 revived? There has to be affirmative evidence of the intent to revive. There is a presumption against intestacy but that is not enough to revive. In this case, she said she is tearing up will 2 because she wanted to revive will 1. In CA that is enough to revive it. DRR – 1) must be a valid revocation, 2) based on mistake, and 3) the testator would not have revoked but for the mistake (causation). Where the revocation is by writing, the mistake must be evidenced in the writing, AND, the mistake must be beyond the testator’s knowledge (can’t say he should have known if it is true or not). Where the revocation is by act, there must be an alternative plan of disposition that fails (basically an attempt at another will). Problems: p. 262 1. Is there a valid revocation? Destructive act with the intent to revoke, at common law it had to effect the printed words of the will. So that is a valid revocation. Then he writes $1500 there. Is that a valid codicil? Not attested, but is it holographic? Must have material provisions in testator’s handwriting. Who takes what? It only says what (1500) but does not say who in his writing. So there is a valid revocation, but no valid codicil. At this point Blake is taking nothing. Blake will argue for DRR. Valid revocation based on mistake. This is revocation by act, and there is also evidence of an alternative plan of disposition that fails. This is a mistake of law, he thought writing $1500 was enough to give Blake $1500. If apply DRR, we ignore the revocation. In applying DRR, also use a scale. If we apply DRR Blake would get $1000. If we do not apply DRR Blake gets 0. Overlap the testator’s true intent, which is to give Blake $1500. We can’t give effect to testator’s true intent because he did not do it properly. But, to get closest to it, we can apply DRR. What if the testator crossed out the 1000 and wrote in 500. Now what about the testator’s intent. 2. Crosses out John and writes in Nancy. Gift to Nancy fails, so John argues DRR. Was there causation? Argue it. What if the underlying will originally was a holographic will? Now the whole thing is in the testator’s handwriting. The only case out there says the cross out and re-write qualifies it as a valid codicil. Case: Codicil was made but it was invalid because of the interested witness doctrine. Is the mistake evidenced in the writing? Yes because the interested witness signed the writing. Problem: Have a will, and then a codicil that revokes the gift to Judy. The mistake is that the testator thinks Judy is dead. Judy tries to argue DRR by writing. This is a mistake of fact. Does the writing set forth the mistake? It does because the codicil says “I revoke the gift to Judy because she is dead.” Apply DRR here. Judy takes the original $5000. If the codicil just said I revoke the gift to Judy, then the mistake would not be evidenced in the writing. There is a court that says as long as there is clear and convincing evidence of the mistake, then it does not need to be set forth in the writing. This is a CA case, but don’t lead with this. Problem: I revoke the gift to Judy because I have already given her $5000. Court said not going to apply DRR because where the alleged mistake is within the testator’s knowledge, so he may not want to give the real reason. Problem: Person makes will. Later writes void on it and has lawyer draft new will. The new will is not completed. Can you use DRR to revive the first will. This is revocation by act, but the revocation was not based on a mistake. 3/22/06 What constitutes the will? The doctrine of integration. All pieces of paper physically present at the time of execution which the testator intends to be part of the will are part of the will. Probating means giving effect to the testator’s intent. There are some doctrines to try and expand the scope of the will. 1. Republication by codicil – Executing a codicil to a will, by operation of law, it will re-execute and re-publish the underlying will as well. Re-publishing it will re-date it. This is a general rule. Most courts assume this is good and will do it unless it is inconsistent with the testator’s intent or will lead to inequitable results. Let’s say there is a will that says $100 to Ms. Dillon and the rest to Pepperdine. Ms. Dillon is a witness to the will so there is a problem because of interested witness. After, there is a codicil that makes Jake a guardian to the kids. There are 2 other witnesses to the codicil. Now the underlying will gets re-executed and is ok. 2. Incorporation by reference – Where the will expresses the intent to incorporate a document outside the will, and describes it with reasonable certainty, as long as that document is in existence at the time the will is executed, then that document is incorporated into the will. Technically, that document is not made a page of the will. But the document will be incorporated and its intent will be given effect. 3. Acts of independent significance – This is very fact sensitive. Courts take a low threshold (reasonable certainty) that the document is described with reasonable certainty in incorporation by reference. Court only sweats the details on the fact that the document was in existence at the time of execution (or re-execution by codicil) of the will. Technically you can only incorporate the document as it exists on the date of execution. Typed material can not be integrated into a holographic will, but can be incorporated by reference into a holographic will. ACTS OF INDEPENDENT SIGNIFICANCE The general rule is to construe a will at the time of execution. What if will says I give my car to Bill? Then I sell my car and buy a new one. Is the new car now going to Bill? Where the will makes expressed reference to acts or events which have independent significance, then give effect to the gift. I give my car to Bill. Then change my car. The buying of the new car was for reasons independent of the effect on the will. Bought it because wanted a new car. So we can give effect to the gift, do not need to execute a new will. 3/24/06 For incorporation by reference we look back to see if there was an underlying document that we can incorporate by reference. Same of republication by codicil, we look back to the underlying will. For acts of independent significance we look forward to acts that occur after the will is made. When looking back to a document, repub by codicil looks back to a will. Does it have to be a valid will at that time? Wendel says yes, but it doesn’t really matter, argue incorp by reference otherwise also. Is it a will or a codicil? If there is no need to resort to the underlying instrument then the new instrument is a will. One of the key factors is whether the later instrument has a residuary clause. If so, then probably do not need to look back to the underlying instrument. ACTS OF INDEPENDENT SIGNIFICANCE Where the will makes reference to an act outside of the will that effects either who takes or how much, that is permitted only if the referenced act has significance independent of its effect upon who takes the property. Look to see if the referenced act has valid intervivos purposes. If the referenced act only has testamentary purposes, then he should have to execute a codicil. What about a clause that says, I give anything in the drawer to A. Did the person put the stuff in the drawer for testamentary purposes, or independently because the drawer is used for safekeeping? Argue both sides. I give the residue of my property to the beneficiaries in my wife’s will. The wife’s will has independent significance as to what happens to my property. Courts say this is ok. If you execute a will and then die without providing for your wife what happens? One option is that you forgot to change your will, the other option is that you didn’t want to give it to your spouse. Pritermitted spouse doctrine presumes that he accidentally forgot to provide for her, so we give her, her intestate share. The order is creditors take first, then pretermitted spouse (or other beneficiaries taking under a statutory right) takes second, then beneficiaries take 3 rd. Person makes a contract that says if you take care of me then you get half of my estate, and he signs it. When he dies, who takes the property? It is not a valid will in most jurisdictions. The other person says he has a contractual agreement and sues for enforcement of the contract. Many jurisdictions make it hard to prove a contract relating to a will. Uniform probate code has three ways to prove it. A. Provision of the will B. Referenced in the will C. Writing signed by the decedent evidencing the contract. Basically it can not be an oral contract. Must have a writing signed by a decedent, evidencing the agreement. If so then you take as a creditor, first in line. If there is no writing, then may be able to get some quantum meruit. As to family members, there may also be a claim under equitable estopple. In CA we backed off the uniform probate code. We will take oral agreements as long as there is clear and convincing evidence. We obviously take a writing signed by a decedent. JOINT WILL – One instrument executed for two people. Does the execution of the joint will give rise to a presumption of a contract not to revoke? CA says there is no presumption of a contract not to revoke. If you want a contract not to revoke, then make one. 3/27/06 What does it mean to probate the property? Give effect to the intent of the will. Construe the will and effectuate it. How do we construe the will? If the will is supposed to reflect the testator’s intent, why should we be taking extrinsic evidence? When, if ever, should we take extrinsic evidence? Classic common law (with regard to evidence about construction) is to apply the plain meaning rule. Give the words in the will their plain meaning. If there is an ambiguity. There are two types of ambiguities, latent and patent. Patent is obvious ambiguity (I give my property ½ to A, ½ to B, and ½ to C). Common law says not extrinsic evidence to figure out how to resolve it, they would just deal with it on their own. Latent is like this ($1,000 to my favorite student, Mr. Ashrafi). When you go to apply it to the real world you find out there is an ambiguity. This is known as an equivocation (when two or more people or objects match the description of what appeared to be clear language in the will). The tension is whether this is rewriting the will or just construing the will. Common law allows extrinsic evidence to resolve latent ambiguities. 1) Why are you offering the extrinsic evidence? Are you offering it to show intent of how to distribute, or are you offering it to show whether or not there was testamentary intent in the first place. Therefore, the evidence goes to the validity of the will in the first place, without testamentary intent it is not a valid will in the first place. So evidence about validity is always allowed. If being offered to show something about the construction of a validly executed will then go though a different analysis. Common law have 3 forms of latent defects: 1) Equivocation 2) Personal Usage Exception – Really only one person matches the description, but the way the testator is personally using the word leads to an ambiguity. Testator called a women Ms. Mosley, and wanted to give her the gift but the real Ms. Moseley wants to take the gift. 3) Mis-description – Wendel really lives at 3278 Bordero Lane. His will says I give my house at 2387 Bordero Lane to Beno Ashrafi. This a latent defect. Must take extrinsic evidence to identify the ambiguity so might as well uses the extrinsic evidence to help construe it. Common law the courts would only strike the ambiguous part, striking as little as possible to see if there was enough left for the courts to give effect to it. If you just strike the address, then as long as Wendel only owns one house on Bordero Lane then we would be fine. There was a case where the guy give something to Robert J. Krause, but doesn’t know a Robert J. Krause. He knows a Robert W. Krause, so they are pretty sure there is a mis-description. If you strike the J. then it is an equivocation and you can use extrinsic evidence to construe. Classic thing was to convince the court that you were just construing, not re-writing. Modern Trend Approach – I leave all my things to Bobby and Puppy Ashrafi. You think they get 50-50. But, latent defect shows that Puppy is a dog and can not take. Does his half fall in intestacy, or does his half fall to Bobby? In CA at the time of this case the part that fails goes into intestacy. So what extrinsic evidence does Bobby want to admit? The testator meant all to Bobby to take care of Puppy. CA rejects the plain meaning rule, they say that you can’t read the plain meaning of the words because the words were written by the testator. Read the will relative to the circumstances surrounding the testator at the time of execution of the will. This will increase the chance of finding an ambiguity. CA also does not care about patent or latent, they say, anytime there is an ambiguity we take extrinsic evidence. The new issue in CA is what constitutes an ambiguity? If the language in the will, which in light of the circumstances surrounding the testator is reasonably susceptible to two or more interpretations, then you have an ambiguity. Then you should take extrinsic evidence to help construe it. What extrinsic evidence? Only extrinsic evidence that is consistent with the possible reasonable interpretations will be taken. What about the types of extrinsic evidence, circumstantial or direct evidence? We prefer circumstantial evidence, rather then an oral declaration. Will take oral declarations from scriveners. 3/29/06 Why is extrinsic evidence being offered? If it goes to the validity of the will, then bring it on. If it is to help us construe a validly executed will then use the following rules: We lead in CA with the Estate of Russell Case. Modern Trend probably would admit evidence under equivocation, or personal usage or misdescription. Scrivener’s error – You have to show that there was a scrivener’s error, by clear and convincing evidence. And clear and convincing evidence of its effect on testator’s intent. So you must show what their real intent was, and what their intent was after the mistake. Will – Who gets what The Who is the beneficiary. If the beneficiary dies then it is called a lapse and the gift fails. If a specific gift or general gift fails then it goes to the residuary. If the residuary clause fails then it falls into intestacy. What if will says I give $1000 total to my two favorite professors Wendel and Popovich. If Wendel dies then who gets what? This may be considered a class gift. A class gift looks a little like joint tenancy. Every residuary clause that has more than one taker will be treated as a de facto class gift. In CA – Common law says there is no such thing as a residue of the residue, but modern trend and CA says there is a residue of the residue. So if part fails it goes to the other part. Regarding construction of wills, in CA it applies to wills, trusts and other non-probate instruments. What about applying anti-lapse to joint tenancy. Anti-lapse – You must have a beneficiary who pre-deceases the testator. The beneficiary must be sufficiently related to the testator. The beneficiary has to be survived by issue. Then we presume the testator would not want the gift to fail and would prefer the gift to go to the issue of the beneficiary, unless there is an expressed contrary intent in the instrument making the gift. Anti-lapse attempts to save a failed gift. The key is defining the requisite degree of relationship. In CA the beneficiary must be related to the testator or the testator’s current or former (death or divorce) spouse. No specificity on degree of relationship. Very broad. Common law drew a big distinction between lapse and void gifts. With a lapse gift, the beneficiary was alive at time of execution. A void gift is when the beneficiary was dead at the time of execution. In CA anti-lapse applies to both void and lapse gifts. Actually it applies to all lapse gifts, and most void gifts. 3/31/06 If a gift lapses or is a void gift then it will fail. Sometimes if a gift fails, there is an expressed gift-over clause. The will says, if the gift fails, give it to this person. Assuming no gift-over clause, in CA if a general or specific gift fails it goes to the residuary, if the residuary fails it goes to intestacy, if part of the residuary fails it goes to the other takers of residuary. Lapse assumes the gift fails. But if the beneficiary is related, then we presume that the gift does not fail and it should go to the issue of the beneficiary. This is a reubttable presumption. If we use the class-gift doctrine to save the otherwise failed gift, then the other member of the class will take it. If a member of a class dies before testator, do we lead with anti-lapse or class gift doctrine? Which one trumps? In CA, we apply anti-lapse first. But, where you have a class gift that void because of the death of the beneficiary, and the testator knows (actual knowledge) of the death, then do no apply anti-lapse. Otherwise apply anti-lapse to class gifts, to void gifts, and to lapsed gifts. You only do not apply it to class gifts that are void where the testator knew of the death. For lapse the beneficiary does not have to actually die, it can be where we treat someone as predeceased. For anti-lapse there must be 1) Lapse, 2) survived by issue, 3) Degree of relationship, 4) No contrary intent expressed in the instrument. If person says my living brothers and sisters take my property, then what? Some states say that is contrary intent so don’t apply anti-lapse, other states say that is just boiler plate language so not really testator’s intent and we should still apply anit-lapse. In CA, if you have a gift-over clause, or if it has a survival requirement, then that is enough to express contrary intent and we do not apply anti-lapse. No anti-lapse statute applies to joint tenancy. But anti-lapse applies to wills, trusts, and other instruments. Degree of relationship – Related to the testator or related to the testator’s spouse. Keep in mind, the actual spouse themselves is not related. Class Gifts – There is kind of like a built in right of survivorship. But, when is a gift to multiple individuals a class gift and when is this type of gift just a gift to multiple individuals? If not a class gift, and if one of the takes fails, then we don’t give it to the other takers. It is a class gift when the testator intends it to be. We look at circumstantial evidence of the testator’s intent. Did the testator want this group to be treated as having a built in right of survivorship. 4 key variables (not elements): 1) Common characteristics – do all of the takers have common characteristics 2) How are the beneficiaries described – are they described by name or by group 3) How is the gift described – in the aggregate or in specific share amounts 4) If we do not treat it as a class gift, thus if is a failed gift, then where does it go – we want it to be consistent with the testator’s overall scheme Dawson Case: When there looks like a class, ask the question, are there other individuals with the common characteristic that were not included? 4/3/06 Wills are considered ambulatory. Ways of saving failed gifts – 1) Anti-Lapse 2) Class Gifts – Check 4 variables above CHANGE IN THE PROPERTY Change in property also depends on how we classify the gift – Specific, General, or Residuary? The use of the modifier “My” will make it a specific gift. If just say I give a 1986 Volkswagon then it is a general gift. Which one is up to the probate court to decide. I give $10,000 from my B of A checking account. This is a demonstrative gift. It is a general gift from a specific source. If it is a specific gift, and then you sell it before you die, have you implicitly revoked it? Depends on intent. If you did not intend to revoke it, then you can give them a substitute gift. The substitute gift come out of the residuary. This is the doctrine of ademption – The identity approach (Common Law) – You go to the estate and see if you can identify that item in the estate. If you can not identify the item in the estate then we presume the gift has been extinguished by ademption. The gift has been adeemed. This only applies to specific gifts. The uniform probate code says the presumption is against ademption – If they bought a substitute item then give them that, if not then give them the money. CA takes the traditional identity approach to ademption. Ways to avoid ademption: 1) Don’t get it classified as a specific gift 2) Classify as a change in form, not substance. I give all the money in my B of A checking account to X. If checking account changes to WaMu you want to argue that it is just a change in form, not substance. Very fact sensitive. What if the money is taken out of the checking account and put into a CD. Court says this is a change in substance. The greater the change in value the more likely that it is a change in substance, like if sell the Volkswagon and buy a Jaguar. 3) Construe the will at time of death rather than time of execution. What if there is an involuntary transfer? Like if the car is stolen, or if a boulder crushes it. As a general rule it does matter whether the transfer is voluntary or involuntary under the traditional identity approach. CA – The recipient of a transfer of a specific gift gets the gift to the extent it can be identified and any of the following: Any outstanding balance at the time the testator dies. If Wendel sells his car before he dies for $5,000 and collects $1000 up front and then dies, the beneficiary does not get that $1000 because the car is gone and that money goes to the residuary. But the $4000 outstanding balance goes to the beneficiary under the statute. This is called the outstanding balance statute. What if Wendel gets old and his conservator says you should not drive the Volkswagon any more. He tells you to sell it. For purposes of the ademption doctrine, if you have a conservator we assume you don’t have the capacity to execute a codicil. So where a conservator is in charge of the property and it changes either voluntarily or involuntarily, then the beneficiary gets full value of the item, basically all specific gifts turn into general gifts. If the conservatorship ends then you have the ability to execute a codicil, and if you don’t then you are ratifying what the conservator did, as long as one year passes. 4/5/06 Identity approach to the doctrine of ademption – irrebutable presumption that a specific gift is revoked if it can not be identified in the estate. This is harsh so historically jurisdictions recognize 3 avoidance doctrines: 1) Don’t call it a specific gift. 2) Classify it as a change in form not substance 3) Construe the will at the time of death not execution Softening doctrines in CA: 1. Outstanding balance doctrine 2. Conservatorship doctrine STOCK SPLITS I give 100 shares to Pete. What if there is a stock split. Common law there was a distinction between specific and general gifts. If specific gift, like my 100 shares, then if there is a split then my 100 shares turned into my 200 shares and give it all to him. If a general gift then do not change the gift. 100 shares is 100 shares. Modern trend says stocks are a percentage of the company. The intent of the gift is to give a percentage of the company. CA: Court looks to see if testator owned a matching item. If owns 100 shares and says I give my 100 shares then it is a specific gift and follow common law. If does not own 100 shares and says I give 100 shares then it is a general gift and follow common law. The only hiccup is if he owned 100 shares and said I give a 100 shares, the language is general but since testator owned a matching item then beneficiary gets the benefit of a split. Also if he does not own any but says I give my 100 shares. This is specific language, he does not own any so the beneficiary does not get anything. What if he owns nothing, says I give my 100 shares, then a week later he buys 100 shares. Then there is a stock split? Starting point is to construe will with circumstances surrounding at the time of execution. If that was the end of the argument then beneficiary would get nothing. If you can convince the court to construe at time of death not execution. If you construe at time of death it is a specific gift and then beneficiary would get benefit. But CA statute says beneficiary gets benefit of “then owned” shares. It does not make any difference if it is a stock split of a dividend because the change is initiated by a corporate entity. If a general gift is not in the estate, the general rule is that the personal representative has a legal duty to acquire it. But, treat all gifts of closely held stock as if they were specific gifts. Satisfaction Doctrine -- Should an intervivos gift of like kind to the testamentary gift count against the testamentary share? Common law says yes as long as the parties were related. Modern trend and CA, the presumption is that any intervivos gift made to a time of death beneficiary does not count against the testamentary share, unless there is a specific instrument expressing contrary intent. The donee can create such instrument at any time, the donor must create contemporaneous with the gift. Also, the writing creating the time of death gift can also express the intent by saying any intervivos gifts of like kind will count against. If the beneficiary dies that kicks in lapse. If anti-lapse is kicked in and the devise goes to the issue, the gift is treated as a full and partial satisfaction unless the writing says otherwise. This is the opposite of what we do under the advancement doctrine. In CA, if the gift is $200K to Lopez if she survives me, otherwise to Leavitt. If there is $150K in intervivos satisfaction against Lopez’s share, then even if the share goes to Leavitt then apply the satisfaction and Leavitt only gets $50K. 3rd Miscellaneous Doctrine: I give Lopez my house. The house is worth $500 and there is $495 of debt. Does he get the house free and clear or subject to the mortgages? Common law was free and clear, and modern trend says take subject to the debt. In CA we follow the modern trend. But if there is a specific clause that says take the asset free and clear, then give it to him free and clear and the estate will pay off the mortgage. Last Doctrine of the Day: Wendel wins the lottery, he wins 138 million. Will says 1 million to each of my students and the residue to Gerri. Then Wendel loses most gambling and dies with 10 million. There are 78 students, now what? This is another change in circumstance doctrine. Traditionally the order of gifts is specific first, then general, then residual. Some states give the court power to override the presumed cutting order if it is not consistent with the testator’s overall intent. In CA we follow the overall cutting order but we draw a distinction between relatives and non-relatives within the specific and general gifts. Cut non-relatives first. CA the courts have the power to override the cutting order. 4/7/06 In a non-community property state, marriage has no property consequences. In a noncommunity property state the govt. does not get involved until death or divorce. The state lets you work it out yourselves. In this class we focus on death. At time of death or divorce the spouse gets elective share. This gives the spouse the right to elect or claim her statutory elective share. It is usually 1/3 – ½. Typically 1/3. But 1/3 of what? Common law was 1/3 of decedent’s probate estate. Modern trend is 1/3 of the augmented estate which includes probate property and sometimes intervivos gifts made within 2 years of death. Community property states effect property rights the minute you get married. Property earned during marriage is 50/50 owned. Any property acquired as a result of the labor of either spouse is community property. Property acquired before marriage and property acquired during marriage by gift or inheritance remains separate property. You can also change the legal classification of property, that is called transmutation. Characterize the property the moment the property is acquired using the laws of the domicile of the party acquiring. Every spouse in every jurisdiction has the right to five protections. 1. Public Pension Plans -- Social Security – Only spouse can claim social security. This is a life interest, support not ownership. 2. Private Pension Plans – ERISA, pension benefits, only spouse can claim, unless there is a voluntary and knowing waiver. Usually life interest, support not ownership. 3. Homestead – Can claim a place to live, some jurisdictions is the whole house, other jurisdictions give a set amount of money. Usually get homestead for life. 4. Personal Property Set Aside – Some set amount of personal property is set aside (these trump creditors and/or wills) 5. Family allowance – This allowance only lasts until probate closes. Is this a set amount or is it adjusted to standard of living? Jurisdictions are split. In every jurisdiction every spouse has the right to claim all 5 forms of protection. In community property state, married guy earns $100K and then dies. The wife gets her 50K outright immediately. The husbands 50K goes into probate and he can give it to anyone he wants. What if husband and wife own two houses as community property, each worth $1 million? Each house is half owned by each spouse. Can’t just give one house away. Community property works on an asset by asset basis. Now Wendel and Jerri own 3 million. 1 million in cash and two houses. Wendel says I give all of the phat pad to Lulu and if Jerri agrees then the rest to Jerri. If Jerri does not agree then I give all my property to Lulu. Can this be done? Wendel does not own all of the phat pad so can he give it all away? In CA this is called putting a spouse to an election. If one spouse clearly expresses the intent to give away property that belongs to the other spouse, then that spouse can elect not to let it happen but then they lose the right to take of spouse’s property. We make it hard to put a spouse to an election, if he says I give phat pad to Lulu then we assume he only wants to give his half. You can back into putting a spouse to an election if you have a no-contest clause and an instrument that expresses the intention that clearly attempts to give away an asset that is partially of fully owned by the other spouse. There is also quasi-community property. A couple that migrates can have quasi-community property. Quasi-community property only applies to the deceased spouses property. It is separate property until the owner of the property dies, then it becomes quasi-community property. It is not true community property. It also does not kick in until death. 4/10/06 Switch the last scenario around. Wendel and Gerri get married in CA and Wendel earns $100,000. That is community property. After retiring with the 100K they move to Missouri. He dies a week later with a will giving everything to Lulu. How much goes into probate? Moving does not automatically change the classification of the property. So when Wendel dies 50K will go into probate. Now Gerri has a right to claim her elective share. There is a law that says surviving spouse has no right to claim elective share in deceased spouse’s community property. Only 14 of the 38 non-community states have adopted this law. Case: Will says all to daughter. Then 10 years later the guy gets married and dies a few years later. Can the wife take as a pretermiteed spouse? Should we provide for the spouse? 1. Oops doctrine – He intended to provide for her but never got around to changing the will. 2. She has a right to take under spousal protection Why not to recognize pretermitted spouse doctrine: Spouse is already protected via community property or elective share. Nevertheless, every state has a pretermitted spouse statute. These statutes basically presume that he forgot to change his will. Basically in CA the spouse gets her intestate share but there is a cap on the separate property (no more than ½ of the separate property). Where do we fund this from? Do we just follow the abatement doctrine? That would be logical, but the CA statute says do not follow the abatement doctrine, take from all equally pro rata. This is a rebutable presumption. Can not bring forth any evidence, can only rebut it in one of three ways: 1. If the decedent intentionally disinherited the spouse and that intent is expressed in the instrument. Usually general disinheritance clauses are not enough, must make specific reference to the spouse. 2. If testator has provided for the spouse in a transfer outside of the will and the testator intended the transfer outside of the will be lieu of the spouse taking under the will. Historically this would be a non-probate transfer. For intent here can look at basically any evidence. 3. Spouse has made a valid agreement waiving the rights (pre-nuptial agreement). In CA, the pretermitted spouse doctrine applies to wills, trusts, and other instruments. For the doctrine to apply the marriage has to be after the execution of ALL testamentary instruments. What is a testamentary instrument? For purposes of this doctrine, a will or a revocable trust. Unless the gift was made to an individual with an eye towards marriage, the courts have held that the gift will not prevent the application of the pretermitted spouse doctrine. What about a will that does not provide for a future child? Pretermitted Child. Presume they forgot to re-execute a will. This is a rebutable presumption. 3 ways to rebut. 1 and 2 are the same as above, and the 3 rd way is that the decedent had one or more child at the time of execution and substantially all to the other parent of the omitted child. This shows that he already had children and he had to think about giving property to kids, he decided not to give to kids and instead to give to other parent and let them decide when and how much to give to the kids. What does a pretermitted child get? They get there intestate share. They get it when probate ends. Does a child have standing to sue an attorney for malpractice? Common law said no standing. Modern trend says as long as the child was an intended beneficiary then he has standing to sue. 4/12/06 What are the four classic forms of non-probate? 1. Joint tenancy 2. Life Insurance 3. Legal LE/Remainder (this is different than equitable life estate and remainder which is a trust) 4. Intervivos trusts Accidentally omitted child doctrine: If at the time of decedent’s execution of all of decedent’s instruments (will and intervivos trusts), the decedent failed to provide for the child because he wrongfully believed the child was dead or unaware of existence, then the child gets intestate share. Does it matter when the will was executed relative to the birth of the child? In pretermitted it is usually will and then birth of child, in this one it is usually birth of child and then will executed. This is not rebutable. Joint tenancy – When one party dies their rights are extinguished and other shares are recalculated. Creditors can not go after it because it was not transferred, just extinguished. Can also be joint tenancy bank account. Case: Old man wanted to add another person’s name to his bank account. Why? Maybe because true gift (true joint tenancy), or maybe to have someone act as their agent (agency account, or convenience account), or maybe to avoid probate (payment on death arrangement). True JT – Intervivos it would be 50-50 and at death the survivor gets 100. Convenience – Intervivos it would be 0 – 100 and at death the survivor gets 0. Payment on death – Intervivos it would be 0 – 100 and at death the survivor gets 100. Common law -- presumption of true joint tenancy but can use clear and convincing evidence to show the intent of the decedent. Court says can look at evidence of how the account is treated even after it was set up. At common law payment on death accounts was not a valid way to avoid probate. Modern trend (CA) we presume the parties own the fund in proportion to the contributions that they made, and at death we presume a right of survivorship. But if clear and convincing evidence of alternative intent then treat the property accordingly. Modern trend and CA will treat payment on death account as a valid way to avoid probate. In CA we have joint tenancy to avoid probate also community property with right of survivorship is treated the same as far as avoiding probate. When looking at property must look to see if it qualifies as one of the four instruments that avoids probate, if not then it must be probated. Originally payment on death contracts did not count, only life insurance contracts avoided probate. CA goes modern trend, and allows all contracts with a payment on death clause are valid will substitutes. Can tell the bank to give you cash to someone if you die. That avoids probate. Under contract law, do 3 rd party beneficiaries have to survive in order to get the benefits? No, if they are dead it just goes into their estate. But for will, you must survive to take. At common law you apply the contract rules, but CA and the modern trend applies the will rules so if the beneficiary under the contract dies then it is a lapse. Superwill doctrine – Modern trend movement that says we should permit a subsequently executed will to override the provisions of a non-probate because true intent should control. 4/17/06 With an intervivos gift there are two parties – Donor and donee. With a trust there are 3 parties, Settlor, trustee (legal title) and beneficiary (equitable title). The amount put in the trust is called the trust corpus, or res, or principal. That amount will generally create income. Four requirements for a valid trust: Intent to create a trust (distinguish between the intent to make an outright gift and to make a gift in trust) Trust property – funding (the trust is not created until some property is delivered to the trustee to maintain) Ascertainable beneficiaries – Gotta be able to name them. Writing? (not a requirement of trusts, but if testamentary trust then requirement of wills, if putting real property in trusts then must comply with the statute of frauds) Don’t need a writing for intervivos trust of personal property. Statute of Frauds and Statute of Wills. Merger Doctrine -- I hereby declare that I hold all of my property in trust for my own benefit during my lifetime and at death all to Lulu. This is ok, but if there is not someone else with standing to sue then the trust is non-existent because the legal an equitable title merger. The merger doctrine only applies when there is one trustee and one beneficiary and they are the same. Does the settlor have standing to sue the trustee? Common law says that after the settlor sets up the trust, and if he retains no interest, then only the beneficiaries can sue. 4/19/06 A trust is a bifurcated gift. Bifurcate the parties – Settlor, Trustee (legal title), Beneficiaries (equitable title) Bifurcate the gift – Principle (corpus/res), and Income Bifurcate the duration of gift – Possessory estates and remainders. What kind of intent is needed to create a trust? If magic language is used there will be a strong presumption that a trust was intended. If the trustee dies, how does that impact the trust? A trust will not fail for want of a trustee. The court will simply appoint a replacement trustee. If the person is the settlor and the trustee they must treat the property differently once transferred in the trust. Case: Guy makes a promise to pay to a woman $200 a month for the next five years. Is that enforceable? No, it is a gratuitous promise to give a gift in the future. If there is delivery into a trust then it is enforceable. A constructive trust – legal fiction where a trust is created and the court order to give property forward to equitable beneficiaries. A resulting trust – If a trust fails in whole or in part at creation or at any point during, a resulting trust will be imposed and property will be given back from the trustee to the settlor or the settlor’s estate. 4/21/06 Classic trust is one party transferring property to a party for the benefit of a 3rd party. This creates a legal obligation. If merely a moral obligation it is called precatory language, like I give my property to Mark, and I hope he takes Bobby out to dinner. If you use any magic language like trust or trustee, then it will be presumed that it is a trust. When the settlor and trustee are different parties there is a low threshold to create the trust. If the settlor and the trustee are the same party, then there is a higher threshold on the intent to create a trust. Is it really a trust, or is it a intervivos gift that fails for want of delivery. Trust is created when property is put in the bucket. What kind of property can be put in? Generally there two things that give courts trouble. An expectancy – I put in the property I expect to inherit from my mother. Mother is still alive so just expect to inherit. Future profits also gives the court problems. This is a bit confusing, but majority says future profits are not an adequate property interest for purposes of funding a trust. Also courts hold that future profits are adequate for purposes of an intervivos gift. Can these be reconciled? Some people say it has to do with whether or not it is in writing, other people say it is more likely to be a valid transfer if the donor owns the means of producing the future profits. For trusts, the court says it is a timing question, the trust was created when the profits were gotten and were treated consistently with the trust provisions, that is when the trust is created. p. 516 2(b): O declares himself TE of all stocks he owns … profits going to A. Stocks are an adequate property interest. This is current transfer with income interest to beneficiary. This oral declaration is probably sufficient to express intent and also to fund it. 2(c): This looks like Brainard, except instead of it being oral, it is in writing. 2(d): Unsure with both C and D. Ascertainable Beneficiaries: Must be able to name them or objectively determine who they are. Heirs, issue, children all ok, but friends are not. If a trust fails it goes back to settlor via resulting trust. If settlor is dead then it goes to his estate. Honorary Trust: Relying on the honor of the TE to follow through with settlor’s intent. As long as the purpose of the trust is distinct and definite and not arbitrary or capricious, and The Trustee is willing to honor it Then the court will look the other way. Honorary trusts last only as long as the first trustee is willing to honor the terms of a trust. If that person dies or does not want to honor it, then the trust is over. Typically used to care for pets and cemetery clause. Usually no good because pets are not valid beneficiaries because they don’t have standing. Charitable trusts are the opposite, they are only valid where there is no ascertainable beneficiaries. That rule does not apply to charitable beneficiaries. The beneficiaries are usually society, etc. The writing requirement. What if Wendel tells Kazarian that he is giving her his house to hold as trustee for the benefit of Lulu. Wendel makes a deed saying Wendel to Kazarian. Common law and majority rule is that Kazarian gets to keep it free and clear. Modern trend is to say that is unjust enrichment so impose a constructive trust. The constructive trusts arises out of operation of law so it does not need to comply with the statute of frauds. Modern trend may also impose a resulting trust. Testamentary trusts – These must be in writing. Tells McDermott that he is going to give him a million dollars to give to Lulu. In his will he just writes I give 1 million dollars to McDermott. The intent of the trust is not expressed in writing, so it is a failed trust. What about I give a million dollars to McDermott to use for the purpose we discussed. The first one is a secret trust – there is nothing on the face of the will that hints at the trust. The second one there is language on the face of the will that hints at the fact that the individual was supposed to take as a trustee. This is called a semi-secret trust. If it is a secret trust you get a constructive trust and the court will order the property to be distributed to the intended beneficiary. If it is a semi-secret trust you get a resulting trust and it goes back to the testator and ends up in the residuary clause. This is because the secret trust is a latent ambiguity so they will take extrinsic evidence and use it to go forward with a constructive trust. The semi-secret trust is a patent ambiguity where they will not take extrinsic evidence, so you don’t know the beneficiaries and the only remedy is a resulting trust. Under the modern trend both of them get treated with a constructive trust. 4/24/06 Intervivos Trusts – Intent to create trust It is an ongoing gift, bifurcate the gift. The property is principle and interest, the takers of the gift are trustee and beneficiaries, the beneficiaries are possessory estates and future interests. Delivery means to fund the trust, deliver legal title to the trustee. And the beneficiaries must be ascertainable. If the trust instrument is silent is the default rule that the trust is revocable or irrevocable? Gifts are irrevocable so trusts should also. This is the common law rule. 2 states are the opposite, CA is one of them. Where a trust is silent, presume it is revocable. As far as revoking – If the settlor adequately expresses the intent to revoke a revocable trust, then the trust is revoked. All the ways to revoke a will can also be used to revoke a trust. But those are not the only ways. Anything that adequately express intent counts. If the trust provides for a particular method of revocation, that that will trump. If the court deems that to be the only form of revocation then it is. Classic standard is that it can revoked by delivering an instrument to the trustee. WHAT IS THE EXTENT OF THE BENEFICIARIES INTEREST? Ask that question with respect to each the principle and the income. If trustee is breaching trust – sue for breach of trust B’s right can be of two standards: Mandatory – Is it mandatory on the trustee that he has to give it out? Discretionary Shall means mandatory, may is discretionary. What do you have to do to show a breach of trust if it is discretionary? Trustee owes the beneficiary a fiduciary duty. If discretionary then before exercising discretion trustee should: 1) take into account settlor’s intent, and 2) check on the status of the beneficiary (called the duty to inquire). Fiduciary duty is high. Trustee sends out questionnaire to beneficiary and the B does not respond. No follow up so not enough inquiry. Breach is fairly bright line standard. If B had returned the questionnaire, now should they get money? Look at settlor’s intent. Did the settlor give a standard? Comfortable support and maintenance means to maintain the standard the B had at the time the trust was made. Can the trustee take into consideration the B’s other means? General rule is no. Trustee has a duty to act reasonably and in good faith. Can the settlor modify the trustee’s duty? If the settlor says sole and uncontrollable discretion. Can’t really do sole and absolute discretion, but the courts will modify the standard to get rid of reasonable standard, only must act in good faith. 3rd Type of Trust: Trustee shall distribute all the income among the children as the trustee deems appropriate. What is the children’s interest in the trust? This is called a sprinkle or spray trust. It is a hybrid trust. Can a creditor reach a beneficiary’s interest in a trust? Creditors can reach any person’s property if the interest is transferable. Is the beneficiary’s interest in a trust transferable? Yes you can. General rule is that you can sell your interest. So the creditor can reach the interest. The creditor can step into the shoes of the beneficiary. If mandatory then easy to force the distribution. If discretionary they still step into the shoes. The creditor can sue for breach of discretion but it is breach of discretion with respect to the beneficiary, not the creditor. You can put in a spendthrift clause, this says that the beneficiary can not voluntarily or involuntarily transfer their interest. This makes it so creditors can’t reach it. Must prohibit both the voluntary and involuntary transfer. But, some creditors are not blocked by a spendthrift clause. Those are generally: 1) Spouses or Ex-Spouses (alimony payments); 2) Child support; 3) Da Gubment; 4) Creditors who provided basic necessities. Court creditors can not pierce the spendthrift clause, but the modern trend is changing that. What if I create a trust and put myself as beneficiary? This is like me using a trust as a shield against creditors. This is a no go. The rule here is that a spendthrift clause is null and void. Any creditor can step into shoes and force mandatory payments, but they can also force discretionary payments. Turns them into mandatory payments. Support Trusts – Just give enough for support. The key is not the presence of the word support, but rather the formula for distribution. The trustee shall distribute as much income, and if necessary principle, as necessary for the beneficiary’s support. A support trust automatically implies a spendthrift clause. It is a support trust if the amount to distributed is limited to the amount necessary for support. 4/26/06 3 types of trusts – Mandatory, Discretionary, Sprinkle Trustee has a duty to inquire, and then exercise discretion in good faith and reasonably. The settlor can modify that duty and we will de-emphasize the reasonable part. Trustee should consider settlor’s intent, was there guidance in the trust provisions. Reasonable support and maintenance means the standard they had become accustomed to before becoming a beneficiary. Creditor has the right to step into the beneficiaries shoes. If you don’t like that, the settlor can put in a spendthrift clause. This makes it non-transferable so creditors can not step in. Four creditors are immune to the spendthrift clause. As a general rule we do not want settlors who are also the life-beneficiary to be able to use a spendthrift clause. Also settlor can not hide behind discretionary provisions. Creditors can force. Support trust will have spendthrift clause implied. DEATH OF THE TRUST A trust is created when it is funded. A trust dies when the bucket is empty. The trust will empty pursuant to settlor’s intent. In the classic trust the settlor does not retain any interest. That is our starting assumption. If something happens, when if ever, should we be able to modify settlor’s intent. What if Wendel sets up trust and says income to Jerri and remainder to kids. Wendel is convinced that the income will be enough for Jerri. Wendel dies and later on Jerri gets cancer. This is a change in circumstance. Common Law -- If there is an unforeseen change in circumstance which is materially frustrating settlor’s intent, and all the beneficiaries consent, the trustee could petition the court and the court would probably modify the trust. Common law set a high threshold for this modification doctrine. Modern Trend – More intent based. As long as the court thinks we are promoting what the settlor really wanted. Low threshold to modify. Still need the consent of everyone. What if you can’t get the consent of all beneficiaries? Doctrine of virtual representation – If a living beneficiary is virtually in the same shoes as an unborn beneficiary then they can consent for them. Termination – Common law – If the trustee and all the beneficiaries consent, they can terminate the trust early. No one can sue anyone. If settlor retains an interest then he has to consent too. What happens if the trustee objects? The trustee will want to protect the intent of the settlor, also he is getting paid for administering the trust. So there are two subdoctrines. 1) If settlor is alive, even if he has no interest, and the settlor consents to the early termination, then we will not allow the trustee to block it. Remember, still need all beneficiaries to consent. If the trustee had already consented then no need to hear from the settlor. 2) If the settlor is dead the Clafliln doctrine kicks in. If there is an unfulfilled material purpose to the trust, we will let the trustee, in the name of settlor’s intent, to block the early termination. What is an unfulfilled material purpose? There are four well recognized ones: 1) If the trust has a spendthrift clause; 2) If it is a support trust; 3) If it is a discretionary trust; 4) If the trust specifically provides that the beneficiary is not supposed to get it until a certain age. Common Law treats settlor more as the owner. Modern Trend treats beneficiaries more as the owner. The trust only covers property which is actually in the trust. Intervivos trusts avoid probate, but testamentary trusts do not. So you are going to need a will regardless, because the intervivos trust will probably not cover everything. In the will you say, I give the rest, residue, and remainder of my property to the trust. It is called a pour-over clause. You are pouring your probate property into the trust. So in reality the trust is going to dispose of the property. But the trust has not been created with wills act formalities. How can we do that? Incorporation by reference. We incorporate the trust instrument into the will. We don’t need funding to incorporate by reference. We don’t even have to sign the trust instrument. All you need to show is that the trust instrument was in existence at the time the will was created. You get a testamentary trust. The problem is that this is subject to probate so not efficient, and also what if you amend your trust after executing the will? No good, you could not amend the trust, that would not be incorporated. We can also use acts of independent significance. The will can make reference to acts of independent significance. The will makes reference to the trust but for the trust to have independent significance it has to be funded intervivos. There must be something in the bucket when you are alive, and also something is there when you die. So the independent significance of the trust was to manage and distribute the property that was already in it. Subsequent amendments to the trust are ok because independent. But with respect to the property that was being poured over the court called it a testamentary trust and looked over it. UTATA – The pour-over clause will be valid as long as three requirements are met: 1) The will has to identify the trust; and 2) The terms of the trust must be set forth in a written instrument other than the will; and 3) The trust instrument must be executed before or concurrently with the execution of the will (so basically incorporation by reference with the added requirement that the trust document must be signed) If UTATA is met then the trust will not be subject to probate court supervision and you do not need to put a dime into the trust during life. It can just be a shell waiting to be funded at death. The property still goes through probate but the trust will not be supervised. Also, there are no problems with subsequent amendments to the trusts, they are honored. The goal is to validate the pour-over clause. Lead with UTATA and then follow with the other ones. If you can’t validate the pour-over clause and it fails as a residuary clause, it will fall into intestacy. HOME NUMBER – 805 492-0061, call up to midnight. OFFICE NUMBER -- 310 506 4651 4/27/06 REVIEW Homicide Doctrine – Will says all to my daughter. If daughter kills me then treat her as pre-deceased. If there is a will or other non-probate instrument then that would be a lapse. Do we apply anti-lapse? No, CA says specifically do not apply anti-lapse, so daughter’s issue does not take. But if will says to my daughter, and if she predeceases me then to her children. Now the grandchildren claim under the gift-over clause so they take. Now lets say there is no will. When gets to issue, treat the daughter as dead. Under CA’s per capita doctrine her share drops down. Homicide doctrine does not affect intestacy. MULTI-PARTY Bank Accounts – There are 3 presumed types. In CA the modern trend is that intervivos they own in proportion to their share and at death there is a right of survivorship (nonprobate). In CA that is a re-buttable presumption. To rebut use the 3 other types and classify accordingly. If you can get it classified as an agency account then it will go into probate. UNFULFILLED MATERIAL PURPOSE (Claflin Doctrine) – Example is he sets up a trust to send daughter to college. If settlor dies and daughter is in 7th grade and she wants to terminate, the material purpose would be unfilled so trustee could block. USE OF EXTRINSIC EVIDENCE – Only need to know CA. But under mis-description (and in all situations) we can take extrinsic evidence but not necessarily re-write the will. We can construe, but not re-write. Interested witness doctrine. We did 5 approaches, but we only need to know the CA one. It is statutory and clear. PARTIAL REVOCATION BY ACT – Destructive act with intent to revoke is valid revocation. I give a total of $10,000 to my daughters Carolyn and Kristin. Then draw a line through Kristin. Should be $5,000 each but then the line messes things up. Some jurisdictions send it all the way to intestacy. Modified approach is to send it to residuary (this is general rule and presumed CA rule). 3rd approach is to give effect to class gift and give all money to Carolyn. If another name listed there then talk about DRR and talk about Codicil and Substantial compliance with holographic codicil. DRR – When name is struck and replaced with another name, look at relationship between the parties (within the same families), and other misc. factors. FUNDING IV TRUSTS – “Future profits” don’t fund it. But when the profits are earned and you put them in bank account of trust they will fund at that time. SURVIVIAL REQUIREMENTS – BRING CALCULATOR 5/6/06 Revocation by act – Does it have to effect printed words? Talk about common law and modern trend both. Insane delusion – Lead heavily with CA law. NO CONTEST CLAUSE General Rule – Valid but construed narrowly. If you sue and lose, the general rule is that you take nothing. What if you sue and win, then general rule is that you take nothing. If you sue and show that the no-contest clause was result of wrongful conduct then the no-contest clause will be struck. Exception 1 to the general rule -- If you sue and win for wrongful conduct, then there is a good probability that the court would assume that the no-contest clause was a result of the wrongful conduct and it should be thrown out. Exception 2 – Even if you sue and lose, if you come within the scope of the two statutory exceptions then we still won’t enforce the no-contest clause. FIR need reasonable cause. If suing just out of frustration (strike suit) then you are done for. Alternatively, if you are suing someone involved in executing or drafting the will then probable cause for the no contest clause to be not enforced. DISCLAIMER – Can’t use disclaimer to try and increase your share, look for advancement. Holographic Wills (Intent) -- Look talk about all 3. Because CA legislature may have wanted to adopt the contextual approach. TRUSTS – Only common law except for 2 exceptions – UTATA (incorporation by reference with the trust instrument signed) Other exception – Trust that is silent as to revocability, common law is irrevocable, but CA and modern trend is revocable. MODIFICATION – Unforseen changes that frustrate the settlor’s intent. All beneficiaries consent so you can modify. Beneficiaries will petition court.