PEPPERDINE UNIVERSITY SCHOOL OF LAW MIDTERM EXAM: Wills & Trusts Essay TOTAL NO. OF QUESTIONS: 1 SPRING 2007 TOTAL NO. OF PAGES: 3 PROFESSOR MENDOZA TIME: One (1) Hour _________________________________________________________________ INTRODUCTION 1. 2. Write Legibly. Be sure to reach a definite conclusion on the issues identified. The mere statements of arguments will not be considered as an acceptable manner of addressing the issues. Be sure to give the full reasoning behind your answer. Merely stating a conclusion will not be considered as an acceptable manner of addressing the issues. If you believe a question is unanswerable as stated, tell me any assumptions you have made and answer the question. In addressing the issues presented, use the statutes that are excerpted in the book and the general rules as discussed in class unless specifically stated otherwise in the question. The exam consists of one question. The recommended time for the completion of the question is one hour. The exam is open book and open note. No commercial outlines are allowed. 3. 4. 5. 6. ESSAY QUESTION NO.1 Tom and Mary Robinson had been married for 30 years having lived in the same community property state for that period of time. They had three children Eric, Grace and Charles. Eric and his wife Esther had six children – Andrew, Bill, Charles, Diana, Elaine and Frank. Grace had one child – Greg. Charles was single and childless. Tom died last year. Mary owned the following property. • • • • • Cash in Bank – Payable on death designation To Eric Principal Residence Life Insurance Policy – Mary is the insured and Owner of the policy; Eric is the beneficiary. Investment in IBM stock Office building located in another State $ 20,000.00 $ 500,000.00 $ 1,000,000.00 $ $ 50,000.00 500,000.00 Eric is an attorney and was very close to Mary. He lived next door to her and would visit her frequently. Although ill and lonely, Mary was of sound mind. She was very appreciative of Eric’s attention and was miffed at the lack of attention given by Grace and Charles. Grace and Charles lived in a neighboring state. At Mary’s request, Eric drafted a Last Will and Testament for Mary. She duly signed the Will which was attested by the required credible witnesses. In the Will, seventy five percent of Mary’s estate was left to Eric. The remaining twenty-five percent was to be shared by Grace and Charles, share and share alike. Eric was also named as the Executor. Mary signed the Will although there was some evidence that Mary had not read the Will before she signed it. Mary kept the signed Will and Eric kept an unsigned copy of the Will in his office. Shortly after signing the Will there was reconciliation between Mary, Grace and Charles. There was to be a family reunion but Grace and Charles were tragically killed on the trip to see Mary. Mary filled with heartache on the loss of her children died several months later. Eric wanted to move on opening probate for his mother’s Will. The Will was not any where to be found among Mary’s important papers. This was puzzling because Mary was known to be a very careful person especially as regards to the safekeeping of important papers. Please answer the following questions fully and completely. 1. Assume for purposes of this question that Mary died without a valid will. A. As discussed in class, categorize the nature of each type of property in the inventory listed above. Discuss how each item of property passes from the estate of Mary. a. First Categorize as Probate or Non-Probate Assets i. Non-Probate: Property that passes according to the instrument that created it. I.e. Trust, Joint Tenancy. ii. Probate Property: Passed through a Will or Intestacy iii. Property: 1. Cash a. Payable on Death Designation: Ch. 5. Will Substitute. Governed by contract so non-probate. 2. Residence a. Probate property unless held in joint tenancy with right of survivorship. 3. Life Insurance a. Contract – Non-Probate 4. IBM Stock a. Probate i. If this was through a partnership with a buy sell agreement, then it is a will substitute and passes through contract. 5. Office Building a. Probate i. Look for a question relating to the administration. Where should probate be opened? ii. General rule: domicile or intestate decedent. 1. However, when RE in another state, must open ancillary probate in the place where the real property is located. B. What result would obtain if Eric timely and properly disclaims any interest he would receive through intestacy? What would be Eric’s motivation for disclaiming? In your answer, discuss the various systems used in the United States to determine the shares of descendants. a. Look to Tree of Consanguinity. i. First to Spouse (Deceased, so entire estate to next level) ii. Then to Decendents by representation 1. Pro Rata to any decendants surviving the deceased testator, or their decendants if pre-deceased. a. Grace and Charles Pre-Deceased so their interest goes to their kids. b. Charles does not have kids, so his interest moves horizontally and is split 50/50 between Grace’s estate and Eric. c. Since Eric Disclaims, he is deemed to have predeceased the testator. This makes all first generation children predecedents. So this makes the grandchildren the first line of takers, so everyone takes pro-rata and Greg drops from 50% to 1/7. This is where there are several distribution systems: d. However, a disclaimed interest iii. Distribution Systems: 1. Distribution system used in looking at shares of decedents 2. English Per Stirpes: a. Go Back to the level closest to the decedent regardless of who’s alive and who’s dead. b. Even if Eric is deemed to predecease Mary his children still only take 50%. 3. Modern Per Stirpes a. All Grandchildren take 1/7. 4. Generational Per Stirpes [UPC § 2-1106(b)(3)(A)] a. Same as Modern See P. 135 PROBLEM 2. As to the document purporting to be the Last Will and Testament of Mary: A. As discussed in class what are the requirements in having a valid, attested Will? What is the purpose of the requirements? a. Requirements: i. Testamentary Intent 1. Reason: ii. Testamentary Capacity iii. A writing 1. Formality, Channeling Ritual, evidentiary, protective Function iv. Signed by Testator v. Signature of a attesting witnesses 1. Ritual, evidientiary, protective Function b. Final: Discuss a defect in testamentary intent, insane delusion etc. Assume for purposes of this specific question that Mary’s Last Will and B. Testament is valid. • What is the effect of Grace and Charles predeceasing Mary? (a) Testamentary Distribution takes precedence over the tree of consanguinity. (b) Issue of Lapse: What are the conditions precedent for a deposee to take property under a will. (c) In intestacy you have the protection of representation. In wills you have the doctrine of lapse. (d) General Rule is Lapse = Fail. The gift therefore fails to Grace and Charles. (e) If this was a general or specific devise it would lapse to the residuary. i. Could go either way. Since Eric getting so much, it could be a residuary. But if it is a general devise there would be no residuary. ii. If there is no residuary to pick up the gift, it falls into intestacy 1. Unless there is an exception on point: 2. No Residue of a Residue Rule 3. A residue that lapses cannot be allocated to the other residuary taker. 4. Unless, the statute in that state allows for such a reallocation of the residuary. 5. UPC § 1990 allows this. iii. Also consider there may be an anti-lapse statute in the state. 1. Allows for the replacement of a beneficiary. 2. Usually a close kindred. 3. If there is no one to replace, then still will lapse. (f) Simultaneous Death Rules may apply. Look for that. What is the effect of not finding the signed Last Will and Testament of Mary? Can the Will be presumed to be revoked? Issue is one of Revocation: A will can be revoked by a writing or a physical act. is required to revoke by writing or act? (a) Act: Destroy, obliterate, burn (b) Intent must be manifest. Intent and Act must be present. • a. A will not properly revoked continues to be valid. (c) One case where will was not found it was presumed to not be in decedents possession so considered revoked. (d) Another Case allowed a second copy ot be entered into evidence. (e) Not finding a will creates a rebutabble presumption of revocation. C. Assume for purposes of this specific question that the validity of Mary’s Last Will and Testament has not been determined. You represent Greg, Grace’s only child. What legal theory do you suggest to question the validity of the Will? What remedy would you suggest? a. Undue Influence by Eric i. A presumption would arise because he’s an attorney and a beneficiary. ii. Undue influence is an influence that replaces the thought processes of Mary with the thought processes of Eric. 1. Factors Test P. 159 (a) Susceptibility i. She was of sound mind ii. He was close to her (b) Influencer’s Disposition or Motive (c) Influencer’s Opportunity i. He was close to her (d) Disposition is the result of the Influence. i. 75% vs. 33% in intestacy iii. Remedies: 1. Deny Probate and go through Intestacy 2. Constructive trust b. Fraud c. Duress Be on the lookout for conclusory statements.
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