W _ T - FINAL EXAMS

Final Examination: Wills & Trusts Fall 1990 Professor Wendel Total No. of Questions: 13 Time: ? Hour QUESTION I For each of the following problems, A, B, and C, begin each problem by assuming the following family, all of whom are alive (D, C's brother, is married to E). Assume there are no other heirs for any of the parties involved in the problems: A. Assume B divorces A and B remarries X. X adopts C and D. C dies intestate and F, D, G and H predecease C. How will C's estate be distributed under the Uniform Probate Code? How will C's estate be distributed under the Missouri Probate Code? B. Assume A dies intestate and B, C, D, G, H and I predecease A. How will A's estate be distributed under a strict per stirpes approach? How will A's estate be distributed under a per capita by representation approach? How will A's estate be distributed under a per capita by kinship approach? Which approach does the Uniform Probate Code follow? Which approach does Missouri follow? C. Assume that F had a child, Z. Z died intestate and A, B, C, D, and F and G all predecease Z. How will Z's estate be distributed under the Uniform Probate Code? How will Z's estate be distributed under the Missouri Probate Code? QUESTION II D's will, witnessed by X and Y, leaves $100,000 to child X, $10,000 to child Y, and the residue ($10,000) to child Z (assume D is survived by no other heirs). A. B. How wilI D's estate be distributed undeR the Uniform Probate Code? How will D's estate be distributed under the Missouri Probate Code? QUESTION III TestatoR led a normal life. The testator believed, however, that his family did not really love him. Accordingly, in his will he left one dollar ,to each member of his family and left the residue of his huge estate to others. When the will was probated, the family was shocked to learn of the testamentary distribution. Can the family challenge the will? If so, what would be their strongest claim? How successful do you think the family will be? QUESTION IV Decendent executed a will leaving her entire estate to her spouse. She later gave birth to a daughter and executed a codicil giving 10% of her estate to her daughter. She later gave birth to a son and revoked the codicil intending to execute a new codicil giving 5% of her estate to each of her children. Gefore she was able to execute the new codicil, however, she passes away. She has a net estate of $100,000. Who gets what under the Uniform Probate Code, and why? QUESTION V Page 1 of 20 D executed a valid will containing a bequest of "my dining room set to A." At the time, D owned a Danish modern dining room set worth $600. Ten years later, D inherited a Chippendale dining room set worth $600,000. He thereafter sold teh Danish modern set for $300, which he deposited in a bank account he opened in him name for that purpose. When he got home he wrote "for A" on the cover of his bank book. Two years later, D died. To what is A entitled? QUESTION VI At common law, in what respects were the fiduciary obligations and powers of a trustee different from the fiduciary obligations and powers of an executor? QUESTION VII X creates an irrevocable trust subject to a testamentary power of appointment. The trust provisions provide that the income is to be paid annually to Y, and upon Y's death, the corpus is to be distributed to Z. Y and Z agree to terminate the trust. Can they force the trust to be terminated? QUESTION VIII Your client comes to you seeking advice on estate planning. He is married with three young children. What advice would you give him with respect to using a testamentary trust, and why? Would you recommend separate trusts or a single trust, and why? QUESTION IX During his lifetime, X gave $5,000 to his son A, $1,000 to son B, and nothing to son C (assume X has no other heirs). X dies intestate with a net estate of $8,000. How is the estate most likely to be distributed at common law? Under the Uniform Probate Code? QUESTION X Testatrix executed will #1 in 1968. In 1973, she executed will #2 which contained a clause expressly revoking will #1. IN 1984, the testatrix took both wills to her attorney an in teh presence of the attorney tore will #2 into pieces and threw the pieces into the wastebasket, saying that she wanted to reaffirm will #1. Testatrix died in 1989. Which will, if eitehr, should be admitted to probate? QUESTION XI Both the Missouri Probate Code and the Uniform Probate Code recognize a surviving spouse's right to claim an elective share. The Missouri Probate Code differs, however from the Uniform Probate Code in at least four significant respects. Identify the four most significant differences. QUESTION XII Testator bequeaths "$12,0OO to James Jones's children, Carolyn, Paul and John." The testator was on his way to Paul's house to have dinner with Paul and his wife, Kathy, and their two children, Brice and Jefferson, when the testator suffered a massive heart attack and died instantly. The testator lost control of the car and the car hit and killed Paul. Who takes what at common law? Who takes what under the Uniform Probate Code? QUESTION XIII X marries Y. They have one child, A. On April 1, 1990, X dies intestate with a gross estate of $200,000. Prior to his death, X made the following transactions: Page 2 of 20         1/1/75 Transfer in trust for Q, retained power to revoke $250,000 6/1/87 Irrevocable gift to M 24,000 1/1/88 Irrevocable gift to M 24,000 6/1/88 Irrevocable gift to M 25,000 1/1/89 Irrevocable gift to M 25,000 5/1/89 Transfer in trust for P, no power to revoke $150,000 6/1/89 Irrevocable gift to M 26,000 1/1/90 Irrevocable gift to M 26,000 As a result of X's death, Y received $25,000 in life insurance proceeds from a policy on which X had paid the premiums, and $25,000 in securities that X had transfered from his account to a joint account with a right of survivorship. X's funeral expenses, administration expenses, debts, and statutory family protection claims amount to $50,000. What is Y's elective share? (Please show your calculations) Would you advise Y to elect to claim an elective share? If so, how would it be funded? Page 3 of 20 Sample MC Part 1 Examination: Wills & Trusts Sample Professor Wendel Total No. of Questions: 28 (see Part 2 for 29-57) Time: Sample Questions Sample Exam Questions Part 1 Multiple-Choice Exam Questions 1 through 28 IN ALL OF THE FOLLOWING QUESTIONS, YOU MAY ASSUME THE CALIFORNIA PROBATE CODE TO BE IN EFFECT. 1. Amy Bates died on January 12, 1987. She was survived by her parents, Bill and Emily Bates. Her estate consisted of a house which she and her husband, Ed, had purchased during their marriage and a bank account consisting entirely of Amy's earnings and having a balance of $100,000 after payment of all debts and costs of probate. Ed died intestate in 1985 and, since the house was community property, his interest passed to Amy. Ed's mother is still living. How should Amy's estate be distributed? a. The house to Ed's mother and the $100,000 in the bank account to Amy's parents, equally. b. One-half interest in the house to Ed's mother; the other one-half interest in the house and the $100,000 in the bank account to Amy's parents, equally. c. One-half interest in the house and one-half of the bank account to Ed's mother; one-half interest in the house and the other one-half of the bank account to Amy's parents, equally. d. All to Amy's parents, equally. Answer: b. Amy was not survived by a spouse or issue. She had a predeceased husband, Ed, from whom she inherited community property within fifteen years of her death. Under Section 6402.5, the interest which she inherited from Ed must be returned to Ed's mother. The remainder of the estate passes to Amy's parents equally. 2. Assume that, in Question 1 above, Amy had remarried in 1986 and was survived by her second husband, John. How should Amy's estate be distributed? a. One-half interest in the house to Ed's mother; one-fourth interest in the house and one-half of the bank account to John; one-fourth interest in the house and one-half of the bank account to Amy's parents, equally. b. One-half interest in the house to John; one-half interest in the house and all of the bankaccount to Amy's parents, equally. c. One-half interest in the house to Ed's mother; one-half interest in the house and one-half of the bank account to Amy's parents; one-half of the bank account to John. d. One-half interest in the house and one-half of the bank account to John; one-half interest in the house and one-half of the bank account to Amy's parents, equally. Answer: d. Since Amy was survived by a spouse, John, Section 6402.5 does not apply. Under Section 6401, John takes half of the estate since it is Amy's separate property and since Amy was survived by parents. Her parents take the remainder equally under 6402. 3. Miranda Bates died in 1986. She was survived by Kim and Tim (twin grandchildren who were the children of Miranda's predeceased son, Michael) and by her grandson, Joel (the son of her predeceased daughter, Kate). How should Miranda's estate be distributed? a. One-eighth each to Kim and Tim; three-fourths to Joel. b. One-third each to Kim, Tim and Joel. c. One-half to Kim and Tim; one-half to Joel. Answer: b. Miranda's issue will inherit her estate. Since they are all of the same degree (grandchildren are related in the second degree), they take equally under Section 6402(a). 4. Assume that, in Question 3, Miranda was also survived by one daughter, Carol. How should Miranda's estate be distributed? a. One-fourth each to Carol, Kim, Tim and Joel. b. One-sixth each to Kim, Tim and Joel; one-half to Carol. c. One-sixth each to Kim and Tim; one-third to Joel; one-third to Carol. d. All to Carol. Answer: c. In this situation, the issue are not all related in the same degree. Carol is related in the first degree and Kim, Tim and Joel are related in the second degree. Under Section 240, you divide the estate at the first level at which there are living issue. It is divided into as many shares as there are living issue at that level and predeceased issue who left living issue. We thus divide it into thirds with Kim and Tim dividing Michael's share, Joel taking Kate's share and Carol inheriting her share. 5. John died on January 11, 1987. He was survived by his wife, Harriet, and by his two children, Moe and Joe. His estate consisted entirely of community property. How should the estate be distributed? a. All to Harriet. b. One-third to Harriet and one-third each to Moe and Joe. c. One-half to Harriet and one-fourth each to Moe and Joe. d. One-half to Moe and one-half to Joe. Answer: a. Under Section 6401(a), the community property passes to the surviving spouse. Page 4 of 20 6. Assume that, in Question 5 above, John's estate had consisted of both separate and community property. How should the estate be distributed? a. All to Harriet. b. All community property to Harriet, one-third of the separate property to Harriet and two-thirds of the separate property to Moe and Joe, equally. c. All community property to Harriet, one-half of the separate property to Harriet and one-half of the separate property to Moe and Joe, equally. d. One-third of the separate and community property to Harriet and two-thirds of the separate and community property to Moe and Joe, equally. Answer: b. Under Section 6401(a), the community property passes to Harriet. Under 6401(c)(3), one-third of the separate property passes to Harriet where the decedent leaves more than one child. Under 6402(a), the issue take the remainder equally. 7. Tim died intestate in 1986. He was survived by a brother, John, who was the child of Tim's father and mother. He was also survived by two half-sisters who were the children of Tim's mother from a prior marriage. Tim's parents were both deceased and Tim had no issue. How should Tim's estate be distributed? a. All to John. b. One-half to John and one-fourth each to Tim's two half-sisters. c. One-third each to John and Tim's two half-sisters. d. All to Tim's two half-sisters, equally. Answer: c. Under Section 6402(c), where the decedent has no issue nor parents, the estate passes to the issue of parents. Under 6406, relatives of the halfblood take as if they were relatives of the whole blood. 8. Michael died intestate in 1986. He had never been married nor had he fathered children. His parents predeceased him. He was survived by his paternal grandfather and by two uncles who were brothers of Michael's predeceased mother. How should Michael's estate be distributed? a. All to Michael's grandfather. b. One-half to Michael's grandfather; one-fourth each to Michael's uncles. c. One-third each to Michael's grandfather and his uncles. d. All to Michael's uncles. Answer: a. Under 6402(d), where the decedent is not survived by issue, parents or issue of parents, the estate passes to the grandparents. Issue of grandparents take only when there is no surviving grandparent. 9. Suppose that, in Question 8, all of Michael's grandparents had predeceased him. Suppose further that, in addition to the two surviving uncles mentioned above, there was an aunt who was the sister of Michael's father and a cousin who was the issue of a predeceased brother of Michael's father. How should Michael's estate be distributed? a. One-third each to Michael's aunt and two surviving uncles. b. One-half to Michael's aunt; one-fourth each to Michael's two surviving uncles. c. One-fourth each to Michael's cousin, aunt, and two surviving uncles. d. All to Michael's surviving uncles. Answer: c. Where there are no surviving issue, parents, issue of parents, or grandparents, the estate passes to the issue of grandparents under Section 6402(e). If they are all of the same degree, they take equally. Here they are not since the aunt and uncles are related in the third degree whereas the cousin is related in the fourth degree. Under Section 240, it is divided into four shares with the aunt and uncles taking one-fourth and the cousin taking his parent's share. 10. Assume that, in Question 8 above, Michael's parents and grandparents all predeceased him and that Michael's parents and grandparents left no surviving issue. Assume further that a great-uncle of Michael is surviving as well as two second cousins once removed who are descendants of Michael's great-grandparents. How should Michael's estate be distributed? a. To Michael's next of kin, equally. b. All to Michael's great-uncle. c. One-half each to Michael's second cousins once removed. d. One-third each to Michael's great-uncle and his second cousins once removed. Answer: [Unfair question, since I did not give you the degrees of relationship.] b. The great-uncle is a descendant of the great-grandparents and is related in the fourth degree. The second cousins once removed are also descendants of the great-grandparents and are related in the seventh degree. Section 6402(f), the estate goes to the next of kin. That happens to be the great uncle since he is related in the fourth degree. 11. Ted and Diane were married and had one son, Rick. In 1978, they were contacted by the Department of Social Services and asked to provide care for a child whose parents were unable to take care of the child. They took the child, Cara, into their home and provided for all of her care, maintenance and support. On numerous occasions, they inquired about adopting her but were told that the parents were unwilling to consent to adoption. Ted and Diane both held Cara out as their daughter and Rick referred to Cara as "my sister." On July 1, 1985, Ted died leaving both community and separate property. If Ted died without a valid will, to whom should his estate be distributed? a. The community property and one-half the separate property should be distributed to Diane; the remainder of the estate should be distributed to Rick. b. The community property and one-third of the separate property should be distributed to Diane; the remainder of the estate should be distributed to Rick. c. The community property and one-half of the separate property should be distributed to Diane; the remainder of the estate should be distributed to Rick and Cara, equally. Page 5 of 20 d. The community property and one-third of the separate property should be distributed to Diane; the remainder of the estate should be distributed to Rick and Cara, equally. Answer: d. Cara is a foster-child of Ted and Diane since she was never adopted. Foster-children can inherit under 6402(a) if, under 6408, the relationship began during the minority of the foster-child and continued throughout the parents' joint lifetimes and it is established by clear and convincing evidence that the foster parent would have adopted the person but for a legal barrier. In this case, those elements seem to be present and Cara should inherit. Diane takes the community and one-third of the separate property under 6401(a) and (c)(3)(A). The remaining two-thirds is split between Rick and Cara. 12. Bob and Mary Wilson, husband and wife who were domiciled in California, were fatally injured in an automobile accident. When the first person arrived on the scene, both Bob and Mary appeared to be dead. The paramedics could find no sign of life in either party when they arrived on the scene. Bob and Mary had no children of their marriage; however, Bob had a child, Heather from a previous marriage. Both Bob and Mary's parents are living. If Bob died without a valid will and owning only community property, his estate will be distributed as follows: a. All to Mary's estate. b. All to Heather. c. One-half to Mary's estate and one-half to Heather. d. One-half to Heather and one-half to Bob's parents. Answer: b. Under 6403, if an heir fails to survive the decedent by 120 hours, that person is deemed to have predeceased the decedent. Mary did not survive for 120 hours. Since Bob is treated as having no surviving spouse, the entire estate passes to Heather under 6402(a). 13. Rob died on July 1, 1985. His only assets were a bank account with a balance of $5000 and a house. The house had been purchased by Bob and his wife, Lucy, in 1975. When Lucy died intestate in 1977, Rob inherited her share of the house. Rob was survived by his father, Ed. Lucy's mother is still alive. If Rob died without a valid will, to whom should his estate be distributed? a. One-half interest in the house to Lucy's mother and one-half interest in the house and all of the bank account to Ed. b. One-half interest in the house and the bank account to Lucy's mother and the other one-half interest in the house and bank account to Ed. c. The house to Lucy's mother and the bank account to Ed. d. The entire estate to Ed. Answer: a. Under 6402.5, since Rob died without a surviving spouse or issue, the interest inherited from Lucy must be returned to Lucy's mother. The remainder of the estate passes to Rob's father under 6402(b). 14. Kelley executed a valid written attested will which made a bequest of $30,000 to her daughter, Ann. After Ann married a man of whom Kelly disapproved, Kelly drew a line through the "30,000" and wrote the figure "1,000" above it. Kelley recently died and her will has been offered for probate. The court should: a. Admit Kelley's will to probate as originally written and distribute $30,000 to Ann. b. Admit Kelley's will to probate but rule that the $30,000 bequest to Ann has been revoked. c. Admit Kelley's will to probate and distribute $1,000 to Ann. d. Refuse to admit Kelley's will to probate. Answer: b. Under 6120(b), the gift of $30,000 has been revoked by being canceled. The attempted gift of $1000 fails as a testamentary devise since it was not executed with testamentary formalities. Under these circumstances, you ask the question whether Kelley would have revoked the first gift if she had known that the second was invalid. Because of the dissimilarity between $30,000 and $1,000, it is unlikely that the court will invoke the doctrine of dependent relative revocation to sustain the $30,000 gift. The revocation does not invalidate the will as a whole since it goes only to the $30,000 gift. 15. In 1984, Tom executed a will which provided that his estate should be divided between his two friends, Bob and Ed. After the will was executed, Tom acknowledged to Bob and Ed, both of whom were present at the same time, that it was his will and requested that they be witnesses. They signed the will as witnesses. In 1986, Tom executed a codicil to the will which removed Bank of America as Executor and confirmed, in all other respects, his last will and testament. The codicil was signed in his attorney's office and the attorney and the attorney's secretary signed as witnesses. Tom died on December 1, 1987, without having revoked the codicil. a. The 1984 will and the 1986 codicil should be admitted to probate since the 1986 codicil republished the will. b. The 1984 will and the 1986 codicil should be admitted to probate since the 1986 codicil incorporated the will by reference. c. The 1984 will and the 1986 codicil should be admitted to probate since the 1986 codicil was an act of independent significance. d. The 1984 will should not be admitted to probate since it was not validly executed but the 1986 codicil should be admitted to probate. Answer: a. This is the best answer since a codicil has the effect of republishing the will. Since the first will was valid despite the interested witnesses (see 6112(b)), it is entitled to probate. Incidentally, Bob and Ed both take their gifts because republication cures the presumption created by the interested witness rule. 16. Pam and Eric were married in 1983. Pam, who had inherited property from her father prior to her marriage, executed a will leaving all of her estate to Eric, if he survived her, and, in the event he predeceased her, to Eric's sister. Eric's sister subsequently died in 1985, leaving one child, Esther. Pam and Eric were divorced in 1986 and Pam was in the process of having a new will prepared leaving her estate to her church when she was killed in an automobile accident. Pam was survived by her mother. How should Pam's estate be distributed? a. All to Eric since he survived Pam. b. All to Esther. c. All to Pam's mother. d. All to Pam's church. Page 6 of 20 Answer: b. The dissolution of Pam and Eric's marriage revoked the gift to Eric and he is treated as having predeceased her. CPC 6122. The alternative gift to Eric's sister lapses due to the fact that she predeceased Pam. Under 6147, if the gift is to kindred of a former spouse who predeceases the testator but leaves issue, the issue take. 17. Ed died on November 1, 1986. His will, which has been admitted to probate, leaves the following bequests: "I give, devise and bequeath 200 shares of my Goodyear Tire & Rubber Company stock to my son, William. I give, devise and bequeath the remainder of my Goodyear Tire & Rubber Company stock to my daughter, Christina." At the time Ed's attorney drafted the will, Ed owned 300 shares of Goodyear Tire & Rubber Company stock. Subsequent to the execution of the will, Goodyear Tire & Rubber Company stock split 2 for 1 so that Ed thereafter owned 900 shares. On September 15, 1986, Goodyear Tire & Rubber Company announced a $1.00 per share cash dividend to all stockholders of record on October 31, 1986. The cash dividend was received on December 1, 1986. How should the stock and the cash dividend be distributed? a. 200 shares of Goodyear stock to William; 700 shares of Goodyear stock to Christina; the cash dividend to the estate. b. 600 shares of Goodyear stock to William; 300 shares of Goodyear stock to Christina; the cash dividend to the estate. c. 200 shares of Goodyear stock and $200 cash dividend to William; 700 shares of Goodyear stock and $700 cash dividend to Christina. d. 600 shares of Goodyear stock and $600 cash dividend to William; 300 shares of Goodyear stock and $300 cash dividend to Christina. Answer: a. The bequest of 200 shares of Goodyear stock to William is a general bequest since it does not identify which 200 shares are given. Under Section 6171, a general bequest does not qualify for the stock split shares. As to the cash dividend, since Ed was alive on the record date (October 31), the cash belongs to the estate. 18. Kim's will made the following residuary bequest: "All of the rest, residue and remainder of my estate I leave to my nephews, share and share alike." Kim had four nephews at the time of making the will. Two of the nephews, Tim and John, predeceased Kim. John died testate in 1985 and his will left his entire estate to Tim. Tim died intestate in 1986 leaving his wife and one child as his heirs. How should the residue of Kim's estate be distributed assuming Kim died without any other kindred? a. It should be divided equally between Tim's child and the two living nephews. b. It should be divided equally between the two living nephews. c. It should be divided one-half to Tim's child and one-fourth each to the two living nephews. d. It should be divided one-fourth to Tim's widow, one-fourth to Tim's child, and one-fourth each to the two living nephews. Answer: a. The gift of the residue to Tim and John lapses since they predeceased Kim; however, the anti-lapse clause applies since Tim was kindred of Kim. Tim's child takes Tim's share. The other two nephews also receive a share. 19. John owned Blackacre which was located in Orange County, California. In 1982, John executed a will which left Blackacre to Bill. In 1986, John sold Blackacre to Sam. Sam paid $50,000 in cash and gave John a $50,000 promissory note secured by a trust deed on Blackacre. Sam has paid $10,000 on the note and the current unpaid balance is $40,000. The $50,000 cash and the $10,000 payment were deposited in a bank account at First National Bank. John died in 1987 and Bill survived. How should John's estate be distributed? a. $60,000 cash and the promissory note to Bill; the balance as the will directs. b. $10,000 cash and the promissory note to Bill; the balance as the will directs. c. The promissory note to Bill; the balance as the will directs. d. Nothing to Bill. The estate should be distributed to the other beneficiaries. Answer: c. Section 6172 states that where there is a specific devise of property (realty is a specific devise), the devisee is entitled to any balance of the purchase price owing from a purchaser to the testator at death by reason of the sale. In this case, that would the $40,000 unpaid balance on the note. The remainder would pass as the will directs. 20. Joan was married to Will and they had two children, Sean and Ian. In 1963, Joan and Will executed mutual wills leaving their property to the other conditioned upon survival, and at the death of the last one to die, all the property to go to the children. In 1965, Lisa was born to Joan and Will. In 1987, Joan died survived by Will, Sean, Ian and Lisa. Her will was probated in California. Lisa has asked to take an intestate share of the estate. How should the court distribute the estate? a. The entire estate to Will. b. An intestate share to Lisa and the remainder of the estate to Will. c. An intestate share to Sean, Ian and Lisa and the remainder of the estate to Will. d. One-third of the estate to Lisa and the remainder of the estate to Will. Answer: a. Section 6570 provides that, with certain exceptions, if a testator fails to provide in the will for a child born or adopted after the execution of the will, the omitted child receives an intestate share. One of the exceptions listed in Section 6571 is that, at the time the will was executed, the testator had one or more children and devised substantially all of the estate to the other parent. That is the case here. 21. Bill purchased a form will from a stationery store in 1986 and completed all of its provisions. He left $5000 each to his sisters, Sally and Tina. The remainder of his estate he left to his wife, Margaret. Bill's sister, Sally, was one of the two witnesses to the will. Bill died in Los Angeles in 1987, survived by Margaret, Sally and Tina. How should his estate be distributed? Page 7 of 20 a. $5000 each to Sally and Tina if Sally can prove that the gift to her was not procured by undue influence; the remainder to Margaret. b. $5000 each to Sally and Tina without regard to whether Sally can prove that the gift to her was not procured by undue influence; the remainder to Margaret. c. Nothing to Sally even if she proves that the gift to her was not procured by undue influence; $5000 to Tina; the remainder to Margaret. d. All to Margaret. Answer: a. Section 6112 provides that a will is not invalid because it is signed by an interested witness. It does, however, create a presumption that the witness procured the gift by duress, menace, fraud, or undue influence. The burden of proof to show there was no duress, menace, fraud or undue influence shifts to Sally. 22. Ben, Sr. executed a will in 1970 leaving his entire estate to his son, Ben, Jr. Ben, Jr. ran away from home in 1975 and was not heard from until after his father's death. In 1986, Ben, Sr. tore up the 1970 will, stating that it was no good since Ben, Jr. was dead. He then executed a will which revoked the 1970 will and left everything to The American Red Cross "since my beloved son, Ben, Jr. is dead." When Ben, Sr. died in 1987, Ben, Jr. showed up and petitioned the probate court to distribute the estate to him. How should the court distribute the estate? a. The entire estate should be distributed to Ben, Jr. under the 1970 will which was revived due to mistake. b. The entire estate should be distributed to Ben, Jr. since the 1970 will was conditionally revoked. c. The entire estate should be distributed to Ben, Jr. as a pretermitted heir. d. The entire estate should be distributed to The American Red Cross. Answer: c. Section 6572 provides that if the testator fails to provide for a child solely because he believes the child to be dead, the child receives an intestate share. In this case, Ben Sr. stated on the face of the will that the gift to the American Red Cross was because he believed his son Ben Jr. to be dead. 23. Hugh had two sons, Jim and John. In 1985, Jim asked his father for $50,000 to start a new business. Hugh gave him $50,000 telling Jim, as he handed him the money, "You realize that this means that I will not leave you anything when I die." Jim said nothing. Hugh died intestate in 1987 leaving an estate of $100,000. He was survived by Jim and John. How should Hugh's estate be distributed? a. Nothing to Jim; $100,000 to John. b. $25,000 to Jim; $75,000 to John. c. $50,000 to Jim; $50,000 to John. d. $33,333 to Jim; $66,667 to John. Answer: c. Although Hugh obviously intended the gift to be an advancement, Section 6409 requires that the decedent declare in a contemporaneous writing that the gift is to be considered an advancement. Here that was not done and, unless Jim acknowledges the gift as an advancement, it cannot be considered in computing his share. 24. Assume the same facts as Question 23, except that Hugh left a valid will executed in 1980. The will devised Hugh's estate to "my sons, Jim and John, equally." How should Hugh's estate be distributed? a. Nothing to Jim; $100,000 to John. b. $25,000 to Jim; $75,000 to John. c. $50,000 to Jim; $50,000 to John. d. $33,333 to Jim; $66,667 to John. Answer: c. Under Section 6174, the property given by Hugh to Jim cannot be considered an advancement since there was no provision in the will for doing that, there was no contemporaneous written statement by Hugh and there has been no acknowledgment by Jim. 25. Ed and Janet, both of whom are 50 years old, are close friends but are not related. Ed has collateral relatives but wants to make sure that Janet takes his property at death and that his relatives do not. The best advice to give Ed would be: a. Execute a will leaving everything to Janet. b. Execute a will leaving everything to Janet and disinheriting the relatives on the ground that Ed does not feel close to them. c. Execute a valid will leaving everything to Janet, disinheriting the relatives, and providing that anyone who contests the will shall receive no more than one dollar. d. Adopt Janet. Answer: [This question needs to be worded a little more artfully since the provisions for adoption of adults has been changed subsequent to the question. The best answer is probably d. since that also cuts off a contest by making Janet the only "interested person." However, the age of both Ed and Janet is stated to be 50. It is thus not clear from the facts whether Ed is older than Janet which is now a prerequisite to his being able to adopt her.] 26. Emily, an unmarried woman, gave birth to a son, Sean. Realizing that she could not provide for Sean, she placed him with an adoption agency. He was adopted by Mel and Alice Webb who already had another child, Tom. On July 1, 1986, Alice Webb died intestate leaving an estate consisting of separate and community property. If Alice died without a valid will, to whom should her estate be distributed? a. The entire estate should be distributed to her husband, Mel. b. The community property and one-half of the separate property should be distributed to Mel; the remainder should be distributed to Tom. c. The community property and one-half of the separate property should be distributed to Mel; the remainder should be distributed to Tom and Sean. d. The community property and one-third of the separate property should be distributed to Mel; the remainder should be distributed to Tom and Sean. Answer: d. A child who is adopted has a parent-child relationship with the adopted parents. Sean must be considered their child for purposes of inheritance. Since Alice died survived by a spouse and more than one child, Mel inherits her one-half of the community property and one-third of her separate property. Sean and Tom take the remainder of the separate property. Page 8 of 20 27. John executed a will leaving $5000 to his wife, Sarah, and $5,000 to Sarah's brother. The residue of his estate was left to his sister, Nan. Sarah and John were divorced prior to John's death. Sarah was survived by her son, Ted, from a prior marriage. Sarah's brother predeceased John and was survived by two children. How should John's estate be distributed? a. $5000 to Sarah, $5000 to Sarah's brother's children, and the residue to Nan. b. $5000 to Ted, $5000 to Sarah's brother's children, and the residue to Nan. c. $5000 to Sarah's brother's children and the residue to Nan. d. All to Nan. Answer: c. Under 6122, the dissolution of marriage revokes the gift to a former spouse. That spouse is treated as having predeceased the testator except that a former spouse is not treated as kindred under 6147 so the issue of the former spouse do not take. The kindred of a former spouse are, however, treated as kindred of the testator for the purpose of 6147 so that the issue of Sarah's brother, John, do take. The remainder goes to Nan. 28. Ellen executed a will providing that her estate should be distributed one-fourth to Adam Jones, one-fourth to Ron Smith and Melissa Smith, and one-half to Jane Jones. Adam Jones is the son of Ellen's brother, Ron Smith and Melissa Smith are the son and daughter of Ellen's predeceased sister, and Jane Jones is Ellen's sister. Ellen was survived by her mother, by Ron and Melissa Smith and by Jane Jones. Adam Jones predeceased Ellen and was survived only by his father. How should Ellen's estate be distributed? a. One-fourth to Adam Jones's father; one-fourth to Ron and Melissa Smith; and one-half to Jane Jones. b. One-third to Ron and Melissa Smith and two-thirds to Jane Jones. c. One-fourth to Ellen's mother, one-fourth to Ron and Melissa Smith; and one-half to Jane Jones. d. All to Ellen's mother. Answer: b. The one-fourth given to Adam Jones lapses since he predeceased the testator. Under 6147, the gift is not saved since Adam was not survived by issue. Under 6148(b), Adam's share is divided to Ron and Melissa Smith and Jane Jones in proportion to their other interest in the residue. Thus, Ron and Melissa take one-third of the residue and Jane Jones takes two-thirds. Page 9 of 20 Sample MC Part 2 Examination: Wills & Trusts Sample Professor Wendel Total No. of Questions: 29 (See Part 1 for Questions 1-28) Time: Sample Questions Sample Exam Questions Part 2 Multiple-Choice Exam Questions 29 through 57 IN ALL OF THE FOLLOWING QUESTIONS, YOU MAY ASSUME THE CALIFORNIA PROBATE CODE TO BE IN EFFECT. 29. Sandy's estate consists of common stock having a value of $50,000 and cash totalling $10,000. Sandy made the following bequests in her will: 1. I bequeath all of my common stock to Bill; 2. I bequeath the sum of $10,000 to Tom; 3. I bequeath the sum of $15,000 to Lynn; 4. All the rest, residue and remainder of my estate, I bequeath to Laura. Assuming that all of Sandy's debts have been paid and that none of the legatees are related to Sandy, how should Sandy's estate be distributed? a. The common stock to Bill and $10,000 to Tom. b. The common stock to Bill, $4000 to Tom and $6000 to Lynn. c. $40,000 to Bill, $8000 to Tom and $12000 to Lynn. d. The common stock to Bill, $2000 to Tom, $3000 to Lynn and the remaining $5000 to Laura. Answer: b. This is a problem of abatement. The gift of common stock is a specific bequest since the common stock can be identified as against all other assets of the estate (CPC 6154(a)). The bequest of money is a general bequest or legacy (CPC 6143(b)). The gift to Laura is a residuary bequest (6154(f)). Under CPC 21402, the residuary gift abates first. The general bequests abate second and, under CPC 21403, they abate pro rata. Thus the $10,000 is divided 40% or $4000 to Tom and 60% or $6000 to Lynn. The specific devise abates last. It is not necessary to do that here. 30. Jack, a widower, had three sons, all of whom predeceased him. His eldest son, Arthur, left one child, Sara. His middle son, Bob, left two children, Tim and Tom. His youngest son, Harry, died only a month before Jack and, at the time of Harry's death, Harry's wife was pregnant. Five months after Jack's death, Harry's wife gave birth to a daughter, Laura. If Jack died without a valid will, to whom should the estate be distributed? a. One-half to Sara and the other one-half to Tim and Tom, equally. b. One-third to Sara, one-third to Tim and Tom, equally, and one-third to Laura. c. One-third each to Sara, Tim and Tom. d. One-fourth each to Sara, Tim, Tom and Laura. Answer: d. All issue are related in the second degree and take equally under 6402(a). Laura takes as a posthumous heir of Jack since she was conceived prior to his death and born within 300 days thereafter. CPC 6407. 31. In 1982, John executed a valid last will and testament leaving his entire estate to Will. In 1983, John wrote "Canceled" on the face of the 1982 will and executed another will leaving everything to Jim. In 1985, after a serious disagreement with Jim, John tore up the 1983 will. John was survived by Will and Jim, neither of whom are related to John, and by John's parents. How should John's estate be distributed? a. To Will since the 1982 will was revived. b. To Jim since the 1983 will was conditionally revoked. c. To Will since the 1982 will was never revoked. d. To John's parents, equally. Answer: d. When John wrote "Canceled" on the face of the 1982 will, that was an informal act of revocation. When John tore up the 1983 will, that was also an informal act of revocation. There is no evidence of intent to revive the 1982 will by contemporaneous or subsequent statements. There is no indication that the 1983 will was revoked with any condition attached. John thus died intestate and his estate is inherited equally by his parents. 32. John died leaving a will which contained the following residuary clause: "I give, devise and bequeath the rest, residue and remainder of my estate to Sam Jones, Trustee, to be used for the purposes which I have previously revealed to him." Sam Jones has acknowledged that the property is held by him in trust and that he has no beneficial interest therein. He has revealed to the Court that John told him to invest the property, pay the income to John's girlfriend, Amy, for her life and pay the corpus, at Amy's death, to her daughter. John's brother, Ed, has asked that the residuary be distributed to him as intestate property in that he is John's only living heir. How should the court distribute the property? a. There is a valid trust. The court should order distribution to Sam Jones, Trustee, to be distributed as John directed Sam. b. There is a valid trust. The court should order distribution to Sam Jones, Trustee, to be held for the benefit of John's brother, Ed. Page 10 of 20 c. There is a resulting trust for John's estate. The court should order distribution to Ed. d. The gift in the residuary lapses. Since Sam Jones is not kindred of John, the gift passes by intestate succession to Ed. Answer: a. This is an example of a semi-secret trust. At common law, parol evidence could not be introduced to show the intended purpose of the trust and the res would be held on resulting trust for the grantor. In California, however, parol evidence is admissible to show the purpose of the trust. Given that the Trustee claims no personal interest, the most likely result is that the trust will be valid for the purposes stated. 33. In 1984, the residuary clause of Alice's father's will gave her a general testamentary power of appointment over the residuary of his estate. In 1986, Alice died leaving a will which specifically exercised the power by appointing the property to "my children." Alice had three children, Bob, Ted and Sylvia. Bob and Sylvia survived Alice but Ted predeceased Alice leaving a will in which he disposed of "all my estate to my wife, Sue." Ted was survived by his wife, Sue, and his daughter, Lisa. To whom should the property be distributed? a. To Bob, Sylvia and Sue, equally. b. To Bob, Sylvia and Lisa, equally. c. To Bob, Sylvia, Sue and Lisa, equally. d. To Bob and Sylvia, equally. Answer: b. Under CPC 673, when an appointee predeceases the donee, but the appointee leaves issue, the issue take provided they are also permissible appointees. In this case Ted died survived by issue, Lisa. Lisa was a permissible appointee since the power was a general power. 34. Suppose that, in Question 33 above, Alice had not specifically mentioned the power of appointment but left a will leaving "all of my property to my children, equally." How should the property subject to the power be distributed assuming that Alice was her father's only heir and that she was survived by Bob, Sylvia, Sue and Lisa? a. To Bob, Sylvia and Sue, equally. b. To Bob, Sylvia and Lisa, equally. c. To Bob, Sylvia, Sue and Lisa, equally. d. To Bob and Sylvia, equally. Answer: b. Under CPC 641, the residuary clause of a will does not exercise a power of appointment. There must be some manifestation of intent. The clause here is the equivalent of a residuary clause since it disposes of the entire estate. The power thus lapses. It thus goes back to Alice's father's estate. It will be distributed by intestate succession to Alice's father's heirs. Those heirs will be determined in this case as of the date of lapse of the power. On that date, Bob and Sylvia were alive and Lisa was the issue of Ted who survived. 35. T's will makes the following gift: "I leave the sum of $100,000 to be held by my executors for 25 years after the date of my death, and then to be distributed to my heirs then surviving. The term 'heirs' shall mean those persons entitled to succeed to my estate according to the laws of descent and distribution in effect at the date of my death." At T's death, the above gift is: a. vested. b. contingent but valid. c. contingent and invalid. d. none of the above. Answer: b. Under the Rule Against Perpetuities, all takers are identified at T's death since the term "heirs" was defined as those persons who take by intestacy at T's death. However the gift is contingent since survival for 25 years is required. The gift must vest, if at all, within the lifetime of the takers identified at T's death. 36. John, the trustee of a revocable trust created by him for his children, decided to sell 100 shares of Texaco stock held by the trust in order to secure cash needed to support the beneficiaries. He looked in the Wall Street Journal and found that the price of Texaco was $43 per share. He then wrote out a personal check for $4300 payable to himself as Trustee, deposited it in the trust account and transferred the shares to himself. Under these circumstances: a. John has breached the duty of loyalty but the beneficiaries have no claim since market value was paid. b. The beneficiaries may move to set aside the transaction and to recover the stock. c. The beneficiaries may set aside the transaction and recover the stock unless John can prove that the transaction was fair. d. The beneficiaries have no claim for breach of the duty of loyalty since John may revoke if they assert a claim. Answer: b. Where the duty of loyalty is breached, the beneficiaries may sue to set aside the transaction without regard to whether it is fair. While John may revoke, that does not alter the rights of the beneficiaries until he does revoke. 37. Leonard died in 1987, leaving a will which contained the following residuary clause: "I give, devise and bequeath all the rest, residue and remainder of my estate to Bank of America, Trustee, the income from the trust to be paid to my children and the survivor of them, during their lives and, at the death of the last child of mine, to pay the income therefrom to my grandchildren then living until my youngest grandchild shall reach the age of 21 years. When my youngest grandchild shall reach the age of 21 years, all principal and any undistributed income shall be paid to my grandchildren or the survivor of them then living, equally." Page 11 of 20 Assuming that Leonard's children or grandchildren contest the validity of the foregoing gift, how should the court rule? [Use the common law]. a. All gifts are valid. b. The life estate of the children is vested; the income interest of the grandchildren is valid; and the remainder gift to the grandchildren is void. c. The life estate of the children is vested; the income interest of the grandchildren is void; and the remainder gift to the grandchildren is void. d. All gifts are void. Answer: a. The gift to the children is vested since, at Leonard's death, all of his children are born. The class is closed and all income interests are possessory. The income gift to the grandchildren is contingent since survival to the time of possession is required. However, the class will close and all income interests will vest at the death of the last of Leonard's children to die. The remainder will vest in all grandchildren surviving 21 years after the death of the last of Leonard's children to die. Since they must all be in being at Leonard's death, the gift is valid. Note: Under the Uniform Rule Against Perpetuities, the result would be the same since the gifts can be validated at Leonard's death. 38. T's will made the following bequest: "I give, devise and bequeath the sum of $100,000 to my daughter, Joan, to use the income therefrom for life. I give my daughter, Joan, a power of appointment exercisable by will over the remainder of said $100,000. In the event my daughter, Joan, shall fail to exercise the power of appointment, I give, devise and bequeath the said remainder unto my grandchildren, share and share alike. T was survived by his daughter, Joan, and by her two children. Joan made an agreement with her two children to release her power in exchange for a cash payment to her of $50,000. Which of the following is true? a. The agreement is valid because Joan had the power to contract to appoint to anyone except herself. b. The agreement is invalid as a fraud upon the power. c. The agreement is invalid since it was a special power of appointment. d. The agreement is valid since Joan may contract to release the power. Answer: d. The power given to Joan was a general testamentary power. Although Joan could not contract to exercise the power since it was not presently exercisable, she could contract to release the power, either with or without consideration. Questions 39 through 41 are based upon the following facts: Trustor created a valid inter vivos trust which contained the following provisions: (1) I direct that the income from this trust shall be paid to me during my natural life; (2) At my death, the income shall be divided annually and paid as follows: (a) One-third shall be paid to my oldest child if he reaches the age of 21; if he dies before reaching age 21, his share shall be divided among those persons hereafter designated as beneficiaries of (b) and (c); (b) One-third shall be paid to the children of my sister, Amy, who reach age 21; if any child shall die before reaching age 21, such child's share of income shall be distributed to the remaining children of my sister, Amy. If all of the children of my sister, Amy, shall die before reaching age 21, the income share of the children shall be divided among those persons herein designated as beneficiaries of (a) and (c) below; (c) One-third shall be paid to my grandson, Robert, if he reaches age 21. 39. Assuming that Trustor is deceased but left his only son, Edward, alive, the Trustee should: a. Accumulate the income on Edward's share until Edward reaches age 21 and then pay the accumulated income to Edward. b. Begin paying the income to Edward now but stop paying the income to Edward if he dies before reaching 21. c. Begin paying the income to Edward now and continue paying the income to his estate if he dies before reaching age 21. d. none of the above. Answer: b. Under Edwards v. Hammond, where an age contingency is stated both as a condition precedent and condition subsequent, the condition precedent is ignored. The gift is thus vested and Edward is entitled to the income now. If he dies before 21, the condition subsequent terminates his interest. 40. Assuming that Trustor is deceased and that his sister, Amy, is deceased and that she is survived by three children, none of whom is yet age 21, the Trustee should: a. begin paying the income to the three children immediately, but stop paying the income to any child who dies before reaching age 21. b. accumulate the income until the first child reaches 21 and then begin distributing it annually to all children of Amy who have reached age 21. At the death of any child after reaching age 21, pay the income to the remaining children who are over 21. c. begin paying the income to the three children immediately and continue paying the income to the estate of any child who dies before reaching age 21. d. none of the above. Page 12 of 20 Answer: b. Under the rule in Festing v. Allen, where an age contingency is stated both as a condition precedent and condition subsequent, but where the taker is not identified, the condition precedent is given effect. The gift is contingent upon survival to age 21. 41. Assuming that the Trustor is deceased and that he has a grandson, Robert, who is age 20, the Trustee should: a. begin paying the income to Robert immediately but discontinue paying the income if Robert dies before reaching age 21. b. begin paying the income to Robert immediately and continue paying the income to Robert's estate if he dies before reaching age 21. c. accumulate the income until Robert reaches age 21 and then pay the accumulated income and future income to Robert when he reaches age 21. d. none of the above. Answer: c. This is simply a contingent interest. Robert must reach age 21 in order to take since the condition is stated only as a condition precedent. 42. Testator's will contains the following residuary clause: "I give, devise and bequeath all of the rest, residue and remainder of my estate to my brothers, John Smith and Ralph Smith, share and share alike." John Smith predeceased the Testator. John was survived by his brother, Ralph Smith, who was the other residuary legatee, and by a sister, Rose Smith. The executor of the estate should distribute the residuary as follows: a. All to Ralph Smith. b. Three-fourths to Ralph Smith and one-fourth to Rose Smith. c. One-half to Ralph Smith and one-half to Rose Smith. d. All to Rose Smith. Answer: a. Where a residuary bequest fails because of lapse and is not saved by anti-lapse, the other residuary legatee takes in proportion to his interest in the remainder of the residuary. Since Ralph took all of the remainder of the residuary, he takes John's interest. 43. John was born to his natural parents, the Smiths. His parents divorced when he was six months old and Mrs. Smith put John up for adoption. He was legally adopted by Mr. and Mrs. Williams. When John was 19, he began to search for his natural parents and finally located his mother, the former Mrs. Smith, in Los Angeles. John moved into her house and lived with her for three years until her death in 1986. He continued to maintain a close relationship with his adoptive parents although he no longer lived in their house. John's natural mother died intestate and was survived by John and by her two sisters. To whom should John's mother's estate be distributed? a. John because he lived with his mother prior to her death. b. The two sisters equally because John was no longer the child of his natural mother. c. One-half to John and the other one-half to the two sisters. d. John because the relationship of parent and child never ceased between John and his mother. Answer: b. When John was adopted by the Williams, he became their child. That severed the relationship between John and his mother unless two conditions are satisfied. The first is that he lived with his mother at any time as parent and child. That provision is satisfied since John lived with his mother during infancy and he lived with her for the three years prior to her death. The second condition is that he was adopted by the spouse of either of his natural parents or that the adoption was after the death of either of the natural parents. That condition is not satisfied from the stated facts. Thus John cannot inherit and the estate passes to the sisters. CPC 6408 and 6402. 44. T's will made the following bequest: "I give, devise and bequeath $100,000 to First Bank, Trustee, the income therefrom to be paid to A for life and, at A's death, the principal is to be distributed to A's children when they reach 21." At T's death, A had three children, C-1, C-2 and C-3. Prior to A's death, another child, C-4, was born. C-2 predeceased A leaving a will which disposed of his estate to his wife. At A's death, C-1, C-3 and C-4 are all over the age of 21. First Bank should distribute the principal as follows: a. To C-1, C-3 and C-4 in equal shares. b. To C-1 and C-3 in equal shares. c. To C-1, C-2's wife, and C-3 in equal shares. d. To C-1, C-2's wife, C-3 and C-4 in equal shares. Answer: a. Under CPC 6150(b), a devise of a future interest to a class vests in those persons answering the class description when the gift becomes possessory. That would be C-1, C-3 and C-4. C-2's interest did not vest since C-2 did not survive to the time of possession. Questions 45 and 46 are based upon the following facts: In 1983, T executed his will which makes the following bequest: "I give, devise and bequeath all of my estate in trust to First National Bank, Trustee, to pay the income to my brothers during their natural lives and, at the death of the last of my brothers to die, to distribute the remainder to my sisters or their issue then surviving." Page 13 of 20 T was survived by two brothers who were the life tenants. T was survived by two sisters, A and B. A predeceased the life tenants leaving no issue but leaving a will which bequeathed her entire estate to charity. B survived the life tenants. B was one of two witnesses to T's will. The Trustee has petitioned the court for instructions as to distribution of the remainder at the close of the life estates. 45. The court should take the following action in regard to the remainder gift to A: a. A's remainder interest should be paid to A's estate for distribution to the charity designated in her will. b. A's remainder interest should be paid to T's estate as beneficiary of a resulting trust. c. A's remainder interest should be paid to B if B proves that B did not procure the bequest by duress, fraud, menace or undue influence. d. The court should apply the doctrine of lapse to A's remainder interest. Answer: c. The gift to the sisters was contingent upon their survival at the time of possession. A failed to survive and was not survived by issue. A's gift thus lapses. Under CPC 6148, where a residuary devise fails for any reason, the gift passes to the remaining residuary legatees in proportion to their interests in the remainder of the residuary estate. 46. The court should take the following action in regard to the remainder gift to B: a. The court should order the Trustee to distribute the remainder interest to B since there is no legal impediment. b. The court should order the Trustee to distribute the remainder interest to B unless T's heirs prove that B procured the bequest by duress, menace, fraud or undue influence. c. The court should order the Trustee to distribute the remainder interest to B if B proves that B did not procure the bequest by duress, menace, fraud or undue influence. d. The bequest to B is invalid. Answer: c. Under CPC 6112, a gift in a will to a witness raises a presumption that the gift was procured by fraud, duress, menace or undue influence. The burden is upon B to prove the contrary. If B discharges the burden, B is entitled to receive the remainder gift. Questions 47 and 48 are based upon the following facts: Ed Jones wrote a holographic will which reads as follows: "I leave all of my estate to my sister and her children. I name my sister executor." The will was not dated or signed. At the time the purported will was written Ed had one sister, Mary Jones, who was unmarried and childless. About a year later, Mary married and one year after the marriage, she gave birth to a child, Jessica. Shortly after Jessica's birth, Ed wrote the following on the bottom of the page which contained the above purported will: "July 14, 1985. I am deeply touched by the birth of my niece, Jessica. I want Jessica to have the diamond ring which my mother left me." The second writing was signed at the end. One month later, Ed died. 47. Assuming that both writings are offered for probate, the most likely basis for admitting them to probate is: a. integration. b. republication by codicil. c. incorporation by reference. d. facts of independent significance. Answer: a. Republication by codicil will not work since the original writing was not validly published. Incorporation by reference will not work since there is no stated intent to incorporate and no description of any instrument to incorporate. Facts of independent significance will not work because the writing purports only to be a testamentary instrument. Integration might work since the document is in the handwriting of the testator, is on a single sheet of paper and is signed. 48. Assuming that both writings are, in fact, admitted to probate, the court will, after distributing the ring to Jessica, distribute the rest of the estate to: a. Mary, in fee simple. b. Mary for life, remainder to Jessica. c. Mary for life, remainder to Mary's children who survive Mary. d. Mary and Jessica as tenants in common. Answer: c. Where there is a gift to A and her children, under the preferred construction in Rule in Wild's case, Mary takes a life estate and the children take a remainder which is contingent upon survival since it is a class gift. 49. Bob was divorced and had three children by his marriage. In 1982, he met Barbara and they spent a month in Hawaii. They returned to California and began living together. Several months later, Barbara discovered that she was pregnant and gave birth to Tammy in 1983. Bob and Barbara continued to live together but never married or attempted to marry. Bob repeatedly referred to Tammy as his daughter until he and Barbara separated in January, 1985, Thereafter, he denied that he was Tammy's father and did not support her. Bob died on December 1, 1987, and was survived by Tammy, by the children from the prior marriage and by his father. If Bob died without a valid will, to whom should his estate be distributed? Page 14 of 20 a. To his three children from the prior marriage in equal shares. b. To his three children from the prior marriage and Tammy in equal shares. c. One half to his three children from the prior marriage and one-half to his father. d. Two-thirds to his four children (including Tammy) and one-third to his father. Answer: b. Under Civil Code §7004(a)(4), there is a presumption that Bob is Tammy's natural father if he receives Tammy into his home and openly holds her out as his natural child. Since Bob did this from Tammy's birth in 1983 until he and Barbara separated in 1985, the presumption should arise. Questions 50 and 51 are based upon the following facts: When T died in 1984, his will contained a testamentary trust. Two provisions of the trust are as follows: (1) I direct that one-half of the corpus of this trust and all income therefrom shall be held by my Trustees until the oldest child of my brother, Sam, shall reach the age of 25, at which time it shall be distributed to all of my nieces and nephews then surviving. (2) I direct that the other one-half of the corpus of this trust and all income therefrom shall be held by my Trustee until the eldest grandchild of mine who survives me shall reach the age of 40 at which time it shall be paid to such grandchild. 50. Assuming that the common law Rule Against Perpetuities is in effect, the gift to the nieces and nephews: a. is valid if T's brother, Sam, has a child living at T's death. b. is valid whether or not T's brother, Sam has a child living at T's death. c. is void. d. is void unless T's brother, Sam, has a child who is already 25 at T's death. Answer: a. If Sam has a child living at T's death, that child will reach 25 or not reach 25 within the child's own lifetime. That would validate the gift. Answer b. is incorrect in that if Sam has no child living at T's death, an afterborn child might be under the age of 4 when Sam dies and reach 25 more than 21 years after Sam's death. 51. Assuming that the common law Rule Against Perpetuities is in effect, the gift to the grandchild: a. is valid only if all of T's children predeceased T and T has a grandchild surviving him. b. is contingent, but valid, if T is survived by a grandchild. c. is vested if T is survived by a grandchild. d. is contingent and void. Answer: c. The gift is vested since the taker is identified as of T's death and the condition of reaching 40 only relates to possession. 52. T died domiciled in California. His will contains the following provision: "I leave the sum of $100,000 to the Bank of America, Trustee, to be held in trust for the benefit of my son, John, for life, and at his death to be held by the Trustee to be distributed to my son's children who reach age 25." Under California law, the best of the following answers is: a. the gift to John is vested but the gift to John's children will be declared void. b. The gift to John is vested but the court will wait until John's death to determine whether all of his children are over the age of 4 years. If so, the court will declare the gift valid; otherwise, it will declare the gift void. c. both the gift to John and the gift to John's children will be declared void under the doctrine of "infectious invalidity." d. the gift to John's children may be reformed by the court to reduce the age of 25 to 21 if that seems consistent with T's general intent. Answer: d. The gift as made violates the Rule Against Perpetuities. At John's death, he may have a child under age 4. Although the class will close at John's death, all interests in the class will not necessarily vest within the period of the rule. However, using the cy pres power, the court may reform the gift to validate the gift if that seems consistent with T's general intent. 53. T purchased 200 shares of Sales Corp. in 1975. In 1978, the stock split so that T thereafter owned 600 shares. On March 1, 1986, Sales Corp. announced that it would pay a 10% stock dividend to all shareholders of record on May 1, 1986. T died on May 15, 1986, and the stock dividend of 60 shares was received by his executor on June 10, 1986. T's will, executed in 1976, makes a bequest of "my Sales Corp. stock" to his sister and the rest, residue and remainder of his estate to his brother. The executor of T's estate should: a. distribute 200 shares of Sales Corp. stock to T's sister and the remainder of the stock to T's brother. b. distribute 600 shares of Sales Corp. stock to T's sister and the remainder of the stock to T's brother. c. distribute 660 shares of Sales Corp. stock to T's sister. d. distribute the entire estate to T's brother. Answer: c. The gift is a specific bequest since the stock can be identified as against all other assets of the estate. It is clear that all of the Sales Corp. stock was bequeathed. Under CPC 6171, the specific devisee gets all shares which are part of the estate at T's death plus any additional shares by reason of action initiated by the entity. Thus, all the shares, including the stock split and the stock dividend pass to T's sister. Page 15 of 20 54. H's will, admitted to probate in 1982, provides as follows: "I give, devise and bequeath the sum of $100,000, in trust, to First National Bank, Trustee, to pay the income to W for life and then to pay the corpus to such of her children as W may, by inter vivos or testamentary instrument, appoint. In default of appointment, Trustee shall pay the corpus to W's children equally." During her lifetime, W delivered a letter to the Trustee which read as follows: "From and after the date of my death, I direct that the property over which I hold a power of appointment shall be held by you in trust until 21 years after the date of my death at which time you shall distribute the corpus and all accrued income to my oldest child then surviving." At W's death, the Trustee should: a. continue to hold the corpus in trust for 21 years and then distribute the income and corpus to W's oldest child then surviving. b. pay the corpus at W's death to W's oldest child who survives W. c. pay the corpus at W's death to W's children in equal shares. d. pay the corpus to W's estate. Answer: a. W has a special power of appointment which is presently exercisable. A power may be exercised by creating a trust for the appointee. Since W is a life in being, the exercise is valid. It will vest in her oldest child surviving 21 years after her death. That is within the permissible period of the Rule Against Perpetuities. 55. T's will contained the following bequest: "I leave $10,000 to the children of my son, John." At T's death, he was survived by his son, John, and by John's two children, Bill and Sam. Two years after T's death, another son, Tom, was born to John. Due to some complications in selling assets of T's estate, the executor could not distribute the estate until three years after T's death. The above gift should be distributed to: a. Bill and Sam, in equal shares. b. Bill, Sam and Tom, in equal shares. c. It should be held until John's death and distributed to all of John's children who survive him. d. It should be held until John's death and distributed to all of John's children who survive him and the estate of any child who predeceases him. Answer: a. Since this is a class gift, the class closes when the gift becomes possessory. That is at T's death even though the actual possession may be delayed by administration of the estate. 56. Testator died in 1972, survived only by his granddaughter, Lisa, and by two brothers and one sister. He left a valid will which provides as follows: "All of the rest, residue and remainder of my estate shall be held in trust by my executor, the income therefrom to be paid to my granddaughter during her natural life, and at her death the principal to be paid to my heirs." Lisa died in 1986, survived only by her two daughters to whom she bequeathed her entire estate. The trustee should distribute the principal of the trust to: a. Testator's brothers and sisters who are alive at the death of Lisa. b. Lisa's children, share and share alike. c. Testator's brothers and sisters who were alive at the death of Testator. d. Testator's brothers and sisters who are alive at the death of Lisa and the estate of those brothers and sisters who survived Testator but predeceased Lisa. Answer: b. Where there is a gift of a future interest to the "heirs" of the testator, the heirs will be determined at the time the gift becomes possessory. In this case, that is at the death of Lisa. At her death, Testator's issue take in preference to collateral heirs. 57. At Bob's death, his will created a testamentary trust which provided that the income would be paid to his sister, June, until she died at which time the principal would be distributed to her heirs. It also provided that if June married, the income interest would terminate with the income being accumulated until June died at which time the principal would be distributed to her heirs. About two years after Bob's death, June married Ralph who had an adult daughter from a previous marriage. June adopted Ralph's daughter pursuant to the California statute. June recently died intestate survived by Ralph, by her adopted daughter, and by a niece. The trustee should distribute the principal as follows: a. one-half to Ralph and one-half to the adopted daughter. b. one-third to Ralph and two-thirds to the adopted daughter. c. one-half to Ralph and one-half to June's niece. d. all to June's niece. Answer: a. The remainder gift was to June's heirs. When there is a future interest given to the "heirs" of a person, heirs are determined when the interest becomes possessory. Here, that was June's death. June was survived by a spouse and by one child. The adopted daughter inherits even though she was adopted as an adult. Since there was only one child, Ralph gets one-half of the estate and the adopted daughter gets the remainder. Page 16 of 20 Final Examination: Wills & Trusts Spring 1992 Professor Wendel Total No. of Questions: 2 Time: 2 Hours QUESTION I Tim is married to Wilma and they have two children: Andy and Bertha. In 1960, Tim executed a will which provided in pertinent part as follows: 5. 6. 7. 8. 9. "I hereby give my car to my fellow employee, Chris." "I hereby give my 500 shares of General Motors stock to my nephew, Ned." "I hereby give my wife Wilma $500,000 (I have already given her plenty of gifts during our marriage so she is well taken care of)." "I hereby give all the rest of my personal property to my best friend, Fred." "I hereby give the rest, residue, and remainder of my property to my children, 1/3rd to Andy and 2/3rds to Bertha." Tim took the will home and kept it with his personal papers. In 1990, Tim discovered he had terminal cancer. In reviewing his estate plan, he decided that he wasn't being fair to Andy, and so he executed a second instrument which provided in pertinent part as follows: "I hereby revoke paragraph 9 of my last will and testament and replace it with the following provision:" 9. "I hereby give the rest, residue and remainder of my property to iny children, equally." Tim took the second instrument home and kept it with his personal papers. Although Tim battled long and hard, he finally succumbed to cancer in 1992. As soon as Andy heard the bad news, he caught the first plane he could get to be with his mother, Wilma. The plane crashed, however, and all the passengers were killed instantly. Andy is survived by his wife, Winnie, and their children, Paul and James. When Wilma searched Tim's personal papers at home, all she could find was: (1) his 1960 will, (2) a letter to Fred, a beneficiary in the will, which thanked Fred again for helping Tim in this matter and directed Fred, pursuant to their prior agreement, to give all of Tim's antiques to UCLA and all of his stocks to USC; and (3) a canceled check for $1,003,000 which Tim had contributed to UCLA just before he died (which surprised he rbecause Tim was a stingy fellow who had never before given anything to anybody outside of his family). It turns out that: (1) Tim worked with two individuals named Chris; (2) after Tim executed the 1960 will, General Motors declared a two for one stock split so there are 1000 shares in his estate at the time of his death; and (3) Wilma is in financial trouble. Despite the recitation in the will, Tim had given her only $1,000,000 during their relationship, which is not enough to support her in the lifestyle to which she has grown accustom. Accordingly, her daughter Bertha has disclaimed her interest in her father's estate (although Bertha's five children may not be happy with this). Wilma has come to us for advice. Please set forth and evaluate the issues involved in how Tim's net probate estate (which is roughly $4,000,000) will be distributed. You may assume that both instruments were prbperly witnessed and executed. Assume the jurisdiction applies the UNIFORM PROBATE CODE. (AFTER you have completed your ENTIRE analysis of the problem under the Uniform Probate Code, you may BRIEFLY note any MAJOR differences which may apply if we were in a common law jurisdiction). Page 17 of 20 QUESTION II In 1982, Tom married Wendy. They had two children, Anthony and Betty1 and Wendy had a third child, Carl, from a previous marriage. (Tom has looked into adopting Carl, but Wendy's ex-husband has objected every time so Tom as dropped it). In 1990, Tom called his attorney, Alice, and asked her to prepare a will and trust for his execution. She did so, and sent the drafts of the will and trust to Tom for his review. But before Tom could get to her office to execute the documents, his national guard unit was sent to the Middle East for Desert Storm. Concerned that the worst could occur, before leaving for the Middle East, Tom took out the draft of his will and copied it verbatim by hand and signed it at the end. The document provided in pertinent part: 1. 2. 3. 4. I give to my son, Anthony, my car. I give to my daughter, Betty, $15,000. I give my wife, Wendy, $50,000. All the rest, residue, and remainder of my estate, of whatever nature and wheresoever situated, I give to Terry, trustee of my inter vivos trust, to hold and distribute pursuant to the terms of said trust. Tom returned home safely from Desert Storm, and was concerned that his 'home-made' will might cause problems. So he made arrangements to see Alice to execute the formal documents she had prepared. The pertinent will provisions were the same as set forth above, except physically after the signature line, but temporally before he signed the document, Tom added the following: "I give my step-son, Carl, $5,000." Tom then signed the will, and it was properly witnessed by two of Alice's paralegals. Tom also executed the trust, the provisions of which were identical to the original draft, and immediately funded it with $10,000. The trust provided in pertinent part as follows: "The trustee is to distribute the income annually to my wife, Wendy, and upon her death, the principal is to be distributed equally among my children then living." Thereafter, Tom's relationship with Wendy deteriorated to the point that they were divorced in 1992. Tom was bitter about the fact that his children, Anthony and Betty, had sided with Wendy, so he wrote each of them a letter and included a check to each for $10,000. The letters said that this money was all they should ever expect to receive from him, and that this money was in lieu of what he had intended on leaving them in his will. Tom also drew a line through his gift in his will to Carl, but he made no other changes to his estate planning documents. Shortly thereafter, Tom died. Assume that the jurisdiction applies the Uniform TestamentaryAdditions to Trusts Act and the following statute: "To be a valid will, the instrument must: 1. 2. be in writing and subscribed by the testator himself or by some person, by his direction, in his presence, and attested by two or more competent witnesses subscribing their names to the will in the presence of the testator; or be in the testator's handwriting and subscribed by the testator, whether witnessed or not. Please set forth and analyze the issues raised by the facts. In analyzing the issues, please note the different rules which may apply to each issue. Page 18 of 20 Final Examination: Wills & Trusts Spring 1993 Professor Wendel Total No. of Questions: 2 Time: 2 Hours QUESTION I Tess had her attorney prepare a draft of an inter vivos trust. The draft directed the trustee "to pay the income to Tess during her lifetime, then to her sister Alice during her lifetime, then to distribute the principle to such persons as Alice may appoint by will; and in default of appointment, to USC." Tess' attorney sent the draft to Tess dor her review. Thereafter Tess became very ill. Fearing that she right not live long, Tess got out the draft of her trust and handwrcte an undated "Will" the residuary clause of which provided in pertinent part as follows: "I give all the rest, residue and remainder of my estate to the trustee of my inter vivos trust attached hereto." Tess then signed the handwritten document and paperclipped the unexecuted inter vivos trust to the handwritten document. Subsequently Tess recovered, and she had her estate planning documents redone by her attorney. Her attorney typed up an exact copy of the handwritten document, and re-printed the inter vivos trust, wlth only one change. Tess directed that in the event Alice did not appoint the appointive property, it was to go to Pepperdine instead of USC. Tess executed the typed up will, which was properly witnessed, and signed the revised inter vivos trust. She funded the trust with $2,000,000, the bulk of her estate. Thereafter Tess decided USC deserved something too. Tess called Alice and told Alice that she (Tess) had destroyed the second will intending to give effect to the old handwritten trust with its attached inter vivos trust. Thereafter Tess became pregnant without the benefit of marriage. She died during child birth, with a probate estate worth $100,000. She is survived by the child and her sister Alice. Following Tess' death, Alice executed a document which provided that she "gave up the power referenced in Tess' will to the extent she could exercise it in favor of anyone other than her children." Thereafter Alice executed a valid will which made no express reference to the power referenced in Tess' will, but which devised the "rest, residue and remainder of my estate to my daughter, Daisy.« Alice died 10 years later, with a probate estate of $600,000. Alice is survived by Daisy. Analyze the issues raised by the disposition of Tess' property and Alice's property. Be sure to discuss all relevant claims may be asserted by all parties. Assume that California jaw applies (but if there are other doctrines which a California court could adopt, feel free to argue them). In addition, assume that California has adopted the following provision which applies to the case: A general residuary clause in a will is deemed to exercise a general power of appointment, but not a special power of appointment. QUESTION II Andy and Carl are good friends, in fact Andy and Carl are brothers. Andy is married to Betty, and Carl is married to Deb. The two couples often socialize together. Last month on their way home from the movie, their car was involved in a tragic head on accident. Andy and Carl were in the front seat, and they were killed instantly. Betty and Deb were in the back seat. Betty sustained severe injuries and died 3 days later. Deb survived the initial accident. Andy and Betty had owned a home worth $200,000, which the probate court detenined they held as true joint tenants and not as community property. They had $100,000 in community property. Betty had a $100,000 antique car which she bought before they were married, and Andy had just recently inherited $100,000 from a distant relative. In addition, Andy had a funded inter vivos trust. The sole dispositive provision of the trust provided: "to Betty for life, then to her grandchildren and their heirs." Andy died intestate. Betty died testate. The sole dispositive provision of her will was the residuary clause, which gave all of her estate to her husband, Andy. Andy and Betty's only child, Nate, predeceased them, but they are survived by two grandchildren, Ed and Fran. Carl and Deb owned a home worth $500,000, which Carl's dad hat devised to Carl. They had $1,000,000 in stock which they had purchased out of Carl's earnings after marriage. Carl died testate. He gave "$600,000 to my brothers and sisters and their heirs who survive me, equally.« In addition to Andy, Carl has one other brother, Greg, who survived Carl and has seven children. Carl is also survived by Hana, the child of a sister who died before Carl was born. Greg disclaimed his interest in Carl's estate. The residuary clause of Carl's will gave the rest of his estate to his wife, Deb. Although Deb survived the accident1 she was emotionally devastated. She told people that she couldn't live without Carl. She began to see a psychic, Pat, who claimed she was able to communicate with her deceased husband. Deb's paretns were concerned about Deb, and even instituted proceedings to have her institutionalized. But the court determined she was competent. Shortly thereafter Pat took Deb to see a friend of Pat's, an attorney, who drafted a will which Deb executed. The will bequeathed $100,000 to Deb's parents, and the remainder of Deb's estate to "my good friend, Pat." The will also contained a "no contest" clause. The attorneym her paralegal, and Pat signed the will as the witnesses. Two years later, Deb committed suicide. Deb is survived by her parents, who have challenged the will. Discuss the likely disposition of the differeci estates (Andy's, Betty's, Carl's and Deb's respective property) under California law. (If there are other doctrines which a California court could adopt, feel free to include then in your analysis as well. Page 19 of 20 Final Examination: Wills & Trusts Spring 1994 Professor Wendel Total No. of Questions: 2 Time: 2 Hours QUESTION I Whilma and Harry were married. During the birth of their first child, Chris, Whilma died from complications. Her will stated that her estate was "to be distributed onethird to my friend, Fiala, one-third to the society for the discovery of 'Bigfoot' (the half man-half ape creature which purportedly roams the Northwest), and one-third to my husband." Two years later, Harry married Sally and they executed a joint will leaving everything to the surviving spouse for life, then to Chris. Sally wanted to adopt Chris, but she never got around to executing the adoption papers. Nevertheless, Harry and Sally bought a house together in true joint tenancy in which the three of them lived together. Fifteen years later, however, things weren't so rosy. First, Sally was having an affair with Andy. Then her father died, and Sally was worried about how her mom was going to get by financially. Without telling Harry, Sally executed a properly witnessed will and trust. The will gave "one-half of my estate to my husband, if he survives me, and the ther half to the trustee of my trust to hold and distribute pursuant to the terms of the trust." The trust stated that the trust was to be fore the support of her mother, and upon her mom's death the principal was to be distributed to Andy. Sally took both documents home with her and kept them among her papers. She never funded the trust. Three years later Harry died of a heart attack. Chris immediately rushed home from college expecting to find Sally in tears, only to have Sally tell him that he had two weeks to pack up his tings and move out for good. Chris was confused until his uncle Bob showed Chris a signed handwritten letter Harry had sent to Bob a couple of years earlier. In the letter, Harry wrote: "I think Sally is fooling around on me. I don't trust her. You and Tom should get my estate as brothers, not Sally." A week after the funeral, Sally and her new boy friend, Steve, took off for a getaway vacation. Tragically, their plane crashed and all on board were killed. Following her death, her will was found, but not the trust instrument. Besides the house, Harry had $600,000 in savings in his name alone from postmarital (to Sally) earnings, an inheritance of $200,000, and he had a pension plan which designated "my wife, Whilma" as the beneficiary. Sally had no property in her name alone and is survived only by her mother. Harry's brother Tom pre-deceased (survived by one child) and his brother Bob has four children. Bob feels sorry for Chris and has disclaimed his interest, if any, in Harry's estate. Andy is still alive too. Discuss all the possible claims that can be brought with respect to the disposition of Whilma's, Harry's and Sally's estates. QUESTION II Wendy and Hal are married and they have two children, Alice and Bill. With their maritalearnings they have purchased Greenacres, Blackacres, and a sailboat (the "Achilles"). In addition, Wendy inherited $2,000,000 in IBM stock from her mom. Wendy's father, Fred, executed and funded an inter vivos trust for the benefit of Wendy's children. The trust directed the trustee "to pay all of the income to my grandchildren Alice and Bill for their support and education." The trust gave Wendy a general testamentary power of appointment over the remainder. Bill has defaulted on his car payments and his creditors seek to reach his interest in the trust. Thereafter, Wendy executed a properly witnessed will which stated: 5. 6. 7. 8. 9. give 'the Achilles' to my niece Nancy. I give Greenacres to Alice. I give Blackacres to Bill. I give $1,000 to my friend, Gene. I give the rest, residue, and remainder of my estate, including any property over which I have a power of appointrnent, to the trustee of my trust to hold and distribute pursuant to its terms." Although Wendy has a male friend named "Gene," she intended provision 8 to be to her female friend "Jean." The attorney, however, dictated the instrument and the secretary typed the wrong spelling. Shortly after Wendy executed the will, she executed a trust which directed the trustee to pay the income to her husband, Hal, and "upon his death to distribute the principal to my issue, by representation." Two years later, Wendy was going to lunch with Alice and Bill when the car they were in was hit by a train and they were all killed instantly. Bill is survived by his spouse and three children. Alice is survived by her spouse and a stepchild she wanted to adopt but the natural parent would not consent to the adoption. As for Wendy, she is survived by Hal. Among Wendy's personal papers they found an undated, signed document in her handwriting entitled "My Last Will" which stated " Upon my death I want my niece Nora to have 'the Achilles' and I hereby give $50,000 to USC." There was a line drawn through the letters "USC" and handwritten above them were the letters "UCLA." Two months prior to the accident, Wendy had sold 'the Achilles.' She had received half of the purchase price from the purchaser and had used it as a downpayment on a powerboat ("the Knife.") Please discuss thoroughly all the different wills and trusts claims which can be asserted by the different parties. Page 20 of 20