Introduction Policy of Passing wealth at death 1) Intestacy-default rules provide unless parties provide otherwise a) Majoritaran-what most people would want b) Penalty default can’t completely disinherit your spouse 2) Wills-need witness, ceremony to show serious a) Will contests-lack capacityii Protect testator ii) Interpretation(ship Peerless)-leave homestead to wife(house and land) iii) Limitations on right to divide(as child can’t say I need property)-say incompetent 3) Trusts-agency costs-if give actions to agency-might have poor return a) T’s removal is really hardbb Dead hand problem-people care about how long T and E lasts 4) Shapira v Union National Bank a) Facts: left in equal shares to his children-Ruth is married-Daniel msut marry jewish girl w/both parents are jewish(had 7 years at death)-Maybe has non-jew GF or religious b) Dad gets to decide what happens to his property when he diesii Moral intuition-reward people who take care, encourage saving b/c pass at death but don’t want privileged class so estate tax-give effect to transferor’s intent (1) But not all-want to burn artwork c) So Daniel Shapira said-violates right to marry w/14th Amend and violates PP d) 14th Amendment-have right t to marry-this impinges on it i) Shelly v Kraemer-state action-courts to enjoin African American to take title to property-violates Equal Protection==but not the same here (1) Not enjoining him from marrying e/o-just st won’t give him $ if marry non-Jew (2) So have no right to inherit e) Public policy-upholds b/c not total restraint i) If said I leave D provided he never marries-against PP b/c CL encourage marriage ii) Or leave if D divorces-unreasonable b/c family disruptioniiii Reasonable conditions (1) Temporal component-reasonable time-7 years he’s 28 (2) Geographic component-lots of jews in NYC-(a) Court doesn’t say what would happen if going to Antartica or what if gay iv) Why reasonable here but not inter vivos-when alive can talk about it-if say can’t marry non-African American while alive that upholds but bothers us f) Dead Hand Destruction of property-reasonableness limitation-curtail right to dispose only to extent it violates certain existing rules(other than these-freedom to testation) i) Rest 3rd Trusts-invalidates trusts contrary to PP(restraints on marriage, religious freedom, disrupting family relationships, choice of carriers, but balance conflicting social values) Professional Responsibility 1) Duties to intended beneficiaries a) Simpson v Calivas i) Facts: Robert hires Calivas(lawyer to draft his will)-has wife Roberta and Robert Jr from prior marriage=will left all to JR except life estate of homestead-home on 100 acres-R thinks she is getting all 100 acres, Jr. thinks he’s getting all but houseiii PC: notwithstanding lawyer’s notes that R gets only house-no EE so she gets all so JR buys land for $400K and then sues lawyer for $400Kiiii Duties to intended beneficiaries to fall of the privity defense-(1) Donor is in privity w/laywer-can sues but won’t find out-malrpactice suit is asset of donor’s estate so executor can sue-son is intended beneficiary (2) Foreseeability—privity protects ppl from unanctipated liability but L knows b (3) Tort: Lawyer owes duty of care to foreseeable victim-K 3rd party beneficiary (a) Some only accept K or Tort but this accepts both (4) If error is defective on face, then obvious liability (RAP prevents son taking)-(a) Almost allow to intended beneficiary except NY (5) Now some cases as trustee say you have fidicuary duty to beneficiary 2) Conflicts of Interests a) A v B-W and H use same lawyer-H is having an affair and has child w/s/o else i) Facts: leave e/t survivor to kids-survivor leave it to children-(1) Sue husband-representing H in estate planning, W in general P in fam law (2) Under NJ can tell wife-what about confidentiality(standard form-tell W or H) ii) H brings suit to enjoin firm form disclosing confidential info—it’s not his! (1) Owe duties to clients, former clients-and confidentiality to all Intestate Succession-A. Statutes of Descent and Distribution-determines who your heris are 1. Introduction 1) People don’t have wills b/c don’t think about death, expensive, non-probate a) Partial intestacy-will doesn’t apply to e/t-bad idea-have residuary clause 2) Policy considerations-majoritarian, family protection, expressive function(develop norms) 3) If real estate in IL and property in NY-law of domicile goes w/property-real property location 4) In all lineal descendants take to the exclusion of parents and grandparents a) Only spouses and blood relations(adopted) inherit outside CA, in-laws and step do not b) Areas of differentiation-how much spuse takes-if deceased child leaves descendants 5) Determining heirs is important b/c who has standing to challenge will(only have standing if get to take w/o will b/c if defeat will then take)-descendants and forms of representationwhhat mandatory minimum if don’t leave to spouse 2. Share of the Surviving Spouse 1) If W died first, H acquired all the property-W was no more independent-Has has right to life estat to all property-If H had died first, W had 1/3 of dower-spouse’s share is better(>1/2) a) Even if children-want spouse to get all b/c spouse will support child(unless 2nd marriage) b) Most wills-leave all to spouse-good evidence of what ppl want but might be biased 2) UPC provision a) S, no D, no P-102(1)(i)-all to S b) S, no D, P 102(2) $200K + ¾ to S rest P(in half though parents get nada) c) S, D-102(1)(ii) all S only if all D are also S and S’s only kids(no need for guardianship) i) Traditional approach-give half to child and ½ to S ii) 102(3)-$150K and ½ S if D are also S’s but S has others-rest to D(spouse has others) iii) 102(4)-100K + ½ S if one or more D is not S’s-if D has another child (1) this is just what average person wants-should length of marriage be relevant? 3) Domestic Partners and Intestate Successionaa Registration scheme-if you register-then married-what if fail to register? b) Multi-factor approach-(common household?) but don’t want litigation in probate c) Combination of reg and multi-factor approach-maybe-but will can get you there a/w b. Simultaneous Death 1) Talk about it now b/c involves spouses and b/c will say must survive me by 30, 46 or 60 days 2) New statute-w/o sufficient evidence of survivorship, beneficiary deemed to predecease donor a) Adv: go to next contingent beneficiary so they can use it, avoid double taxation i) If brain activity in W’s blood and not H-sufficient evidence but not sufficient evidence if one is better swimmer-3) Janus v Tarsewics a) Stan and Theresa-bro died-took Tylonel-T begins to fall(cyanide poasining)-paramedics-T looks like she survived w/EEG results and some witnesses b) S has life insurance-S’s mom(contingent beneficiary)—no evidence T survived S c) Here, S would have wanted to give it to mom b/c wanted T to be stable and then mom i) Maybe sufficient=clear and convincing? But court says T survived S so T’s heirs take d) New act-nobody takes if don’t survive by 5 days-has to be clear and convincing evidence i) Most wills-w/o c and c evidence b survives me by 45 days, then consider predecease 3. Share of Descendants 1) Lineal descendants take to exclusion of a/o else after S-what if child predeceases parent? i. A ii) B C iii) D E F b) English per stirpes(by stock)-divide at first generation-just drop down by line i) So here D would get ½ and E and F get ¼-vertical equity by family c) Modern Per Stirpes/Per Capita w/Represenation(1969 UPC) i) Go to first generation which there is living descendant-then do English stirpes (1) Adv: vertical equity beginning at 1st generation w/living taker-what people want (2) If F is dead and has 3 children goes 1/3, 1/3, 1/9, 1/9, 1/9 d) UPC 1990-Per Capita at Each Generation-horiz. equality-equally near equally dear 1. A ii) B C D iii) E f G (1) D gets 1/3-then split up remaining 2/3 between 3 so each get 2/9(look at page 76) 4. Share of Ancestors and Collaterals 1) Parents 2) A B C D E 3) Decedant F G H I J K i. LMN O P 4) After parent and spouse, sisters and bro(first line collaterals) take first a) Per Stirpes-¼ to B, ¼ to F, 1/12 to G, LMN get 1/36, O to 1/12, ¼ to J b) Per Capita-1/4 to B-3/20 to F G and J and 3/40 to LMNO 5) If no first line collaterals, then grandparents and great-grandparents a) UPC-escheats to state if no grandparents lines-most states-great-grandparents ok-will? 6) If only survivors are 1st Cousins and grand nephew-2 different ways to look at it a) Degree of relationship-how many spots from deceased and person-equal here b) Parentelic-go to parents first and then to grand-parents(likely to know parents) c) Mass-degree of relationship unless equal-for tie breaker-look to parentelic 7) Half-blood relations-most treat the same-some say half-bloods get half shareaa OK-if its that half-get the property-if non-half connection don’t get it 8) Disinheritanceaa Have two children-says I want none of property to go to A-in most states-if don’t say where property goes then ½ goes to each b) Rest 3rd of Property and UPC 2-101(b)-flips-allows negative disinheritance i) But should just write-I givt to B, if not to B’s descendants-If none of B’s-to NYU Sucession Problems Regarding Children 1. Meaning of Children 1) Adopted Childrenaa Hall v Vallandinghamii Facts: Earl V died-survived by 4 children-adopted by spouse’s new H. Earl’s bro has no spouse, no parents, no children-siblings take-do Earl’s children stand in his shoes? ii) Adopted by Jim(step-parent) though-does that cut off the childreniiii MD law-transplantation kids can’t inherit (1) BUT many states and UPC-make exception for spouse of custodial biological parent-just step-parent acknowledging the relationship-don’t want to cut them off iv) If wanted it other way-right a will b) Children can inherit through adoptive father(as if they are in the family) c) Don’t want to give adopted more rights-but we want what average decedent wants d) UPC 2-114-reverses Hall-transplantation theory except in adoption of biological parents S-most sates follow-TX-can be attached to anyone e) Amelia Minery-creates trust-3 sons-on death of last child-shoul pass to my then surviving i) Alfred is last surviving children-and adopts his wifeiii Modern view-adopted children-puts them on tree of all your people(same as biological child) iii) Old view-adopted child was not on family tree of adopted family(just parents) iv) Reject Stranger of adopted child v) Different b/c she is an adult-but adult person may be adopted in same manner w/same legal effect-Myra loses though b/c can’t actually mean that(so not really case) (1) e/t says same legal effectnot really consider it subrotage-thwarts intention f) Now trustswho gives next-give them power to appointgg Adult adoption-no coast to coast rule-trend allowing it now(better drafting-no problem) i) Reasons-give it to friend if don’t have any children, or remove standing from natural family, if adopt your partner-insulation against a will contest(intestate heir) ii) Modern view-count adopted child same as biological child-2) Posthumous children a) Children born after death of parent-280 days w/in death—then okay! b) Property law-if advantage to child in utero to be treated as already born, then do so 3) Nonmarital Child a) Child out of wedlock was only related to S and children(couldn’t inherit from M or D)but now can from M-hard to prove paternity-DNA test-now take out of grave or kin-testing 4) Posthumously Conceived Childrenaa Hecht banks 20 viles of sperm-in will-leaves sperm to GF for posthumoulsy conceived child-CA struggles whether he could leave sperm-conception never happens b) Woodward-Warren and Lauren-learn W has leukemia-bone marrow transplant so he banks some of his sperm-procedure fails and W dies 10/93-Lauren gives birth to two girls-Lauren applies to SS Agency for child’s benefits and mother benefits-they say no i) She appealed-SS Act-child of deceased father is eligible for benefits if child would qualify for intestacy purposes ii) Lauren-look at children-in artificial semination done by DR donor is not parent iii) Gov says—child can never be an intestate heir-draft will if want one iv) Common law judge-three factors (1) What is best interest of child?-always will be get the money (2) State’s interest in orderly administration of estate?-(a) In this case-don’t need to get into timeliness-no problem w/timing of files (3) Reproductive rights of genetic parent? Musth have consented (a) On remand—did this father consent to posthumous conception and supporting the children (b) Rest of Property-child must be born w/in reasonable time (c) CA-must show notice of posthumous consent and child born w/in 2 years c) What if 39 years later if agreed to it? Or 5 yeears? i) Under Woodward probably no b/c state’s interest, CA-no-Rest-not reasonable time d) Maybe won’t posthumous to take but balance against having to open estate again! 2. Transfers to Children 1) Advancements-lifetime gifts to child count against child’s share a) Would prove this by subpoena bank for record-but would say dad gave as gift b) UPC-if not a contemporaneous writing, not an advancement c) Most wills-they do count but could have written a will d) A lot of gifts aren’t advancements(if one child is more needy or sick)-UPC kills doctrine i) If knew to do a writing, then would write a will-so basically UPC kills advancements might have thrown it off b/c lots pay for college now e) Hotchpot Example-estate has $50K gave Bobby $10K Peter $0K and Greg $0 i) Take estate at debt $50K pluss add in $10K=$60/3=$20K eachiii P and G get $20K and Bobby gets $10K iii) If given more than his share-doesn’t have to give back(b/c knows T wants it) 2) Guardianship and Conservationsihp of Minors a) If don’t have guardian in will-need guardian of person-can’t give property to minor so need to set up guardianship-can’t give it to m’s parentsbb 2 ways to avoid it(these are bad so want to avoid it)! i) create will and make a trust-if beneficiary <21 give to Trust Co for benefit of children ii) facility of payment clause-fiduciary is authorized to pay $ to minor Section C. Bars to Succession A. Homicide 1) In Re Estate of Mahoney a) Howard Mahoney dies of gunshot wounds by his wife-Charlotte convicted of manslaughter-CT-says in states w/o slayer statute three approaches i) Legal title goes to slayer notwithstanding the crime ii) Riggs v Palmer-Elmer poisons grandpa-can’t benefit from your own wrong or iii) Constructive trust-holding it for other peoplebb Three areas or dispute under statutesii Should rule apply to non-probate transfers?-UPC applies to non-probate transfers ii) If not slayer—who takes-treat person sa if predeceasediiii Relevance of criminal conviction (1) UPC-criminal conviction makes sense-treated as disclaiming (2) What about acquittalthen should you inherit 2. Disclaimer-1) For intestacy and wills-if you disclaim an intestate succession gift or under a will—you are treated as having predeceased the donor-relates back to when decedent had died 2) Why disclaim? a) So you don’t have to pay taxes i) Under IRC-must be valid under state law and has to be w/in 9 months b) Avoid creditors-If disclaim and going bankrupt-kid isn’t responsibleii Drye v US-lots of loans his mom dies and he disclaims-so goes to daughter Theresa (1) T put all property in trust for benefit of her parents-(2) State law-you have no right-but under federal law you have right to disclaim (3) If wrote will saying leave it in trust to child—then IRS would not have a case ii) In handful of states, if you are insolvent that won’t work-(1) But most states—even if insolvent—disclaimer will work(fed law trumps st law) 3) UPC 2-1106(b)(3)-if in the event of disclaimer, the disclaimed interest passes to next takers a) Don’t like strategic behavior but if per capita at each generation(have more kids than bros or sisters) can disclaim and your kids will get more than you would! Chapter 4. Wills, Formalities and Forms Section A. Execution of Wills a. Attested Wills 1. Function of Foralities 1) Intention finality-can’t ask him what he means-and we have contests 2) In Re Groffman a) G dies-if intestate wife would get entire estate-if valid-two children and W(gets only LE) b) Attestation clause-signatures of 2 witnesses i) G says to B and L I’d like you to witness my will-Block signs while G goes into dining room. Then L goes in after B leaves-so then Leigh livescc Result: not valid b/c didn’t acknowledge or sign in the presence of both witnesses d) Wills act-shall be signed in the foot(subscription) by T and subsignatures shall be made or acknowledged(that’s my sig) by testator by 2 or more witnesses present at same time e) Purposes of Wills Act Statute i) Ritual function(cautionary functionary)-this was satisfied here ii) Evidentiary function-(against this would be interested witness, undue influence) iii) Protective function-protecting the people we are having-no issue here iv) Channeling function-wills tend to look the same b/c of formalitiesff What about substantial compliance-before recent cases—used to be strict compliance 3) Stevens v Casdorphaa Facts: before he died-Miller left $80K to nephew and rest t other nephew Casdorph i) C was named as executor-4 nieces who would take said will invalid ii) M went to local bank-in small lobby-signs on desk of Pauley watching-then she takes it to 2 witnesses M and W to sign e/t they don’t see him sign it-M was at desk b) Wills Act(WV)-no will is valid unless in writing, singed by T and unless (holographic), signature shall be made or acknowledged by him in presence of 2 witnesses and they should subscribe(sign at end) in presence of each other and testatorcc Majority-M and W didn’t witness M signing will nor did M show acknowledgement and he didn’t see them acknowledge his will—so invalid will d) Wade-if 2nd wittnes shows up and T and 1st W acknowledges and then 2nd signs—okay! i) Seems to say that substantial compliance is okay but no-why this narrow exception? 2. Wills Act Requirements 1) All of statutes say presence-must be signed in presence of testator-2 tests: a) Weber’s estate-T signs will w/it sitting against steering will and tellers look down at drive-thru bank-ct-this is not a valid will i) Line of sight-only in s/o’s presence if in line of sight(Weber, Castroph, Groffman) ii) Conscious Presence-w/in any of your five senses(but most juris. say line of sight) (1) G-witness 1 was in living room so he heard the person so conscious presence (2) S v C-saw each other-maybe bank teller didn’t see e/o though-not sure 2) Attestation Clause-on this month we A, B and C saw T sign the will and then they sign a) Under law, prima facie evidence of execution of will-just for litigation purposes 3) Subscription-some states-not just signature but signature at end(foot)=logical end 4) Publication-not just acknowledge its your signature must also state this is your will 5) Gulliver and Tilson-formalities are not ends they are means-want to reduce errors but want to give us good evidence that will protect them-if channeled then reduce cots of decisions a) Think about it two ways: do we require strict compliance and what should formalities be? 6) UPC 2-502-execution witnessed wills-holographic wills a) Except as provided in (b) and in 2-503, 2-506 and 2-513 a will must be i) In writing ii) Signed by T or T’s name by some individual in T’s conscious presence and by T’s direction iii) Signed by at least 2 ppl, each who signed w/in reasonable time after witnessed signing of will or T’s acknowledgement b) Will that doesn’t comply w/(a) is valid as holographic will, whether or not witnessed, if signature and material portions of the document are in testator’s handwriting 7) Re Estate of Parsonsaa Nielson has $100 under will, Gower has lot-N, G and notary are witnessesbb N and G both interested and statute requires 2 disinterested witnesses i) Purging statutes-purge interested witness w/what they would have gotten more than what they would have gotten if intestacy(if will=$10K, intestacy=$5K-only gets 5K) c) Nielson disclaims-relates back to my interest in being a witness i) Quintessential function of witness is at time will is executed-interested then (1) Must be disinterested at moment time was executed d) UPC 2-505-a/o can be a witness even an interested witness(CA though assumes UI) e) Common law-purge the spouse as well if they are witness i) If fiduciary-usually do not purge the commissions f) Purging statutes on their way out—but lawyer should strengthen the case 8) Execution Ceremony-sounds practice to write file to memo-we did it in this room and did thisss 30 years later can say I have contemparenous notes-followed procedure-9) In Re Pavlinko’s Estate a) Facts: immigrants knew no English-reciprocal wills-same wills but other name-have ceremony-Vasil died-signed will intended for Helen and vice versa b) Wills act: Signature, witness, writing-don’t admit it b/c wrong signature-one he signed didn’t inted to sign-10) In Re Snideaa Rose signs Harvey’s will and Harvey signs Rose will-If W doesn’t get all under will, then children share-adult children say give to mom-but GAL-in best interest-need $ i) 3 types of guardian(guardian of property, guardian of person(mom), guardian ad litem-mom and child had opposite interests) b) Court reformed terms of will(in case of K-people alive so can reform K-but might not want to reform here b/c dead)-c) 2 ways to deal w/these problems i) Wills Act Problem-substantial compliance-no signature but witnesses and writing ii) Reformation-admit will person signed-interpretation problems-11) Three options-substantial compliance, dispensing power, or lessen formalities a) NO malpractice b/c lawyer is dead, doesn’t have insurance, kids get unjust enrichment, w/fall of provity barrier—T and E bar malpractice liability 2. Rise of Curative Doctrines 1) Re Estate of Ranney-Will didn’t have attestation clause-but after had self-proving affidavit a) Attestation clause-b/t T and W1/2-we saw T watched him and signed in his presenceii In addition-write an affidavit-I saw so and so who is known to me sign my will and then I signed it as a witness(staple it to back of will)-very similar to attestation clause b) Some states follow 2-504(a) v 2-504(b)-UPC 2-504-2 kinds of self-proving affidavits i) Combined attestation clause and self-proving affidavit-testator and witnesses sign names only once(one-steop self proving affidavit) or ii) To be affixed to a will already signed and attested-affidavit must be signed by T and Ws in front of notary after T signed will and witnesses signed attestation clause= c) In Ranney-didn’t include attestation clause-by mistake used language of 2-step affidavit i) Affidavit-T signed and signed willingly-each W said he signed the will ii) Ranney’s wife only get LE and percentage-disappointed more if intestate iii) If need strict compliance w/affidavit doesn’t fit-we previously signed as W and now saying we are formerly witnesses d) Substantial compliance testii Does it express his testamentary intent? Yes ii) Does form sufficiently approximate to satisfy formalities to satisfy the purpose of Wills Act?-Evidentiary, protective, channeling-all satisfied-Langbein starts-NJ 1st 2) Dispensing power-If not in compliance w/Wills Act-treated as if it complies if clear and convincing evidence that T intended it to be his will-codifies result in Ranney a) In Re Estate of Hall i) Will-writing signed, missing Ws-valid under Sub Com if satisfied purposes (1) Clear and convicing evidence that thing is meant to be a will-YESiii J and B had two daughters from pervious marriage-joint will(don’t do)! iii) Made a change-at end of meeting, J asked lawyer if draft can stand as will until L sent them the inal version—said sure valid revocation but under 2-502-need 2 witnesses iv) UPC 2-503-if clear and convincing evidence this person intended this to be a will (1) This is good enough b/c put in changes and said tear up will to wife (2) Sandra-but you can’t use 2-503 to get around 2-502 rqmt of 2 witnesses (a) That’s the point of 2-503-only need to comply w/2-503 or 2-502 v) If Hall in NJ(Sub Com)-laweyrs usually witness-so 1 witness-probably admitted b) Difference b/t SC and DP-(langbein moves to DP) i) More expansive-comments-2-503-further away from Wills Acts-(1) DP don’t worry about whether sufficiently tracks formalities-(2) Hard for proponent to show clear and convincing evidenceiii DP-not signle case dispensed if no document b/c hard to show evidence (1) Only dispense w/o signature in switched wills (2) Always dispense w/attestation b/c least important iii) As a judge you can adopt substantial compliance but DP you need a statute (1) If statute says can do 2-503-does that mean you accept holographic wills? Sort of 3) Holographic wills-narrow DP for particular sets of fact-must comply w/wills acts unless totally in handwriting of T-don’t need formalities b/c we have evidence a) Kimmel’s Estate i) T wrote a letter-I have valuable papers-we’ll see if I can come-death happened— ii) Testamentary Intent? Yes-if a/t happens-keep this letter it will help you out iii) Signature-says father-that’s way he signs it-has ritual, protective, evidentiary function (1) What if condition and didn’t happen-doesn’t matter just inducement to write will b) Another case-farmer notice on tractor-If I don’t get out of mess, e/t to wife-that’s okay! c) 3 statutes i) 1st Generation-will must be entirely written and signed by T-(1) some must be entirely written and dated ii) 2nd generation-material provisions of will must be in T’s handwriting (1) if bnak officer makes minor adjustment-okay-if will form-fill in blanks-problem iii) 3rd generation-1990 UPC 2-502(b)and (c)-(1) b. material portions be in handwriting of T-how do we know these are vlaid (a) Mulkins-1st generation-I make my will to my sis-shows T intent-valid (b) Johnson-2nd gneeraiton-take out preprinted words-NO-(i) Judges looked at nature-if matched moral obligations-proof was easier (c) Mutter-pre-printed-handwriting-To my wife R our property (i) J is stronger-so might not be good law under UPC (ii) Comment UPC-valid holographic can be printed form if material portions are handwritten-just b/c printed-won’t disqualify if rest handwritten (2) C. can look at extrinsic evidence and see if meant to be a will-(a) Doesn’t matter if 57 clergy said wanted it to go to NYU-they need to say intended it to be a will(can also look at typed, stamped documents) d) In Re Estate of Kuralt i) Facts: Kuralt had relationship w/Pat Shannon-87-executes holographic will devising property to Shannon-94, L ‘s will provokes prior will-leave e/t to W and C (1) 1997-gives S property-sham sale-June hospital sick-writes to Shannon-I’ll have L come to be sure you inherit rest of property if it comes to that-dies first though ii) S’s lawyer-holographic will is invalid b/c of subsequent will but (1) Holographic codicil-amends rather than replaces a will-since doesn’t conflict w/whole will and didn’t revoke it—writing, signed testamentary intent-probate it? iii) TC: letter says anticpate another testamentary instrument-(1) Montana SC-look at EE-remand for evidentiary hearing-(2) DC admits it to probate now iv) Estate argument-not holographic will(needs writing and signature-only says C) (1) Admit EE to show evidence meant to be a will-secret relationship-(a) All of that is persuasive evidence that this is what he wants to happen (b) BUT 2-502(c) need to show EE that this is meant to be a will! None here (i) Prior holographic will-knows how to make one-got statute wrong! v) This is one step further-now look at what he wanted—what about protective? 2. Revocation of Wills a. Revocation by Writing or Physical Act 1) 2 ways to modify or revoke a will(subsequent writing or physical act) 2) UPC 2-507-revocation by writing or act a) A will or any part is revoked by i) Executing subsequent will that revokes will or part expressly or by inconsistency or ii) By performing revocatory act on the will, If T performed act w/intent and purpose of revoking will or part or if another person perfomed act in T’s conscious presence and by T’s direction (1) i.e. burning, tearing, destroying=revocatory whether or not touched words on will (2) most state statues though-cancellation is ineffective if doesn’t touch words of will 3) Substantial compliance for revocation?-maybe purpose is satisfied for revocation 4) Dispensing power-if willing to apply for execution why not for revocation? 5) Revocation by writing-I revoke all testamentary instruments prior to this day a) Inconsistencies b/t earlier document and this one-leave e/t to A and later ring to B i) 2nd writing-not meant to revoke—just a codicil-later writing that is inconsistent(not wholly) revokes earlier will to extent of inconsistencies ii) Will always revoke s/t prior if leaves complete disposition-but say revoke just in case iii) If tear up codicil-A gets e/t-if revoke codicil by physical act doesn’t revoke earlier will just revokes codicil iv) But if tear up document that says leave e/t to A-if revoke will by physical act, then will and codicils are revoked b/c codicil depends on underlying will 6) Harrison v Birdaa Facts: 1989-executes will w/Harrison as main beneficiary-original left w/lawyer and duplicate given to H. Duplicate original-2nd will executed at same time-either admitted to probobate because executed at same time. Diasy Speer calls lawyer-I want it revoked so L tears it into four pieces and sent it to her, searched house-n/b found it b) If will is known to be in possession and after diligience can’t find willthere is rebuttable presumption will has been revoked(burden to rebut is on proponent) c) 2 arguments: duplicate original and thought it was already revoked d) Maybe fraud b/c heirs usually first ones to searchii Rebutted if recently referred to their will(week before T died wrote letter about will) ii) H and W fighting can’t find willmight be enough to rebut the presumption e) Why not valid when tore into 5 pieces maybe under SC or DP could be revocation f) What if tore into four pieces-found in filing in enevope revoked willii Traditional law-no revocation b/c regulatory act and no writing-doesn’t say I revoked ii) Substantial compliance-yes b/c lawyer ripped it up g) Lawyer gave her original puts in original-I have revoked this will i) Substantial compliance-no witnesses, past tense-enough to satisfy wills act? ii) DP-clear and convincing evidence thought it was revoked? YES 7) Thompson v Royall a) Facts: Kroll tells lawyer Cooling in front of 2 WS that she wanted to destroy will and codicil. C says instead of destroying keep in case want to write a new will-so on back of will and codicil said this will is null and void-just held in case want to write another one b) Court-not revoked b/c must revoke by i) Writing-not attested(lack of witnesses) so not formal will ii) Holograph-but wasn’t in her handwriting-was in C’s handwriting iii) Physical Act-doesn’t say on face of will-problematic physical act-same if wrote on margin or if scribbled directions-b/c here must touch the words( but not under 2-507) (1) If mutilate signature-that’s canceling or crossing out that’s canceling iv) Substnatial compliance-no witnesses but close enough-DP-c and c evidence-yes 8) Partial Revocation-probably has more chance of fraud-but modern authorities is towards yes b. Dependent Relative Revocation and Revival: 1) LaCroix v Senecal a) Facts: Dupre executed will and then a codicil and then is dead. March-leaves to nephew Nelson and one half to Senecal-writes codicil-I revoke residuary clause ½ to may nephew Lamar aka Nelson and other half to Senecal-same thing but not using nickname i) Problem: in codicil-Senecal’s H is one of the witnesses-purging statute-spouses no good so Senecal would get nada-but wanted her ½ b) DRR-if purport to revoke a will under mistaken belief of law or fact, court will disregard the revocation(presume prefer old will to no will at all if new will fails) i) Codicil revokes prior residuary clause but mistake of fact(thought S wouldn’t be purged)-ignore revocation wrt Senecal and ignore purging statutes c) Intestate heirs-we want purging-b/c If S’s half is invalid or predeceased-portion goes by intestacy(e/t most states say residuary sharesplit among other residuary beneficiaries) d) For DRR to be valid-T must make mistake of fact and had he known the truthwould not have revoked(here if knew S would take nada-would not have revoked-2) If combine DRR w/partial revocation by physical act a) T’s typewritten will leaves $1K to nephew-crosses out $1K writes $1500-initials and dates-T dies-in state where holographic will is valid-nephew takes i) If state doesn’t allow partial revocation by physical act-Blake gets $1000 ii) If permit partial revocation by physical act-have cancellation of will and new will is not valid-since T wouldn’t have crossed out $1K I knew wouldn’t get $1.5K-gets $1K iii) Now if cross out and say $500-revocation but invalid will b/c not attested and not holograph iv) If knew $500 wouldn’t be valid-would he have crossed it out?? If $1 no DRR (1) Ct: DRR should not be applied for larger bequest-would prefer nada to $1000 b) Problem 2-handwritten will-$5K to John Boone-crosses out John and writes Nancy i) Nancy can’t take b/c not holograph or attested-partial revocation by physical act ii) Would T have revoked J’s share if knew N wouldn’t take? If H and W—different 3) Limits on DRR a) Need evidence that ignoring revocation is closer to what T would want-S had prior will i) Can’t give effect to $1500 but can ignore revocation if that is close enough 4) Estate of Alburnaa Facts-1954-A moves to Milwaulker to live w/grand-niece Viola-executes Mil will leaves jewelry and furnishing to V and residuary estate to Olga, Lulu and Doris. 1959, T moves to Kankakee to live w/brother Robert-Kankakee will-revokes prior will gives 38 to Olga, jewelry to Doris and Viola and now 1/10 to Robert-V gets more in M-R gets more now. In 70, went to Wisconsin and died there-she told him torn pieces of her Kanakakee will so it’s revoked-Says I revoked K will b/c want Milwaulkee will to stand b) At that time in Wisc-no revival of revoked will-if execute will 1 and then will 2(expressly revokes will 1)-so now if revoke will 2-will 1 is still revoked-then would go to intestate! c) Would she have revoked will if she knew Mil will wouldn’t come back to life? i) E/t Kankakee is closer to what she wanted then intestate-must be confident that undoing it gets us closer to what she wanted d) DRR is option of 2nd best-Mil will would be best option-but allows DRR hereee 2 ways to get here-change revival rules(if revoke will 2 bring will 1 back to life) f) UPC 2-509-Revival of Revoked wills-if will 2 wholly revokes will 1, revocation of will 2 doesn’t revie will 1 unless proponent has shown evidence that meant to revive will 1 i) Under this revive Milwaukee will here g) If will 2 revokes will 1 in part, and revoke will 2 by physical act, that revives rest of will 1 unless there is evidence to contrary(presumption of yes revival in partial and no in full) 5) Suppose in jurisdiction in 2-509 and adopted 2-503-will we ever need DRR a) Yes-tear up thinking revive old will-don’t need DRR just show earlier will and evidence b) If cross out $1K -w/dispensing power-would get $1500 b/c C and C evidence 6) DRR should maybe be less-b/c doesn’t give result of what T intended-give T what he wanted! c. Revocation by Operation of Law 1) Slayer rules-if beneficiary of will and I kill you I don’t take 2) I leave all property to child a and child b(have c later)-pretermitted-should leave to issue 3) Marriage-some states-if execute a will and then get married-will is revoked to extent necessary to give new spouse intestate share(not clear why have this b/c forced share) 4) Divorce(divorce revokes for spouse)-what if for non-probate transfers-should be revoked a) UPC 2-804-revokes spouse’s share in non-probate and will-but st statutes not all for n-p b) If five mins before divorce I drop dead-S still takes-so might execute during proceedings 5) If after divorce-leave 25% to W’s sisters-most statutes don’t reach that! 3. Contracts Relating to Wills 1) If K not to change-it’s law of Ks not wills—there are two types a) Contract to make a will(to make testamentary disposition) i) If you keep working til I die, I’ll leave you $-dies w/o provision for shofar ii) Law of wills-oral promise is not a will b/c no writing, no attestation iii) Look to Ks-stayed at work=consideration-an exchange iv) Most states extend SOF to include testamentary disposition-must be in writing signed by one against who is being charged (1) NY-doesn’t allow holographic willsvv Consideration substitutes wills acts formalities and restitution for unjust enrichment b) Contracts not to revoke a will—almost always done by H and W-should do trust instead i) Joint will-1 will for two parties-we leave our property to-probated twiceiii Mutual(reciprocal mirror-image will)-two wills-mirror image provisions (1) H and W each live property to survivor-if 2nd to die to our children (2) Has to refere to them having a contract-H and W have identical wills-letter saying both won’t revoke w/o consent of e/o-evidnece of agreement-but need evidence 2) Via v Putnam a) Facts: 1985, Edgar and Joanne-mirror-image will-entire estate to e/o-2nd to children. J dies E remarries Rachel-E dies w/o changing his willbb Rachel argues pretermitted share and forced share c) Children-writing to evidence a K-J wouldn’t left all to E unless he gave all to them i) Creditors go first if run over children -so here saying we are K creditorsdd Here probate breaching willii If W dies w/o changing will and E executes new will to R-kids can’t sue for breachonnl breaches when he dies—so they make you wait e) If 1st to die doesn’t comply-that is fine and you are free to do whatever you want f) Most states-K first then wife’s forced share(here opposite=minority)-b/c PP needs support g) Partnership theory-property owned by 1 is really owned by otherii If write prenuptial agreement-waiver and knows about it-1st wife blocks 2nd wife h) No the policy prevails-so K must stand-3) Issue: If dad doen’t remarry but puts all money and donates it to NYU-breach of Kaa Has $1M and week before he dies wins lottery-gives $79M away-consistent w/what they wanted b/c promise to leave all your property to children-changed circumstance-bad idea b) Should transfer all property to revocable trust-income to H and W for life then children B. Will Contests 1. Mental Capacity 1) In Re Estate of Wright a) Facts: Lorenzo Wright-crazy-played dead-didn’t talk to grandchild-strangebb Law of capacity four part test(standard is quite low!)-does he know i) Nature and extent of his/her property? Might just exaggerate ii) Natural objects of his/her bounty? Didn’t say hi to grandson-but not vice versa-no evidence doesn’t know family iii) Disposition that he/she is making of property and must also be capable of-does he understand terms of will-yes iv) Relating these elements to 1a/o and forming desire regarding disposition of property c) No evidence he wasn’t mindful of property he made-testimony by Ws guy is crazy i) We are dubious about witnesses and realtor b/c why sign williii But if lawyer says lack capacity-must make sure he is colorable-make own judgment d) Require more capacity for inter vivos transfer than for testamentary but need higher capacity to get married-b/c if I give away all my property and am alive-have no propertyee Care about capacity b/c protecting yourself from you! 2) Insane Delusions(subset of testamentary capacity) a) Insane delusion-false belief to which you adhere against all evidence to the contrary i) False belief that rational person could not have held onto it ii) To extent it effect testamentary disposition, that part of it is not valid b) In re Strittmater i) Facts: Think men are all terrible-left to Women’s society-hated men-dad abused? ii) Court-her hatred form men showed insanity and lead her to leave property to National Women’s Society---Wright is more typical this is in on margins-look to next case c) In Re Honigman i) Facts: Frank(H) makes smallest possible gift that elective share would make-leaves rest to bros and sis b/c believed W was having affair-sent anniversary card just to W ii) Ct: in light of circumstances of happy marriage, he repeatedly expressed concern (phones, sneaking men)-ct has no problem placing sanity in jury’s handsiiii 2 part test-if both answered yes-then strike down the disposition (1) Was this an insane delusion (2) Would he have made this disposition but for the insane delusion iv) Test: If person persistently believes supposed facts which have no existence except in his mind and against all evidence he is having delusion v) Jury comes back for wife e/t he told lawyer bros and sis need it more and affair vi) Would have made this disposition but for insane delusion? NOT but for in this opinion rather could have or might have affected-bending over backwards for W vii) If will invalid—she gets ½ and bros and sis gets half-today would only get 1/3 viii) Melanie Leslie-so fuzzy must let own view of what should happen come to play 3) Defense of Tacticsaa I want you to see a psychiatrist in his expert opinion-you understood 4 prong test b) Could videotape the guy-I know who my family is-don’t like X, Y and Z but if makes minor error-they will say incompetence-didn’t know his family b/c wrong name Section 2. Undue Influence 1) Modern courts often speak about 4 part test: a) T was susceptible to UI b) Influencer had disposition or motive to exercise UI c) Influencer had opportunity to exercise UI and d) Disposition is result of UI i) But still must figure out what UI is 2) Estate of Lakatosh a) Rose and friend Roger-sh’s in poor health cut off from family-Roger helps-and she names R as power of attorney-leaves him bulk of estate(drated by R’s 2nd cousin) i) T was susceptible to UI, R had motive, had opportunity, and result(harder to say) b) Test-if yes to all then Roger has burden of proving no Undue influence: i) Burden shifting was that there was confidential relationship?-has power of attorney ii) Received bulk of estate? Yes iii) Decedent’s intellect was weakened? Yes c) -flips presumption if confidential relationship as caregiver.-must show where family is d) 2 ways to show UI i) direct evidence-hard to show that nurse manipulated her ii) Circumstantial evidence-combine this with burden shifting 3) Comment H to 8.3 a) Existence of coniential relationship not enough to raise presumption of UI-must also be suspicious circumstance surrounding preparation, execution or donative transfer-Factors: i) Donor was in weakened condition-mentally, physically or both-so susceptible to UI ii) Extent to which wrongdoer participated in prep of procurement of will/will substitute iii) Whether donor receive independent advice from attorney or disinterested advisors iv) Was it prepared in secrecy? v) Had donor’s attitude changed b/c of relationship w/wrongdoer vi) Is there discrepancy b/t new and previous will or will substitutes of donor vii) Contuinity through former wills indicating settled intent in disposition of property viii) Disposition such reasonable person would say is unfair(disinherit deserving fam?) 4) Lipper v Weslowaa Facts: Next door son gets disproportionate share-drafted by son. Block married 3 times-Juilian is son of 1st-widow and orphans challenign will-2nd marriage-Lippers=children b) Presumption that UI b/c neighbor son is drafter-jury finds UI c) Appellate Ct: reverses UI-no rational jury-no evidence of UI d) Should draft will for family member unless even-puts in no-contest clause-if contest, then get nothing-but get n/t a/w-so who cares-enforced if person had probable cause i) Other states-contest clause is enforceable-have to show you are going to win ii) NY-intestate heirs can depose Ws to decide whether to bring contest e) CT-evidence that Bernice told friend didn’t want court business-told 1 person before will and 3 after didn’t want to leave a/t to that family(jury didn’t focus on it)-f) UI-bequest to draftsmen-in CA-bequest to lawyer invalid unless related by blood/marriage-most states just say presumption of UI-so asking for contests g) Legal Ethics-can’t draft a will for your own benefit-if not related—Maybe suspension i) Asking for contest-if 5) In Re Mosesaa Facts: drafted will leaving estate to attorney lover-T dies-elder sister says UI by attny. She goes to another lawyer and he drafts it and sends a copy-then redrafts and executesbb UI was enhanced-strong evidence b/ill and alcoholiccc Attny-I made mistakes and she caught them—if old man(would just say lucky guy) d) Dissent-what else could she have done-how do you exert UI to will you don’t know about-could have created inter vivos trust-but make UI argument-why does sex show UI? 6) In Re Kaufmann’s Willaa Robert is air head-writes will leaving all to Walter-holds opposite-W deposed said no sex-but then found out did have sexual relationship-so now UIbb Almost every case is wrong except first-presumption shifts burden just know that 7) Seward Johnson-Nina Zagat-Seward got his 4th marriage-all had >$10M-gave W a lot-final will executed in FL—executor’s commission used to be capped at small amount-but L writes for benefit of wife-NY limits unless separate affidavit-testator can name s/o else as executor 3. Fraud 1) Carson a) W and H married for 25 years—but really invalid b/c he had other Ws b) Fraud in the inducement-person misrepresents facts, causing testator to execute a will to include provisions in wrongdoer’s favor or to refrain from executing or revoking a will 2) if H says to W-you know will leaves you all property-can you rip up will(not really a will) a) Fraud in the inducement-occurs when person misrepresents character or contents of instrument signed by testator, which does not in fact carry out T’s intent 3) Pluckett v Krida a) Facts: Housekeeper taking advantage-nurses provide full time care-say relatives were wasting her $ to put her in nursing home(no evidence) and totally isolated her b) UI-isolation of family is alarming-manipulation that says doesn’t want to see you c) Fraud-misrepresentation(spending her money and nursing home) that affected disposition i) Ct says fraud and UI-usually close-fraud-free agency of T remains but you are misled to doing what you ordinarily wouldn’t have-UI-s/o else is imposing their will on you ii) Fraud in the execution-this is my life will but I say sign for pizza-both similar iii) Fraud in inducement-e/o hates you I only like you-this should be inducement-4. Duress-put me in will or I’ll blow your head off 1) Rest 3rd of Property-transfer is procured by duress if wrongdoer threatened to perform or did perform wrongful act that coerced donor to make donative transfer wouldn’t have o/w made 2) Latham v Father Divineaa Facts: Lyon executes will leaving almost all ot Father Divine-will by reason of physical force, DS prevented her from executing will-killed her w/surgery b) Can’t give it to P’s b/c no signature, attested-so impose constructive trust on Ds i) Equitable remedy-original will is probated and given to inheritor but court imposes constructive trust on beneficiary and hands it over to B c) Will 1 is executed properly for A and B-will 2 is for C and D-on way to execute will 2 A alone through duress prevents testator from executing Will 2-T diesii Put constructive trust on A and give money to C and D and B b/c innocent? 3) Pope v Garrettaa Facts: Some but not all of C’s heirs by physical force or by creating a distraction prevented her form writing will-so innocent and guilty heirs ALL have constructive trust i) b/c if not would be unjustly enriched-2-503 argument-bu not e/w-but use con. Trust 5. Tortious Interference w/Expectancy 1) claiming that b/c of s/o tortuous conduct-split authorities over it 2) Marshall v Marshallaa Jay Howard-promiesd her would get all kinds of $-son was fraudently taking out money b) DC-TX would recognize tort of interference-look to what state law would do i) Test P must prove (1) Existence of an expectancy (2) Reasonable certainty expectancy would have been realized but for interference (3) Tortous conduct involved w/intereference and (4) Damages c) Gave her $44M in damages and $44M in punitive damages d) If adequate remedy in will contest-must go to probate-only if inadequate can bring tortuous conduct-probate exception-federal courts won’t probate a will-some states recognize this tort now C. Interpretation of Wills 1. Mistaken or Ambiguous Language in Wills 1) Mahoney v Graingeraa Facts: Testator said-I have 25 first cousins wants to share-To my heirs at law, share alike b) She dies-has maternal aunt and 20 first cousins-only aunt gets estate-always gets first c) Only can look to EE if there is an ambiguity-lawyer made mistake d) Unless s/t ambiguous on face of will, shouldn’t apply EE e) What if my heirs per stripes-speaks to my issue-have heirs or descendants-more ambiguity than heirs at lawff Gustafon v Synson-widow was his heir-testimoy T didn’t want E’s devise to go to widow inadmissiable b/c court was of opinion heirs per stripes not ambiguous-so widow took g) If will is valid-aunt takeshh T lived Perry Manor-sells nursing home-PM now has n/t to do w/testator-PM still gets it! i) Cigar store-Mr. Mosely helps I leave money to Mrs. Mosely-real Mosely gets it i) Personal usage exception-if EE shows testator always referred to person in idiosyncratic manner, evidence admissible to show T meant s/o other than name (1) Mahoney-object b/c he doesn’t care(lawyer)-but here subjective ii) Latent Ambiguity-s/t ambiguous only in light of EE do you know its ambiguous (1) I leave all property to niece Stacey-have two nieces-need EE to show which 1 (2) I leave residue of my estate 25% to A, 25% to B-25% to C-Ct: 1/3 to each 2) Arnheiter v Arnheiteraa Facts: ½ interest of premises known as 304 Harrison Ave, Harrison NJ-doesn’t own 304 b) Can’t reform a will-but can ignore 304 and be Harrison Ave-so ambiguity so bring in EE and shows only owes 304-but really no difference 3) Estate of Gibbsaa I leave all my property to Robert J Krause-at 408 N 46th Street-is RJK at that address b) Unless testimony, EE is admissible to determine intent-had relationship w/R W K c) Mere details of id can be changed d) Langbein-really reforming will and lying!0no reformation or no EE doesn’t make sense i) If innocent mistake by lawyer-don’t fix it ii) If have innocent effect b/c lack volition we fix it (1) Lawyer knew he didn’t mean that=should rely on that more! (2) Can always bring in EE to show execution-but can’t say meant cousins e) w/Wills Act formalities-strict compliancewater down formalitiesSCDP f) Execution of wills-reaons to correct i) Policies at play-medical witnesses-lawyer would be good evidence ii) Fix this in K and nonprobate transfers-watering down of the rules c. Opening Reforming Wills for Mistake 1) Erickson v Erickson a) Facts: H and W widow and widower-go to lawyer before marriage-draft will now so e/t ok-drafts will ane executes before wedding-leave to e/o if not to kids equally-H dies b) If will weren’t valid-would go to children-marriage revokes will in some states provided will doesn’t expressly intend to be valid after marriage(doesn’t have this language) c) TC:-nature of provisions and short time b/t will and marriage-clear and convincing evid. d) SC: says no i) Doctrinal reasons-must look at face of will under revocation statuteiii Policy reasons-drafter made a mistakeee Evidentiary standard-clear and convincing evidence of error and what testator wanted i) Same evidentiary for DP and SC-but for UI and lack of capacity-preponderance ii) Overrules CT Jr b/c we do it in UI and K, why not here?-in CT Jr-gave to charities and then changed charities w/codicil-then exected new codicl bequest to charities but quoted first charities instead of second charities iii) Gibbs-now not sure if clear nad convincing b/c maybe good relations w/aunt 2) Rest 3rd or Property: Wills and Other Donative Transfers a) 12.1 Reforming donative documents to correct mistakes-donative document though unambiguous may be reformed to donor’s intent if following established by c and c evid: i) mistake of fact or law, whether in expression or inducement, affect terms of doc. ii) What the donor’s intent was b) Direct evidence of intention contradicting plain meaning of test as well as other evidence of intention may be considered in determining whether 1 and 2 established by c and c 3) Mosely cigar shop guy-leave $20K to Mosely(meant trimble)-C and C evidence of mistake and what T wantedaa Erickson-give kids intestate share should have deadweight malpractice i) Not always culpable(honest mistake), unjust enrichment(shouldn’t get property) ii) Must litigate mistake and what person wanted(litigate against lawyer cost $) 4) Patent ambiguity-used to not be able to bring in evidence now can(i.e New York Law School aka NYU)-hard to tell difference a/w and trend is towards correcting mistake 2. Components of a Will a. Integration of Wills 1) What constitutes will-if will w/4-5 pages-all in writing-no problem what papers present 2) 2 scenarios a) Keener-four pages of will stapled togther-2 were preprinted signed by T w/Ws i) Other two pages-homemade list o who beneficiaries were-signed by T-this guy wrote handwritten not not valid b/c only one witness-so staples will form to other 2 pages and has Ws sign-wants to make these four pages the will ii) IN-this integration is not part of our will-wills have to be signed on 1 pg-can’t be true b) Re estate of Beale-professor on way to Russia-stops in NY-this is my will will you sign i) Sneds to sec to make changes-dies before changes-which are last two pages of will? (1) Not integrated b/c not present as part of will and not part of a will (2) Can’t take executed will and pull out page and stick in a/o one-b/c no witnesses (a) e/t present at time of execution only is integration (b) DP-c and C wanted to be will? SC-have enough of wills acts formalities (i) Tougher case under SC but DP probably b. Republication by Codicil 1) Republication by codicil-entire will is republished on date of codicil if consistent w/T’s intent a) If execute Will 1 and will 2 revokes will 1 and execute codicil to will 1-probate will 1 and codicil b/c by executing codicil republishing will 1-if consistent w/T’s intent b) Helpful b/c if A is witness and beneficiary to will-codicil has new witnesses so good! c. Incorporation by Reference 1) 2-510-incorporation by reference-any writing in existence when will is executed may be incorporated by reference if language of will manifests intent and describes writing sufficiently to permit its identification(must specifically refer to it and must be in existence) 2) Wills Act Formalities still protect us in executing document that refes to other one a) If says schedule I will prepare next week-doesn’t work-if write schedule before-ok b) But if say schedule I’ll write 10/5 and on 10/10-right codicil-okay b/c republish 3) Clark v Greenhalgeaa Facts: Helen Nesmith executed will in 77 and calls cousin Greenhalge as executor and beneficiary-gets all except memorandum left by T and known to Gii Memo syas leave XYZ changed in 76-executed will in 1977-in 1979-perpares notebook w/another lits of items-give Ginny painting-told her she’d leave it to G ii) Told nurse to write in notebook G gets painting(can’t be incorporated b/c not at existence at time of will) but at end of 80-executes codicil to will-seems consitent w/T’s intent so should be republished on date of codicil—so then notebook is in existence on date of publication-it was republished and incorporated by reference b) Arguments why it shouldn’t be this way i) Executors-this is notebook-not memorandums in will-ct doesn’t like G ii) doesn’t say-how do we know Painting was in notebook before codicil republished iii) Language of wil= intent to incorporate-some states-not only exist and manifest intent but also have to say that document exists(here didn’t say document exists) c) This is what she wants-nurse’s testimony-ct ignores-have to refer to s/t specifically d) Can’t edit what you want to give away from time to time but ct lets her 4) UPC 2-513-Separate Writing Identifying Bequest of Tangible Property-few states adopt a) Whether or not provisions of holographic wills apply, will may refere to written statement or list to dispose of items of tanbile property(other than money)-writing must be signed, describe itmes and devisees w/reasonable certainty-may be referred to as one to be in existence at time of T’s death, may be prepared before or after execution of willmma be altered by T after prepration and may be writing that has no significance apart from effect on dispositions made by will-so this would let Helen do whatever she wanted 5) Simon v Grayson a) Facts: Ts will dated 3/25/32 left $4K to executors to be paid by them as directed by me in a letter-that will be found in my effects, addressed to my executors, dated 3/25/32 i) Executes codicil a year later-finds one date 7/3/33-says where $4K should go b) Ct: July letter is incorporated by reference e/t not document referenced to i) Existence okay b/c codicil a year later—wrong date but could be good evidence c) Only right if we believe in 2-513 or dispensing power-not right about incorporation by ref 6) Johnson v Johnsonaa Facts: lawyer did wills-tells insurance agent I need you as witness for my will. Then agent asks if needs him to be witness-no I did a codicil-tells people about will-will is type written documents-writes in another bequest by hand at end b) Ct: republication by codicil-holographic codicil to prior will(signed)-so republishes will i) Incorporation by reference-can incorporate invalid executed wills c) Principle of law: validly executed codicil operates as republishing no matter what defect there is in the will-(can overcome capacity or interested witnesses) d) Incorporation by Reference-last paragraph-codicil incorporates by referenceii Does handwriting incorporate by reference the typed will? e) This holographic language incorporates by refernce the stuff at top-if that is true then it would only be one big will so we can’t have incorporation 7) Plummel a) Facts: Handwriting on one side and typed on other-incorporate by reference typed page i) Purpose of statutorygood evidence and looks like no UI 8) Hayley-integration case-Dissent a) Only one will signature of handwriting –can’t go w/DP or rep by codicil i) Is this integration or incorporation (1) If one willintegration and fails b/c not in total handwriting (2) If top is separate-holographic will incorporating by reference a prior document b) Dissent-all one will-b/c all present at same time-if two pieces of paper-incorporate by ref i) 2 pieces of paper though more likely for fraud so why say that ii) although shouldn’t be incorporation-weak but right result b/c can’t be rep b/c top isn’t executed properly d. Acts of Independent Significance 1) I leave you my car in my will-driving Pinto-now Rolls Royceaa Significance independent of testamentary intent, then it’s okay-didn’t get new care 4 u 2) Problems page 28 a) T’s will-I leave to Newman contents of my safe deposit box at Washington Mutual i) Can pull things in and out-not too worried about fraud b/c hard to get into box ii) Safe box has testamentary intent-always upheld-no chance of fraud-ind. sig. (1) Not supposed to be about fraud-just do you do these independently? b) Leave contents of my desk-easier to sabotage-lacks independent significance c) Leave contents of my house to N-Things in and out of house-won’t be driven by testamentary intent-so independent significance-3. Passage of Time and Changed Circumstances Since Execution of the Will a. Death of Beneficiary 1) Default Rules a) Death of beneficiaries-beneficiary must survive T i) Specific-leave gold watch to you-you predecease me-lapses falls into residuary ii) General-I leave you $100K-you die first-falls in residuary (1) Don’t say even if you don’t survive me(b/c then must open b’s estate) (2) Do-I leave you $100K to you and if you don’t survive me-to your heirs per stirpes iii) Residuary-I leave all my rest to X and Y but X predeceases me (1) Default rule-no residue of the residue-X’s goes to intestate(to take must survive) (2) Average person would want Y to get it though-so say All remaining residuary to A B and C whoever survives me-most rules allow this a/w iv) I leave all my property to singer named Elvis-void devise regarded same as lapsed (1) Lapse-beneficiary died after execution, void-beneficiary died before execution (a) w/void more questions about Capacity 2) Estate of Russell a) Facts: I leave all my property to Chester and Roxy(Roxy is dog)-R dies get new dog R i) Allow EE to show latent ambiguity to find out Roxy is dogbb Probably though Chester gets property and take care of Roxy-gold piece to niece i) Court says no-inconsistent w/disposition that leave equal shares(?) to R and C (1) Only meaning which they are reasonable susceptible-wanted to make them TIC c) Didn’t mean this Roxy-void and lapsed-so maybe just say void and go to residuary i) Nobody says no residue of residue(if void gift/lapse gift and no ROR-C gets all) d) So if lapse or void gift falls into residuaryii if already in residuary no residue of residue then that part fails goes to intestate shares ii) if abrogated rule(most jurisd. and most wills)-goes to other residuary beneficiary e) Pet Trust-$ set aside for pert’s benefit-need s/o to enforce it for valid will f) Extrinsic Evidence-to show Roxy is dog(Mahoney can’t use EE to show heirs is cousin) i) Always can bring in EE for latent ambiguity g) Leave property to X and dog-could be thought dog goest to C or ½ to C and ½ to dog i) Why interpret that hse’s crazy h) I leave property to my children A and B(A dies w/kids C and D)-A’s lapsed-so goes to B 3) Anti-lapse statutesaa Have to survive unless in protected class(i.e. descendants) then doesn’t matter if lapsed i) Leave all property to brothers A and B(A dies before me)-still want A’s kids to get (1) Most states-descendants of your parents are in protected class ii) Leave property to first cousin A and B(A predeceased me) (1) Some states-descendants of your grandparents are in protected class b) Most anti-lapse don’t include spouses b/c-if it does lapse goes to intestate heirs which are my surviving descendants-so don’t need to include spouse will go to descendants anyway c) All states have some form of antilapse statute-doesn’t prevent lapse just redirects lapsed property to the beneficiary’s issue-Under common law i) If abgrogated no residue of the residue, B gets all ii) If have no residue of residue, ½ goes to B and ½ to intestate d) Issues w/these (1) most states limit it to Only if beneficiary(devisee) is descendant of T’s grandparents, descendant of T’s parents or descendants of testators-how far to go out? i) (2)-not dealing w/C and D buit I leave watch to A, bracelet to C e/t else to ARC (1) if A’s married-H is heir-to issue or spouse maybe? Most states don’t go that way ii) (3)-Scope of statute-have you opted out of anti-lapse statute-required survivorship? 4) Allen v Talleyaa Facts: to my living bros and sis then names 5 sis and bros share and share alike. 3 of 5 die beore Mary does-each leave issue-statute-devisee who is descendant of testator or testator’s parent(A B and C are descendants of T’s parent b/c siblings) i) If anti-lapse statute applies-G, H and I(A, B and C’s issue) should take b) Court-anti-lapse didn’t apply b/c word living meant time she diedcc Share and Share alike-A, B and C-A B died w/issue-how do you deal w/this i) If abrogated no residue of residue(get divided among other shares)-if not intestate ii) A’s gift lapsed-is A in protected class-covered by statute-D/E stand for A-get ¼ each iii) If A is friend(not in protected class)-if abrogated-goes to C-if didn’t-intestate iv) Leave all my property to A, B and C who survive me(or to share and share alike) (1) If this or living=Words of survivorship-G H and I get nada d) UPC 2-603-If I say leave my property to my son A if A survives me and doesn’t survive me, A’s share goes to A’s issue(if he survives me just gets ignored!!)(crazy?) i) So we think anti-lapse is what people want-if don’t survive you-want to go to kids e) Attorneys put no anti-lapse statutes shall apply-5) Note 396-I leave property to A, if he doesn’t survive me to B, if B doesn’t survive me to residuary-I leave A, B and C who share or share alike and if none survive to their issue-clear! 6) Jackson v Schutlzaa Facts: T leave entire estate to W and heirs and assigns forever-he has no children-lapsed gift in residuary-goes by intestate unless anti-lapse statute applies but W isn’t descendant of him, his parents or grandparents— b) To A his his heirs and assigns forever=fee simple i) To A=words of purchase identifying who are takers ii) Heirs and assigns=words of limitations so means FS(or could be for life=life estate) c) Ct-subistituted and and or-Leave to W or to her heirs and assigns foreverii Didn’t survive me, so goes to heirs-friendly suit b/c involved proeprt that step-kids thought they got-purchaser v kids-ct will order you to give ot to me-so sue☺ 7) Class Giftaa IF T leaves all property to children-some predecease me-remaining children split money i) Qeustion what is a class?-functional conclusion-so those that survive get e/t b) Rest 3rd-shouldn’t identify by name and number should fluctuate for class-too formalistic c) Dawson v Yucas i) Facts: T inherits 1/5 interest in H’s farm-in will-believing as I it should go back to my H’s family-I give ½ to nephew and ½ to nephew but residuary(nada to H’s side) (1) One of nephews predeceases Steward leaving issue—law we have a lapse ii) Ct: not a class-when number of beneficiaries and shares they get is certain-not class! (1) Gene and Stewart weren’t only nephews so hard to find a class-(2) Created survivorship elsewhere so knew how to do it iii) Could go other way-b/c wanted it to go to H’s side(not sufficient that in will) (1) Sullivan v Sullivan-I leave to nephews and niece(1/3 each)-class b/c T’s intent iv) If circumstances of particular case, that a reasonably person minded would have wanted it to be a class=class(rules can’t be only analysis) d) In Re Moss i) Facts: I leave my property to A and children of B-A predecease me-have lapse and if A isn’t in class then anti-lapse don’t applyiii All a class-so A takes individually-could be ambiguousiiii American Lw of Property-court figures out if it makes sense to make a class e) Which comes first class rules or anti-lapse rules? Anti-lapese i) I leave property to children A, B and C-A has two children D/E-A predeceases me (1) If class gift-B and C get it-NO-if you have lapsed gift of a class gift, their issue stand in their shoes as a member of class if anti-lapse statute applies (a) So D and E stand in A’s shoes-if B dies w/o issue-1/2 to C and ¼ to D and E b. Changes in Property After execution of Will 1) Specific devise(car, my 100 shares of GM stock) or general devise(100 shares of GM or $100) a) A specific bequest which is no longer in it adeems 2) If I leave $100K and I give R $100K-but ony have $80K--$40K gift of Bates pro rate 3) If give you $100K rest to R—Only have $100K you get $100K 4) Two theories of ademption a) Identity theory of ademption-if specifically devised item not in estate, gift=extinguished b) Intent theory of ademption-if specifically devised item is not in T’s estate, beneficiary may be entitled to cash value if beneficiary can show that’s what T would have wanted 5) Wasserman v Cohenaa Facts: in will-I leave 1214 Newton Street to Elaine-doesn’t own it at death-said should get new property but no-independent life property to sell -I give prop or cash equivalent b) Ademption by extinction-identity theory-if not in estate, gift is extinguished i) Adv: simple, probable intent(probably right) ii) But what if just burnt down(do you get insurance) or if paid hospital bills w/sale $ c) Seems wrong so can do two things: i) Make exceptions for clear cases(1969)-sales by conversion or ii) 2-606-you are entitled to cash in value of what you have sold or replacement property iii) 1997 UPC-you have to prove shouldn’t be ademption but presume gift’s extinguished 6) Aunt Fanny snuff bottles-Wagner get cash value-now assume adeemed-7) Stock splits-same ownership w/stock splits so get the more shares that T had 8) Satisfaction of General Pecuniary Bequests a) Leave $10K to son and divided among my children-then hand $10K to my son b) UPC-need writing to show satisfaction-T makes transfer to devisee after execute the will 9) Exoneration of Liens a) Does T want mortgage to be exonerated before deviesee gets it-or have him take it subject to mortgage?-now presume you didn’t want lien exonerated(just make it clear) 10) Abatement a) First residuary, then general and then specificii I leave $10K and rest to wife and I die w/$100K-you get $10K rest to my wife ii) IF worth $12K-you get $10K she gets $2K—if not there, then adeemed b) Should just do fractions instead and don’t leave large bequests to non-family members D. Limitations on the Power to Devise a. Marital Property System 1) Two types a) Separate property-each spouse earns own earnings-so can’t cut out non-earner from will b) Community property-every $ you earn is 50% H, 50% W but not property you inherit i) No forced share here-H or W can devise to a/o-perfect partnership of marriage 2) In SP state-need to protect spouse from disinheritance a) Partnership theory or b) Support theory-want spouse to take care of other one-b/c if not state will have to 3) Elective share-Support theory-get about 1/3(most states), partnership theory=50% a) Should we take into account length of marriage1990 UPC does! b) Should life estate satisfy wife’s share-no under partnership, yes under supportii Maj: don’t charge spouse w/LE-so maybe moving towards partnership c) If incompetent spouse-right to elective share?(partnership-half)-but no don’t allow 4) Size of elective share a) 1990-UPC-less than a year, 1-2 years, 15 or greater is 50%-sliding scale idea i) similar to community prop -usually at 15 yrs most is marital but outliers can opt out 5) Non-probate Transfer Problem a) Traditional elective share is over probate estate-then if want to disinherit can just buy lots of trusts-so maybe elective share should apply to nonprobate transfers i) If partnership)breach of deal)-support theory(minimum share)-b) Sullivan i) Facts: Sullivan makes trust-he is trustee and can take from trust-has right to as much of trust as he wants and right to revoke trust a/t he wants(w/paper or tell himself). Separated from Mary Sullivan(married though)-will says not providing for Maryiii S is trustee, beneficiary and right to income and revoke-but real trust b/c s/o who owes duties to s/o else(remainder beneficiary)-nobody is going to sue-but has right to iii) Such portion of estate(in statute)-is this part of estate-Yes b/c will substitute b/c can amend it at any time-inter vivos trust is like a will-property passed by will-choose bs iv) Analogy to divorce-court takes marital property and divides as they think-partnersihp theory-this is subject to equitable divorce and looks like will substitute-(1) Purpose of statute-things he would control at his deathvv But Here didn’t get to take and ruling is retrospective only-b/c bar relies on this so sets up trusts to get out of elective share-(1) Any trust you amend after this day or any trust set up after this day so in estate: (a) In: Revocable inter vivos test (b) What about irrevocable inter vivos trust-less control but then all would do irrevocable -so revocability shouldn’t matter, what about life ins, annuity c) Bongaards v Williamsii Facts: W’s mother had trust-funded by building H and W lived in-H writes rent checks to trust for living in building-W names beneficiary as her sis-sis gets $2.9M ii) He shouldn’t get property b/c created by third partyiiii What should be allowed in(Goodrich-same sex)-what should count?-approaches (1) Judicial case by case (2) Intent to defraud-if intent is to fraud widow’s share-doesn’t count-Sullivan (3) Illusory transfer-not a real transfer-tests are under nad over-inclusive-Sullivan (4) NY-9 things count-pension plans-things owed on death-find exception tell clients (5) DE-right of election=% of decedent’s gross estate as calculated for tax purposes (a) Tax authorities don’t care about probate or nonprobate-experts-keep changing (b) Good-taxing authority has right motives-IRS did it for us-easy to administer (6) 1990 UPC-complicated 1/3 of all might be easier (a) Step 1-determine elective share-precentage-2-202(1)(a)-sliding scale-CP-like (b) Step 2: Determine value of augmented estate-surviving spouse’s share gets included as well—includes most nonprobate(includes life insurance) (c) Step 3-determine elective share amount=augmented estate*elective share % (i) i.e. H and W-H has control of $100K-W has control of $1M-e/t counts 50%-don’t look at what W has -credit her w/having more than ½ (d) If insurance co, people will buy less insurance-won’t go where you want it (i) People don’t like probate-want survivors get immediately-so insurance cos went against 1990 UPC d) Elective share-can renounce will and take elective share-if gives you 1/3 of e/t that is $100K and under will you get $50K-entitled to $50K and you will get it i) If elective share>intestate share-you can have elective share (1) b/c elective share now includes nonprobate transfers, might be more than intestate share(share of probate estate w/o a will) ii) net estate or augmented estate=probate estate + nonprobate transfers we count 6) Incompetent Spouse a) Re Estate of Cross i) Facts: Caroll Cross left entire estate to son Ray Cross-Caroll’s wife Bula(Ray’s stepmoom was incompetent, in nursing home w/Alzheimer’s-if could elect, get whole estate-but couldn’t b/c in nursing home ii) Issue: Should court exercise substitute judgment and whether to elect for her or not? iii) What’s best for her financially-electing-more money good (1) Minority of state-more money do it-majority-look at facts and circumstances iv) Facts and circumstances-won’t recover-died during litigation, covered by Medicaid (1) If elect and give her money-goes to heirs and devisee-if don’t goes to Ray Cross v) Purpose of elective share-support(shouldn’t elect b/c dead) if partnership(should get) vi) Court: In order to preserve Medicaid eligibility, can’t not exercise whatever rights you may have to property, she she must elect to be eligible for Medicaid-so ct elects b) 1990 UPC-goes into custodial trust for incompetent spouse and so much as spouse needs go to incompetent spouse and remainder goes back to H’s heirs and devisees i) Explanation-assure part of share is for economic benefit of spouse but not spouse’s heirs and devisees(def support theory) 7) Non-spouses a) Cooper(majority) i) Cooper died and Ernest Chin is partner-elective share? No spouse means marriage law-don’t get elective share-b/c opposite sex partners unmarried-don’t get share ii) So if same sex partners can (1) Explicit K-contracts to make a will, contract most of inheritance benefit (2) VT-HI-CA and CT-recognized same sex inheritance and elective share 3. Waiver 1) Long term relationship don’t want to signal so don’t ask for pre-nup-but signal death a) Both divorce and T and E lawyers deal w/pre-nups-they are very common b/c think about death and children-so if want divorce from 1st marriage0cut deal in 2nd 2) In order to be enforceable-must have full and fair disclosure of other’s assets-as long as person you want K to be enforced against knew—shouldn’t have same lawyer 3) Re Estate of Garbadgeaa H had $2.5M-disclosed to W-told get own lawyer and read agreement-just signed b) Ct enforceable b/c if tell her to get a lawyer and give full disclosure, you’ll be okay 4) In Re Grieff a) Particularized and exception scrutiny must be given to prenuptial agreements, inasmuch as relationship b/t prospective spouses is by its nature permeated w/trust, conf, reliance i) W’s family should never given W $1M-put in trust-remainder to W’s childrens ii) Lesson-don’t give to W -give in trust-if by family member, won’t be in elective share Community Property 1) If have CP move to SP state, can’t convert to separate property(tax disadvantage) a) Widow’s election-if in cp state-only control half of property but don’t want spouse to have control over it so leave in trust to W provided she gives all her property to trust as well-remainder beneficiaries I get to choose-incentive for wife to transfer to trust i) Tax penalties of doing this-triggers complete gift though 2) Quasi-community property-H has $-W has 0-separate property-moves to CP state-protect W by deeming a lot of property as CP(if go CPSP-no problem b/c each already owns ½) c. Unintentional Disinheritance-execute will before you get married 1) Right of election solves this problem-elect against will so spouse gets their share a) But maybe b/c forced share is mandatory minimum-should get more-intestate share? i) community property state-right to election doesn’t protect people from unintentionally being left out b/c no election share-must have different policy 2) Estate of Shannon a) Facts: R executes will-leaves property to daughter-married Lila(lots $)-he dies-L wants $ b) If elective share under UPC, she would get nada b/c credit what she has c) If pretermitted spouse, most states give share unless goes to child from other marriage i) But CA-spouse who comes after will is executed takes unless omission is intentional; spouse is provided for by nonprobate transfers; or waiver d) So here she gets(if executed day after marriage-gets nada)-lesson-make waiver e) UPC-pretermitted spouse-gets certain % no matter how long married i) Under intestate gets all-do what ave decedent wants-don’t want to limit how much ii) Under elective share-what absolute minimum is—UPC approach 2.. Rights of Issue Omitted from the Will a. Protection from Intentional Omission 1. The Domestic approach 1) Arrangment: leaves all property to spouse-what if only one parent-child can’t support himself a) American rule-can disinherit child but not spouse b) LA-children of certain age can’t be disinherited unless get married and don’t tell parents c) England-spouse and other dependent children enttiteld to as would be reasonable in other circumstances of case for applicant to receive-standards based-rejects US lawii In Re Greiff (1) Facts: L abandons 1st W and daughter when she was 10-becomes de fact wife-two sons(hs dropouts) together-P abandoned daughter from 1st -looks at relative needs (2) Court says standard is must place itself in position of T and what he ought to have done in the circumstance-treat him as wise—gave her portion-(a) Maybe family maintenance is substitute for UI and duress 2) Three different trules a) English rule-more litigation-no forced share-this is mostly support theory b) American Rule-can eliminate children altogether c) LA-children are in unless one of exceptions b. Protection from Unintentional Omission 1) Want to correct mistake-Give child intestate share-leaves to child and child C is bornaa Take ½ from A and ½ from B and give to C 2) Azunce v Estate of Azunce a) 5/4/83-T executed will-trust for wife and children A, B and C-nada for child born laterexeccute codicil after Patricia is born-P says I want to take i) FL-child left out gets intestate share(UPC-gets same share as other child/# of kids) ii) Rest-we republish unless effect of doing so would be inconsistent w/T’s intentbb Bad Luck-Ps mom and adult siblings say she is pretermitted-but guardian ad litem for minor said no-most inflexible creature b/c if does consent can be liable maybe GAL should see that A and B said okay-but doesn’t want to litigate in future c) Bad judging-hands are tied need to republish-Rest says not if goes agisnt T’s intent i) Said same case reached same result-but other cases were about an omissionperterrmissio is for mistake-says can’t rectify mistake heredd Bad lawyering-original let lawyer write codicil-didn’t say what experts said i) So sue for malpractice who drafted codicil-2 approaches in states that abandon privity (1) Maj-I didn’t inherit, I should have can sue (2) Minority-if you aren’t in privity, will allow if in the will-so she has no standing (a) Ct says estate has standing but no damages e) What if under UPC-A gets $10K B gets $5K-C is pretermitted-break it up pro rata-$5K 3) Many of these statutes apply only to after-born children-but some to ones born b4 will a) Child born before date of execution takes pretermitted share unless intentional omissionbb NH-applies to prior and after-born and propr and after-born descendants of those children i) John’s child appears-question is whether John’s child is a pretermitted heir 4) In Re Estate of Laura-NH a) Facts: Disinherits Neil(grandchild and son Edward)-any person not named=pretermittedbrroa statute-refers to ppl born before and after will executed and down whole line(some=only applies to kids)—but couldn’t take b/c wasn’t a mistake-cut out father-so cut out line-pretermission statutes are to correct a mistake—this was no misake! 5) Estate of Trealor a) Facts: T has will named daughter as beneficiary and Eveln survived by 2 children-new will-deletes Evelyn-nada about A and P(grandkids)-but did mention father b) If statute only applied to children-no claim-if after-born children only-no claim i) NH-pretermitted b/c does mention father-entitled to a share b/c looked at whether T mistakenly excluded and said yes-if want to disinherit(say not unmindful of child A) ii) Should just say—I leave to my issues per stirpes Nonprobate Transfers 1. Revocable Trusts 1) Very flexible—good b/c can plan for incapacity, more passes through nonproabte, free market competitors to probate (shows might need less formality), transfers automatically, private! a) i.e.=life ins, pensions, bank accounts(brokerage + mutual funds) and inter vivos trust b) In all cases-say these are will substitutes-b/c can change beneficiary at any time 2) 3 questions-1) since look like and act like will, should they be valid dispute WA formalities? a) 2) do we apply subsidiary law of wills? (slayer rules, anti-lapse, simultaneous death) b) what does this tell us about probate 3) Revocable trust comes in two flavorsaa Deed of trust-third party Trustee-I give it to you pay me income for life-if I don’t revoke, to my children on death-evidentiary(okay) cautionary(have to go and do it) b) Declaration of trust-I am T-give myself as much P and I I want-at death, to my children 4) Farkus v Williams a) Facts: Farkus is vet-employee named Richard Willaims-F buys mutual fund stock-took it out as trustee for Willaims-F has rights to all cash dividends-right to sell/deal and upon sale-trust is terminated-can change beneficiary or revoke-Is this is a valid trust? b) To see if valid trust-need to see if beneficiary has some interest? i) If F revokes w/o trust co notice, breach of duty to Willaims—so has a duty ii) If you are trustee and only beneficiaryno trust! c) This is now law everywhere-revocable inter vivos trust is valid if some interest passes d) Groffman-takes substantial compliance-maybe Wills Act is too strong? e) UTC 603(a)-(12-14 sts)-while trust is revocable and settlor is alive, beneficial rights no matter what the trust says are owed exclusively to the trustor-beneficiary has no right! i) Sees reality-revocable trust is a will b/c B won’t bring action b/c S will revoke (1) Just like trust, beneficiaries have no rights until settlor is dead f) Revocable trust-on my death to my children-trutsee embezzles money-I die-children have no right but estate does-603(a)-no right to embezzlement except via estate 5) Darcy-millions of dollars on how to avoid probate-passes instantly when you die-wills now(except NY)-wills are 2-3 pages-gives definitions—then leave to preexisting revocable trust that settlor will keep amending— 6) In Re Estate and Trust of Pilafas a) Facts-Steve P executes revocable trust w/him as trustee-transferred mortgage and property into trust-at death-goes to 8 charities, wife, and daughter-expressly omits 3 kidsriigh to revoke w/writing. 1987-executes will pouring over all property into his will-dies in 88-omittes son James can’t find will or original trust so petitions for intestacybb Will was revoked b/c testator last to have him-rebuttable presumption of revocation c) No presumption that he revoked the trust b/c needed to write not do an act d) Problem: P executes will which revokes inter vivos trust and will is found among papers-when he executes will, revoked at time of execution-if he is in possession of will then writing may be sufficient(but if w/northern co as trustee-then it’s not revoked) i) Estate of Lowry-was trustee-said can revoke by writing-so wrote in will-ct: revoked b/c in possession e) if in front of nuns said don’t want will or trust and ripped it up-will revoked-trust not! f) What if says this trust may be revoked by me by written instrument to trustee(no “only”)-i) Bataroff-no revocation of the trust nor the will-didn’t adopt code til later! 7) Rest 3rd and UTC-unless trust instrument provides to contrary, any revocatory act is valid provided there is clear and convincing evidence testator intended to revoke-15 states adopted a) Baratoff-clear and convincing evidence as long as doesn’t say exclusive 8) State Street Bank and Trust v Reiser a) Facts: Decedent creates revocable trust for his own benefit and puts property in it-and then bank stupidly loans him $75K w/o checking title(unsecured loans)-then he dies-not enough $ in probate to pay off bank-in probategoes to creditors-nonprobate transfers though the remainder beneficiary automatically get it-bank wants to reach nonprobate b) Ct: allow creditors to recover against this to extent probate estate is insufficient i) When alive, can’t put property in trust to avoid creditors-don’t want to screw them ii) This is also symmetrical w/tax rules-estate tax-revocable trust=taxable just like property under will-UTC and Rest 3rd adopt this c) So apply subsidiary law of wills here but not for revocation-depends on policy/purpose 9) Pour over Wills-will pours over into trustaa If write pour over will and trust already exists-part of will by incorporation by reference b) UTATA(and 2-511)-trust doesn’t have to be funded-just standby trust-most states have i) Create will w/catchall provision-pension funds-can unify e/t-10) Clymer v Mayo a) Facts: Claro executes will w/James as major beneficiary-then made him beneficiary of LI and pension plans-executes will and trust(James=main b) will leaves all to trust. James is remainder beneficiary under terms of trust-got divorced-chagned beneficiary of LI but not pension funds-he waived his right to e/t-Clara dies and all pours over into trust where James is beneficiary-parents are saying he shouldn’t get it b) Parents: argument 1-trust is invalid b/c no property in it at that time-UTATA though! c) Arg 2-Mass statute revokes will bequest upon divorce-court applies it here i) Divorce settlement-waived all rights-not explicit enough to reach benefits under trust d) Court got over fact that this was not a will b/c use nonprobate instruments to avaoid probate not to avoid subsidiary laws-so presumptively correct for probate and nonprobate e) UPC-revocation by divorce-so apply revocation by divorce but not by physical act 11) Revocable trust and Estate Planning a) e/o does these-I leave e/t to my trust created on X date-use UTATA b/c easier to update testamentary plan(can say I could amend a/t by written agreement to me), privacy, avoid dealays(make trust beneficiary on P.O.D. and all property), get to choose which st laws apply(so 21 st abolished RAP so pereptual trust-avoid taxes-so create IL trust) b) But can’t avoid estate tax by using a revocable trust b/c property you have control over is considered part of gross estate for federal estate tax purposes i) One ex)-if LI if s/o else owns it-it’s their asset so not in your estate 2. Payable-On-Death Contracts: UPC 1) w/exception of LI-POD-s/t that provides on your death-makes payment on your account a) on my death pay e/t that’s in my account to this named person-cts don’t like b/c avoids wills-seems like will though b/c beneficiary—seems to be revocable can change-a/t 2) is this valid in spite of testamentary formalities? a) Good evidence—yes b/c neutral third party involved w/brokerage acct or mutual fund b) If thought it wouldn’t work and they’d get sued—they wouldn’t do it! c) Always have been able to do LI w/o Wills Act formalitiesii Maybe ritual function is only purpose-get payouts immed.-ensure against dying earlyiii Brokerage-here is some money and signature on my form d) Gov-federal law-when you buy Gov. bond can name a death beneficiaryee Almost all states-statutes validate P.O.D. on almost all brokerage accts and mutual funds i) If name trustee of revocable trustproperty of brokerage acct goes out of probate! 3) Life Insurance a) Term-life-vanishes after 20 yrs but much cheaper-unlikely you will die-better than no LI b) Whole life-lasts forever much more expensive-1/1 odd of pay out; if young-savings acct c) Cook v Equitable Life Assurance Society i) Facts: Douglas named Doris(W) as beneficiary of LI policy-got divorced but decree doesn’t say a/t about LI(should have put in there)-D pays premium and converts it to whole life-Doug marries Margaret have son Daniel-1975-Dough makes holographic will bequeathing insurance policy and other property to Margeret and Daniel. LI policy=can change beneficiary by written notice to us ii) CT: Doris first wife is entitled to LI policy b/c want to get cash to beneficiaries immediately and LI company wants some certainty(don’t want to worry if changed b) iii) Some states statutes-revocation by divorce on LI(show divorce decree and death cert.) d) Superwill(aka Blockbuster will)-WA-in will-all nonprobate transfers goes to Xsuperrsede all other designations -makes it easier for person making will(esp if transfers unknown) but delay probate 4) Pension Accounts-good now b/c people live longer and assets are main wealth a) a/o w/job affected by these rules-fed law created incentives to create pension plansii instead of paying all of your salary-put some in pension funds and don’t pay the income in that fund-earn interest on extra $3K until retire-income tax as it comes out ii) Works today b/c people live longer and b) Now many die w/money left in pension funds-passes to person named in pension funds c) Under federal law, must name spouse but if not married can go to anyone! d) Egelhoff v Egelhoffii Facts: Donna and David E got divorced-divide property(detailed)-At Boeing, Dave gets co pension plan but failed after divorce to change designation under LI or PP-has intestate heirs(Sam and JR-kids from previous marriage)-ii) St statute-applies to all nonprobate assets-revocation on divorce applies to all of these iii) Does ERISA preempt state statute iv) Test under this case=Relation 2 prong test (1) Does state statute have forbidden connection? (a) Applies to all nonprobate-reaches ERISA pension plans which is forbidden (2) Does such connection undermine objectives of ERISA? (a) Want administer to make payouts w/o having to worry-don’t want diff st laws (b) Then have to figure out which law to apply alsovv Court-well what about slayer rules-wouldn’t they be preempted? Ct: long history vi) What about simultaneous death statutes?-some say 120 hours some say some evidence—as practical matter, Egelhoff blows off all subsidiary laws in pension plans vii) Breyer-how is this different than slayer rules which vary-maybe ERISA change rules e) Metropolitan Life v Johnson-s/o checked wrong box-tried to change beneficiary i) IL-substantial compliance-ERISA preempts-use fed. common law=substantial comp. f) Slayer ruleskilled wife-ERISA preempts-federal common law-slayer rules☺ g) TX SC-said ERISA preempts-but still can’t pay out LI to divorced spouse-challenge to E! 5) Brokerage and Bank Accounts a) Both can withdraw money b/c my dad wants to help me out-or maybe b/c can’t go to bank so wants you to go and withrdraw, or maybe wants to avoid probate i) If in state that doesn’t allow P.O.D. can’t avoid probate this way b) How can you tell difference b/t if meant for both parties money and agency account? i) Agency account-money should go through probate ii) Problem-banks always give you joint account form b/c easy-so get litigation! c) Franklin v Anna National Bank of Anna i) Facts: Sis in law moves in to help W-says joint tenancy-signed in both names-sends letter to bank make it b/t me and Enola but still says b/t Goddard and Frank ii) Agency account-so should go to estate-but other states so no joint tenants 6) Joint Tenancies in Realty a) When you die if you are JT-your property vanishes-other takes immediatelyyou’re your creditors have no rights against property-so common for spouses b) Imperfect will substitute b/c both JTs need to sign to do a/t and in willretain dominion D. Planning for Incapacity 1) Revocable trusts are helpful b/c successor trustee can take over if you become incompetent or power of attorney-also talk about it b/c T and E is where people go-2) Power of attorney v Durable power of attorney a) Under common law of agency, death or incompetence terminates relationshipo b) Durable power of attorney-name agent that can act even after you are incompetent i) Apply duty of obedience, duty of fiduciary obligationcc Issues: i) What is scope of agent’s authority? Give agent power to do anything ii) Has the agent breached fiduciary obligation?-so that limits it-lots of litigation whether can use power of attorney to revoke a revocable trust-common law of agency mainly 3) Franzen v Norwest Bankaa Facts: Franzen-northwest bank for himself then to W-W can terminate or continue-says to continue trust for my lifetime-brother moves in moves her to nursing home and said send me property I revoke under power of attorney b) Common law-didn’t have to specificialy mention power to revoke revocable trust i) CO statute-said you did but it didn’t apply c) Need specific authorization to make gifts or to revoke revocable states-most states i) Use statutory form-gives power to do everything and regulate w/fiduciary obligation d) What if incompetent I made specific bequests to A and residuary to B-B liquidates item of A’s specific bequest(close to self-dealing and is COI)-fiduciary litigation e) Under Wills Act, probably can’t revoke or execute a will under power of attny(even if statute says can do a/t)-but can enter into K obligating you to make a will f) When use power of attorney=attorney in fact-doesn’t have to be an attorney i) Gives you evidence as agent and solves durability(doesn’t terminate on death) g) How far can you go w/power of attorneys? States list it-pay taxes, make gift i) Gifts-can give $11K each year tax free-should take money out of estateiii Revocable trust-can revoke even if not specified-probably can’t write new will 4) Other ways to plan for incapacity besides durable power of attorney a) Advance directive-what you would want to happen-If X happens, I want Y i) Problems: Doesn’t cover every possibility, hard to know how you’ll feel at timeiii Medical directive gives list and info b) Proxy-delegate this power to s/o else who you trust to make this decision c) Hybrid-name as agent and give prefatory guidance-adv. has guidance i) If doesn’t have advance directive or proxy default rules as to who makes decision (1) If not spouse, then children-bothersome that same way it goes intestate? 5) Bush v Schiavo a) Facts: T and M married in 1984-happy one?-collapsed into comma-bulimia(malpractice against Drs should have known)-no advance directive-Michael is appointed guardian to make decisions(if no guardianspouse makes decision a/w)-98-M =no more life-support b) PH: TC-permanent vegetative state would want it off-COA affirmed-SC denied review c) 6 days later-statute allows Gov. to issue water and food to rehydration when court found they are in vegetative state and family members challenges w/holding nutrition d) Issue? Does statute violate separation of power under FL state constitution? i) On the face-nondelegation-C says leg power shall be vested in HOR and Senate (1) Gov can’t decide whether or not to stay in any particular case ii) As applied-reversing court decision-so unC on face and as applied e) Conflict-spouse moved on and has life w/s/o else so conflict f) If advance directive that said M can make a decision-parents couldn’t complain 6) James Lindgren-typical person doesn’t want to stay in vegetative state so make default rule death b/c 75-83% want death-they are uncomfy and akward the current T and E practice 7) Disposition of Body-default rule-don’t harvest organs from decedent unless opt to do it a) Very low % in US and very high e/w-so people don’t have strong way either waybb Fed law-in order for Hos to be eligible for fed. Fundingpressure ppl for organ donation V. Trusts 2. Creation of trusts 1) Wanted to fracture ownership of property-monks weren’t allowed to own property-so gave it to them as trustee-manage property best way possible-bs can sue for breach of trust 2) We focus on trust for donative purposes—but also can be used w/mutual funds 3) Trust was used as business orginazation b/c separates trust and control but don’t have to file w/state so didn’t have to do corporate regulations-that is Anti-trust-breaks up property 4) In donative trust(unlike corp)-can’t get out of your share and hard to fire trustee, so lot of fiduciary obligaiton 5) Historically-1st Rest-not cite-2nd Rest-good 3rd-UTC-different committee-easy and good-14 st just codifies common law-Scotts Treatise-being updated-Bogart(particular states)-less cites 6) Settlor-sometimes called trustor is donor a) 2 types of trustii Inter vivos trust-Farkas (1) Declaration of trust-I am T—as long as some other beneficiaryvalid (a) Merger rule-if Trustee is also only beneficiary-not valid trust (2) Deed of trust-write up instrument give it to X and he accepts-he is T (a) Most nonprobate-settlor is also trustee-now most settlor isn’t trusteeiii Testamentary Trust-trust you create in your will so trust instrument is your will (1) Has to be in writing b/c of wills act (2) Trust will not fail for lack of trustee-court will name one(Lux case) (3) Trustee owes fiduciary obligations to other beneficiaries-loyalty and prudence 7) Trustee-can have as many as you want a) Institutional trustee-competence, wouldn’t lie(or steal) but doesn’t know much about family and also have to do their fee schedule b) So ask Aunt, bro or sis-have familiarity but less expertise c) In choosing trusteemight only say trustee until X age, can opt out of default rule! d) Langbein-captured it in three pieces i) Investment function, admin function(pay taxes), distribution function(give $ to bs) 8) Beneficiariesaa 3rd party beneficiary-C can sue A if A is supposed to do s/t for C but K was b/t A/B i) But not like third party b/c equitable right to chase property b/c A’s creditors got nada b) Manager of corporation and debt is in supplier-can’t go after corp—same w/trustee’s creditors-can fire trustee if doesn’t fill fiduciarycc Nobody does legal interest in property(life estate, equitable remainder)-do it in trust though-trustee for X for life and goes to H when X dies-legal ownership as trustee i) England abolished legal interests replaced them w/equitable interests ii) Securitizations—mutual funds and pension plans=trusts 1. Intent to Create Trust 1) Test is whether manifests an intention to create a trust? No need to use word trust just need to describe features of trust-give this property for the use and benefit of 3rd person=trust 2) Lux v Luxaa Facts: Lu writes will bequeathing to grandkids property-said shall be maintained for benefit of them and not sold until 21-express desire to seell to another part of family? b) Ct: for the benefit of grandchildren-shall be maintained until 21-so trust c) No trusteeif testamentary trust that names an executor make sense to name him as T b/c know settlor thinks person is responsible b/c fiduciary to estate so why not to trust d) Precatory language -leave it w/hope she’ll use it towards trust or recommendation i) Precatory trust-not really a trust—just a wish (1) Colton v Colton-devise entire estate to W and recommend her to care for mother and sis-must look at language and context(lots of litigation)-T intended trust here (a) SO BE CLEAR-I hope but do not legally require OR I give it to you in trust 3) Jiminez v Lee a) Facts: grandma and client shortly after Betsy was born bought bonds to father-saying for B’s eduction-dad deposits in savings account and cashes bonds and puts in account where he is custodian(uses for ballet dances)-daughter brings suit demanding accounting of assets in her trust-if trust(allows to accounting) if not(doesn’t get an accounting) b) Had trust b/c grandma wanted them to be treated equally for educational needs-also dad acknowledged that he held property in trust! i) Entitled to bunch of duties-can impose constructive trust c) Might not want to sue dad b/c it’s dad, expensive to get lawyer, judgment proof 4) Gift-transfer of fee simple a) Trust is gift over time-make gifts in accordance w/terms-overlap of declaration of trust and failed gift b) For completed gift-have to have donative intent and delivery of property i) If donative intent and not delivery can we save it by saying a trust? 5) Hebrew U Assoc. v Nyeaa Facts: Ethel and W have books and maniscrupts-says want to give it to Hebrew U-on Prof’s death-Ethel goes to Isreal-large luncheon—tells people it belongs to university but she dies before books are shippedbb Argue it’s a gift-donative intent okay b/c good evidence of ceremony-but need delivery c) Argue it’s a trustii On my death to Hebrew University-don’t have manifest of intent to impose enforceable duties of the trustee-e/t she’s acting like she’s not absolute owner but didn’t make accountings—Scott -can’t torture gifts into trust 6) Hebrew U v Nye a) Better lawyers—university says completed gift b/c constructive or symbolic delivery i) Constructive delivery-gives donee means of obtaining the property such as a key ii) Symbolic delivery-give them a symbol-such as a writing(case here) (1) Symbolic b/c signed memorandum that detailed gift + luncheon announcement b) In gifts-know serious b/c pain of parting w/property-in constructive: at least seriously thinking giving it up-might think of this as substantial compliance giftcc 3rd Rest of property-gift or personal property can be on intent alone if clear and convincing evidence-so like substantial compliance (Rest 3rd property-goes both ways) d) In end-need intent and delivery-if no constructive or symbolic-argue declaration of trust i) Rather than pigeonholing may only need intent?? 2.Trust Property(The Res) 1) Upthank v Rippstein a) Must have trust property(res)-specified property or money-or house is trust property b) Facts: Craft wrote letter to Rippstein-will send her $200/month for 5 years and I hereby bind my estate to make these payments c) R would say it’s a willnot valid holographic will-no present testamentary intent says court but Prof doesn’t get it-seems like straightforward holographic will! d) Can say created a trust-ct says no! i) Do we have intent to create a trust? Sure wants to make these payments ii) If so, do we have specified trust property? (1) If said bind my estate to take $30K out and pay you $200/mo-that’s specified (2) Why not take out of entire estateif didn’t intend to tie up everything he owns, then no trust property-and might not have meant to impose upon s/o to manage (3) Why not set aside 10% of estate b/c he didn’t identify it-he identified his entire estate but we don’t have intent over that-2) 2 doctrinal distinctions a) Resulting trust-take 10% and put aside as trust and remainder to beneficiaries on resulting trust(reversion in equity)—gives property and on death to descendants(has none)-if instead say to G in trust for K’s life-property results to me on trust b) Trust v debt-usually not a problem in real world i) Trust has specifically identified property where debt-—can do whatever you want w/loan but w/trust must do what’s in best interest for trust 3. The Beneficiary Principal-1) In order to have a trust, must have ascertainable beneficiaries in order to be able to sue you for fiduciary-guardian can look out for minors interests-2) Clark v Campbellaa Facts: Testamentary instrument-I give and bequeath to my trustees to make disposal to such of my friends as they shall select b) 3 things needed-intent(clear), property(specified) and beneficiaries(unsure) c) not sure who has standing to sue—if said cousins—easy to see who is cuz(but 1st or 2nd) d) To my relations-courts has said that is fine-but friends does not work e) Black Letter-must be beneficiary or class of ben that can come into court and claim beneficiary of trustfriend is broad and varied and no limitation fixed by boundaries f) Trustees—he only meant for us to choose-people might not have standing to argue— g) If give discretionary power that’s ok unless they are trustee b/c T have to have fiduciary duty to someone-b/c this shows clarity to third parties 3) Marilyn Monroe Will-give clothing to Strousberg-being he distributes to my friends and colleagues as he may choose---is this trust or outright bequest? a) (1) intent-no (2) property-specified (3)-beneficiaries-no b) So S took property and did not give it to various other people 4) In Re Searight’s Estateaa Facts: I give and bequeath my dog Trixie to Florence Hand and ask my executor to deposit $1K to pay F $.75/day forcare b) If Trixie were child-valid trust w/guardian ad litem(intent, property, beneficiary(child)) c) Dog as beneficiary: like baby can’t speak so no litigation-no legal standing d) Rule against perpetuities-no gift is valid if it will not vest or fail w/in e/o’s life or 21 yrs i) Can the dog outlive people by 21 years—yes-but ct says valid anyway-b/c court looks at what’s likely to happen(but dog was already dead so knew-not what supposed to do)-you don’t wait and seeee Trust for benefit of a dog-dogs have no standing-but court uses honorary trust-gets the property and has to use the dog—if doesn’t use it on dog-goes to resulting trust i) Asked on your honor to care for dog and if not those in resulting trust can sue f) Same thing if I give you money to take care of my grave-noncharitable purpose trust i) For purpose designated-if willing-then bequest is not unlawful g) Restriction: Can’t be for capricious purpose(i.e. make really ugly monument) i) Also-can’t give $6M to take care of my dog-seems caprcious Rest-hard to draw line b/t capricious and not capricious-not capricious unless unreasonably large h) Other approach-15-18 st. statutes-allow noncharitable purpose trusts for dogs, graves i) Purpose trust is valid for animal provided animal was vertebrate i) UPC and UTC-intended use of trust can be enforced by individual designated in trust or by person appointed by court-seems to treat children and dog same but eventually child will check w/guardian(when older)-but problem w/purpose trust is s/o other than purpose has to look at this j) Point-must have beneficiary to call T into account-if want trust for a purpose-so purpose trust is okay if you have honorary trust or statutes(in some jurisdictions-18 states) k) Limits on honrary trust i) Rule against perpetuities-if chance won’t end before-should be valid(case is odd) (1) Purpose trusts by statute-put a time limit on trust-life of domestic ii) Monetary limitcapricious to put in far more $ or build too big monument 4. Necessity of a Written Instrument 1) Declaration of trust(you as T) or deed of trust-SOF-if deal w/land need a writing 2) Testamentary trust-wills act has to be in writing-s/t enforce oral inter vivos of trusts and also s/t enforce oral trust for disposition of property at death 3) Hieble v Hieble a) Facts: P transferred property to children-deed evidenced outright transfer but promised temporary recovered from cancel-son and daughter lived w/mom-daughter got marriedmmo unhappy so wanted her to transfer property back-she did-then asked son to transfer back-but he refused tomom sues son b/c said you would convey property back b) No proof and SOF requires a writing so can’t enforce it at law c) Confidential relationship-not dealing at arm’s length i) In order to trigger constructive trust, must be unjust enrichment(had cancer, unsmart) ii) Standard result in confidential relationship-made transfer for legitmate reason (1) But if mom was getting divorced or b/c creditors—not unclean hands-Pappas iii) Constructive trust isn’t a trust just a remedy not sure why its here 4) Ollife v Wells-oral trusts for disposition at death a) Facts: Ellen conveys estate to minister-to distribute as best calculated in his discretion-is this bequest to him as trustee or outright bequest-Wells is dead-mission burned b) If outright bequest-wishes won’t be carried out-so court says he is trustee b/c actual beneficiaries named(said to him to charity)—problem is we don’t know beneficiaries i) So goes to donor’s heirs or successor if this is trustee c) This is semi-secret trust b/c we know it’s a trust just don’t know beneficiaries i) Secret trust-I leave my property to Revered Wells-promise by Wells to Ellen to use for Mission would be enforceable by constructive trust imposed on Wells ii) Secret trusts enforceable but semi-secret are not==less likely for fraud but no evidence of trust-but cot answer-we have to admit EE to solve unjust enrichment (1) If no trust—would go to devisee; for semi-secret-don’t need to look at EE to know that this person shouldn’t get the property(second-best in both cases b/c person doesn’t get the property!) iii) English enforces both secret and semi-secret(but should comply w/Wills Act)-lots of litigation and not creating new wealth-(1) If K right-creating new will but also courts of equity iv) US enforces semi-but not secret, England + Rest 3rd(min) both, enforce none C. Rights of beneficiaries to Distributions from the Trust 1) Mandatory trust-trustee must distribute all income-T lacks all discretion a) Good b/c have total control(no litigation) but things change so need T to have discretion 2) Discretionary trust-pure discretionary trust(rest of them reduce litigation b/c grounding) a) Spray trust-O transfers property to x in trust to distribute all income to 1 or more members of group of A, A’s spouse and A’s kids in such amounts as T distributes i) T must distribute all income currently but discretion over who gets and what amt. If wanted, T could be given discretionary power to accumulate I and add it to principal b) Support trust-T’s discretion may be limited by ascertainable support standard(such amounts necessary to support my kids in the living to which they are accustomed) OR c) Discretionary support trust-combines explict statement of discretion w/stated support( such amts as T shall, in his uncontrolled discretion, deem necessary)-i.e. for my health, education and welfare-and to maintain style of life to which W has become accustomed 3) Marsnam v Nasca-T has a duty to inquire if this is a discretionary support trust a) Facts: M leaves 1/3 in trust to Cappy-remainder to Sally-be paid w/reasonable supportss much of P and I in sole discretion as they deem advisable for his comfortable support (discretionary support trust)-this will takes into account other resources-$2/5K/yr had $60K-had house-TBE went to C. C marries Margaret(drafted by lawyer-calls F I need $-bad finances so Sally and H bought house as TBE(deed drafted by Farr)-said M wouldn’t be allowed to stay in the house-so C dies-then S dies-and S’s H kicks out M; M sues F! b) No prob b/c in will but if not in will-then i) Scott-rebuttable presumption=settlor wanted b to benefit irrespective of other assets i ii) BUT: Rest 3rd 50 cmt e-presumption is to take Bs other resources into account to determine distributions except in T’s discretionary judgments, S’s intent will be better accomplished by not doing so-so no presumption(fact dependent)-lots of litigation c) Breach of trust-after looking at other resources-T shall if deem necessary in sole discretion for his comfy support and maintenance(not losing house is comfy support) i) Lifestyle-C not getting what we need-Farr says absolute discretion-2 problems (1) Can we take it seriously in general-Hall-can’t remove power to review no matter how strong-does it mean review for only bad faith, is it subjective-(2) Esp if he is lawyer (3) UTC 814-if absolute, sole or uncontrolled-shall exercise discretion power in good faith and in accordance w/terms and purpose of trust and interest of beneficiaries (4) Rest 3rd(better)-words such as absolute or sole not interpreted literally ii) Next argument-I gave him $300 and told him to write if more (1) Not all trustees need to inquire but here must take into account what is in comfy support and maintenance-so implies a duty to investigate d) Remedy i) TC-took house from S’s H(Richard)-gave it to Margeret-no constructive trust ii) Can give M money b/c C should have gotten more money from trust-how much? (1) Property that should have been dispersed certainly can get out of trust-easy (2) If not enough $ in trust, must trustee reimburse beneficiary for what should have been reimbursed-only can recover against T for willful neglect(not here-reckless) (a) But Trustee wrote that clause and may not be enforceable (i) If indemnify won’t enforce-but will enforce if says only for gross neg. (ii) Black letter law-enforce exculpatory clause unless trying to cover intentional and willful neglect, bad faith-1. always include duty of loyalty(stole it) or bad faith (b) SO if sis is T-limit it to gross negligence-b/c doing you a favor (i) But professional trustees are held to higher standard of care iii) Here, willful neglect is okay they say!-but did Sarah knowa bout it (1) UTC-drafstmen must show it was adequately disclosed(better they have info) (2) Here(Rest 2nd and older cases)-put burden on challenger(M) to show e) remanded to see how much would have been paid out to C-but no personal liability for F f) Rutanen v Ballard-ct refused to enforce exculpatory claus b/c T didn’t adequately advise Settlor-so now in Mass burden is on lawyer to show that it was disclosed i) Comment-to overcome presumption, T must establish its fair, its existence were adequately disclosed, invidual device, sophistication of settlor, scope of clause (1) Factors: Good witnesses and have them sign s/t additional ii) UTC 1008-satisfied if represented by independent council(but here T=lawyer) 4) Mandatory Arbitration Clauses-can’t sue in court instead must litigate it in arbitration a) Not enforceable b/c essential to trust to have judicial review b/c that’s enforcement mechanism-says AZ case-but we might still have enforcement-may be changed D. Rights of Beneficiary’s Creditors 1) Asset protection-instead of reforming tort or bankruptcy-get this 3 styles: a) Discretionary trust-creditor can’t by judicial order compel T of discretionary trust to pay him-have no recourse against trust almost always-recognized in common law b) Spendthrift trusts—only US allows c) Self-settled asset protection trust-create for own benefit and creditors can’t reach it 1. Discretionary Trusts 1) Pure discretionary trust-give this property to X so much as he deems advisable-creditors have no right to stand in your shoes and sue X for payout a) Scott-Since you have no right to force a payout, creditors have no right either-but not true b/c can say abuse of trust so I need help here so traditional explanation is wrong b) But here-have no interest your creditors can take-right to sue for abuse of trust is personal and won’t sue for abuse if there is a creditor looming c) Cutting off income-many states-get order-look I can’t force you to make a payout but if you do decide to make a payout it goes to me-helpful b/c b isn’t getting so will cut a deal i) If give to S to pay out or sole discretion to pay to me or my children-can’t pay tuition or rent of kids if s/o cut off your income-2) Support trust-suppliers of necessity can go against support trust(but other creditors-no right) a) Many states-Spouse/children can recover from support trust but not against pure discret. b) Why is this different? UTC and Rest treat support and discretionary trusts the same but: i) Rest 3rd of Trusts 60-allows creditors to stand in b’s shoes and compel distribution so can recover against discretionary trust-NOT REALLY LAW ANYWHERE (1) But Cmt e-T’s refusal to make distribution might not be an abuse of discretion even if would be abuse if beneficiary sued b/c extent to which b might benefit is relevant to discretion of T—so this is fuzzy-lots of litigation(goes both ways) ii) UTC 504-Discretionary Trusts-other way then Rest (1) Except as stated in (c), whether or not trust has spendthrift provision, creditor of b may not compel distribution that is subject to T’s discretion if (a) Discretion is in form of standard or distribution(support trust) or (b) T has abused discretion (2) (c)-to extent T has not complied w/standard of distribution or abused discretion: (a) Distribution may be orded by ct to satisfy judgment or court order against B for support or maintenance of B’s child, spouse or former spouse (b) Ct shall direct T to pay child, spouse or ex-spouse such amount as is equitable under circumstances but < amt T would be required to distribute for benefit of b had T complied w/standard or not abused discretion iii) SO UTC-b’s creditors can’t reach-spouses and children stand in your shoes for both 3) Protective trust-mandatory payout that happens and once creditor tries to demand it(or moment you are insolvent)-becomes discretionary trust(creditors don’t need to reach it) but mandatory payout—common in England where there is no spendthrift 2. Spendthrift Trusts 1) Doesn’t allow voluntary or involuntary transfers-must have spendthrift language(except NY) a) Most major firms have it-b/c I know better what you need-2) Scheffel v Kruegeraa Facts: K’s grandma creates trust w/mandatory quarterly income to K and so much of P as Trustee desires(gets P when 4)-spendthrift language-sexually assaults S’s child-S brings tort suit-judmgnet of $500K trying to enforce against spendthrift trust b) If rich dad and alivecan’t take against dad i) But if dies youngshouldn’t be able to take either b/c same position just dead dad c) If wanted exception would have had it b/c two exceptions: if create it for own benefit or fraud so besides two exceptions creditors can’t reach spendthrift d) Said no more purpose b/c in jail-but NO might have purpose later on e) Seems like should be exception for tort creditors(can’t do HW) but there isn’t 3) Shelley v Shelley-standard case-spouse and kids can recover against spendthrift trust a) Facts: T’s will leaves residuary estate in spendthrift trust for son Grant-income to be paid to Grant for life-pay corpus when 30-in case of emergency can get earlier. Marries 2* divorced both-2 kids by each marriage-must pay child support and one alimony-he disappears so W and kids want to attach trust-bank interpleaded-what should happen? b) Grant’s interest in income wrt children-since policy warrants exceptions-kids can take against spendthrift c) W/spouses-policy not as strong but against income let spouse to recover as well d) Trust corpus?-T has discretion to pay out corpus to Grant i) Spouse can’t b/c no creditor can recover against discretionary trust(UTC-opposite) ii) Children-wouldn’t be able to but they are entitled to it in case of emergency (1) So ct says emergencyb/c need to eat—they are beneficiaries of corpus e) UTC 502-spendthrift provision is valid only if it restrains voluntary and involuntary transfer of b’s interests-makes sense b/c cuts away at protective justification(best arg.) i) So T is protecting beneficiary as donee-creditors can’t reach-and b can’t sell f) UTC 503-exceptions-children or spouses and Gov. to extent Gov has a claim i) No exception for tort creditors-maybe n/o lobbies for them but spouses and kids do ii) Plus might not be adopted if say tort creditors b/c trust lawyers would argue for it iii) One place noted exceptionf or tort creditors-lobby and changed law immediately g) Station in life-some states-creditors can recover against b’s trust in amount which goes above the need at station in life(what they are used to)-dumb b/c need entire trust!!! 4) Issues w/spendthrift trust-England doesn’t allow but allows protective=protect for 3rd party a) Can trump spendthrift w/federal tax lien b) all pension trusts under ERISA are spendthrift c) Bankruptcy code 541(c)(2)-inalienable interest under local law doesn’t fall into bankruptcy estate-if T could reach and give to creditors, spendthrift would have 0 value d) Your creditors can reach so much of trust that you created(traditional law)-but Cooke Islands and Bahamas-trust for your own benefit creditors can’t reachee Self-settled discretionary trust & some self-settled spendthrift(payout can be mandatory) 3. Self Settled Asset Protection Trusts 1) Cooke Islands-if don’t live here, you can have form of self-settled trusts creditors can’t reach a) We won’t enforce judgment from another court-2) AL-want to attract money to Alaska-self-settled asset protection trust will be ok only if Al trustee(but would do it a/w to ensure you get the law) also make sure there is money in there a) Now up to 7 states— b) $100B has moved b/c of RAP but ATP is too new know it’s used but not sure how much c) If in NY-DE won’t reach into trust if you run people over unless some of trust money is in NY b/c then NY court has jurisdiction d) Can say don’t have to respect DE law and against PP to uphold this 3) FTC v Affordable Media a) Facts:-telemarketing-Andersons said-invest $5K get $7500-they get $6M for sales-Ponzi scheme(pay off early buyers)-suit brought against them-put $ in ATP in Cooke Islandsthhe were the trustees-FTC asks ct to have them repriate assets-say they can’t b/c terms of trusts in event of duress(i.e. judicial order)-they are removed as trustees b) DC-i don’t believe that you can’t repatriate so I am throwing you in jail c) 9th Circuitii Court said its not impossible to comply-b/c they set up this trust (1) It’s like putting map on fire—can’t give it back-bought it on yourself (2) But no b/c it wasn’t a crime(like arson) to set up trust before there were creditors d) You have a high burden to show impossibility b/c of likelihood that would go astray i) So b/c you have control in trust protection clause and generalized suspicision of duress clause that they would lose control(hard to believe)-(1) Trust protector-has powers over trustee-can fire T-name ct or them as T (a) Tried to resign from trust protector-but can order repatriate (b) Wanted to be trust pr