1 WILLS AND TRUST Fall 1999 Wendel MAIN ISSUE OF CLASS: Who gets the decedent’s property when he or she dies? • Depends. Depends on the nature of the property at death. I) INTRODUCTORY TERMINOLOGY A) Nature of Property 1) Probate: Property that passes either by: (need to go through probate process in order to transfer title from decedent to new owner) a) Testate = decedent’s will, or b) Intestate = no will 2) Non-probate: Property passing under an instrument other than a will which became effective before death. Title transferred by one of four types of non-probate: a) Joint tenancy: right of survivorship for the other JT b) Possessary estates and future interests c) Intervivos trust d) Life Insurance (paid on death life insurance): Insurance proceeds of the policy are paid out to the named beneficiary upon companies receipt of a death certificate. 3) Determination: If not non-probate, then probate and vice versa B) Administration of Probate Estates 1) Personal representative: appointed at D’s death to oversee winding up of D’s affairs a) Principal duties: (I) Inventory and collect D’s assets (II) Manage assets during administration (III) Receive and pay collector and creditor claims (IV) Distribute remaining assets to those entitled to receive them b) Appointed by, under the control of, and accountable to probate court 2) Executor: if personal representative is named in the D’s will, that person is an executor. a) Executor must give bond unless bond is expressly waived in the will. 3) Administrator: if personal representative is not named in the D’s will, that person is appointed by the court and is an administrator. a) Bond cannot be waived in this scenario, so administrator must give bond. b) Administrator selected from: spouse, surviving kids, parents, siblings, creditors. C) Other Relevant Terminology 1) Testacy: dying with a will a) Testator devises real property to devisees 2 b) Testator bequeaths personal property legatees c) Modernly, language is interchangeable 2) Intestacy: dying without a will: “Heirs” is the technical definition for those who take under the intestacy scheme. a) Real property descends to heirs: Distribution is controlled by laws of the state where the property is located. b) Personal property is distributed to next of kin: Distribution is controlled by the laws of the state where the decedent lived. c) Modernly, heirs = those people designated to take under the intestacy statute 3) Marital Property Schemes a) Community Property: H and W own all acquisitions from earnings obtained after marriage equally. Sharing of assets obtained with earnings (and earnings themselves) acquired after marriage. (I) Each spouse already owns ½ of the qualified assets, and upon death of one of the spouses, that spouse can devise their ½ to whoever he or she wants to. If the decedent spouse doesn’t devise the ½, it goes to the surviving spouse. (II) Property acquired by gift, descent, or devise is the acquiring spouses’ SP; even if acquired by the foregoing after marriage (III) Any property brought into the marriage by the spouses is still their own SP (IV) CP refers to only such property acquired by earnings made during the marriage. CP IS PROBATE PROPERTY. b) Separate Property: H and W own separately all that they attain. No sharing. (I) SP states give the surviving spouse by statute an elected or forced share of the deceased spouses’ property c) Quasi-Community Property: If married couple enters into CA with property acquired with earnings obtained after they were married but while still living in a non-CP state, California will treat it as CP if it would have been CP if at the time it was acquired, the couple was living in CA. II) INTESTACY: AN ESTATE PLAN BY OPERATION OF LAW A) Property Subject to Intestacy Provisions: Any part of the estate of Decedent not effectively disposed of by will passes to D’s heirs as described below (CPC §6400) 1) Who takes? a) Depends on whether asset is probate or non-probate. If probate, have to determine if testate or intestate. If there is a will, that controls. If there is no will, then instate succession statute kick in. B) Intestate Succession: 1) Order of Takers: §6402 a) Surviving Spouse b) Issue/Children 3 c) Parents d) Issues of Parents: siblings e) Grandparents/issue of grandparents (one or the other takes it; they don’t share it; if no grandparents to issue of grandparents but not to both) f) Issues of Predeceased Spouse g) Next of Kin h) Parents of Predeceased Spouse or the Issue of such Parents (don’t share it; only one takes) i) Echeats to the state: If none of the above people are alive, the property goes to the state. 2) Surviving Spouse: §6401: Depends first on where CP or SP, and then on number of kids, issues, or if living parents, etc. a) Community Property: SS gets all 100%: dead spouses’ ½ and living spouses’ ½. (If there was a will, this may not happen b/c deceased could devise the ½ to anyone, not necessarily the SS.) (I) Decedent’s half would go into probate but then be distributed to SS b/c no will. (II) Same with the quasi-CP. b) Separate Property: Depends: (I) SS takes 100% of SP if Decedent has no live kids, no dead kids survived by issue, no live parents, and no issue of parents. (There cannot be any of them.) (II) SS takes 50% of SP if Decedent has (A) only one child alive or one dead child survived by issue OR (B) parents or issue of parents (III) SS takes 1/3 of SP if Decedent leaves more than one child including dead kids survived by issues. (A) Example: H and W have four kids. 1 has a child. 1-3 are dead, and 4 is alive. H dies. W gets 1/3 b/c more than one child alive: 4 is alive and count 1 as alive b/c dead but survived by issue. c) CA does not recognize common law marriages, so if just living together, no inheritance rights. d) Simultaneous Death: Survivorship requirements: (survival requirements implicitly apply to the entire order of takers) (I) At CL: General survival requirement for intestate and not just for spouses (A) ANY amount of time was long enough to constitute survival even a breath longer (B) Standard is that one has to show by a preponderance of the evidence who survived longer. If cannot prove by clear and convincing evidence that one spouse survived the other, the property of each is distributed as though each survived the other. 4 (II) Modernly/CA: Depends on if or NP or Testate or Intestate: (A) Testate/Non-Probate: §21109: Need to prove with clear and convincing evidence unless written instrument says otherwise that SS survived longer than Decedent in order for SS to take (B) Intestate: §6403: SS needs to survive 120 hours (5 days) longer than Decedent in order for SS to take otherwise presumed to have predeceased Decedent. (I) BOP = Prove by clear and convincing evidence that SS survived for 120 hours longer (II) If BOP not met, the property of each person shall be distributed as if that person had predeceased the other (III) This section DOES NOT apply if failure to meet 120 hour requirement would result in property escheating to the state OR person in question died before 1/1/90. (C) Beneficiary takes conditioned on survivorship: §222 (I) If B’s right to take any interest depends on surviving another, it must be proven by Clear and Convincing evidence or B is deemed to not have survived. (Applies to persons other than SS.) (II) If one of two or more B would take if he or she survived the others, and no clear and convincing evidence exists that any one B survived another B, property is divided equally among all Bs and distributed as though each B had survived the others. (D) Joint tenancy survival requirements: §223 (I) Two JT die simultaneously and there is no clear and convincing evidence that one survived the other, then by operation of law, any JT property is transmuted to tenants in common and each estate of the deceased JT gets half. (II) If there are more than two JT and no clear and convincing evidence that anyone survived the other, then divide the property into equal shares and distribute as though each JT had survived the other. (E) Life/Accident Insurance: §224 (I) If insured and beneficiary die simultaneously, and there is no clear and convincing evidence that B survived I, then treated as though the I survived the B (B’s estate would not get money) EXCEPT (II) If policy is CP or quasi-CP, then distributed as CP (F) Community or Quasi-Community Property and Simultaneous Death: §103 (I) If H and W die with CP or quasi-CP and there is no clear and convincing evidence that either survived the other, then (a) treat each spouses’ ½ as though that spouse had survived the other. (III) Artificially Prolonged life: 5 (A) CL: No breathing, no pulse = death (B) Modernly: Irreversible cessation of brain activity = death e) Recapture Doctrine: §6402.5: If there is no SS and no surviving issue, next step is to ask if there is a predeceased spouse? If there is a predeceased spouse, the Recapture Doctrine protects the family of the predeceased spouse by “recapturing” all qualifying property that the decedent (2nd of spouses to die) took from the predeceased spouse. (I) Doctrine only applies if 2nd spouse dies probate intestate (w/no will) (II) Does not matter how the now dead 2nd spouse got the property from the predeceased spouse, (by will, JT, etc) as long as the property qualifies, it can be recaptured. (A) Example: If H left W $1m by will and W dies within 15 years and intestate, then H’s family recaptures all of the $1m b/c that is what W got by virtue of H’s death. If left in JT or something else, same result. (III) Qualifying Property: Real vs. Personal (A) Real Property: Recaptured if the 2nd spouse dies within 15 years of the first spouse (B) Personal Property: Recaptured if the 2nd spouse dies within 5 years of the first spouse and there is a written title for the assets in question and the aggregate value of such assets is greater than $10k (IV) Order of takers once recaptured qualifying property: (A) Issue of predeceased spouse (2nd spouses’ step kids) (B) Parents of predeceased spouse (C) Issue of parents of predeceased spouse (D) If none of the above exist, ignore this recapture doctrine and return to original list of takers, beginning with Parents 3) Issue – Children and Descendants of Children a) HOW DOES AN ISSUE TAKE?: Issues take equally. Issues’ spouses are not entitled to take. If one is related through two blood lines, they still only get one single share. (§6413) (I) ISSUE TAKING ANALYSIS: (A) Where (which tier) do you make your first division? (B) How many shares will the property be divided into? (C) How are we going to treat dropping shares? (II) Three distribution analysis: When one of several children has died before D, leaving kids of their own, the descendants of D’s dead child REPRESENT the dead child, and divide that child’s shares among themselves. (A) Per Stirpes: (i) Make first division in first tier ALWAYS: whether there are issues alive or not (ii) One share for each live person and one share for each dead person survived by issue No surviving spouse; no issue; and there is a pre-deceased spouse = Recapture Doctrine. If spent money or consumed it, then that property can’t be recaptured. 6 (iii) Shares drop by blood line: dead person’s share goes to their surviving issues and all issue split it if more than one issue of dead person (B) Per Capita: CA §240: This is the default approach if one doesn’t positively express how they would like distribution to be made. Individuals can opt out of default by using §§245-47 of the Probate Code. (i) Make first division at the first tier where there is a live taker (ii) One share for each live person and one share for each dead person survived by issue (iii) Shares drop by blood line: dead person’s share goes to their surviving issues and all issues split it if more than one issue of dead person (C) Per Capita Each Generation: (i) Make first division at the first tier where there is a live taker (ii) One share for each live person and one share for each dead person survived by issue (iii) Shares are dropped to the next tier and pooled and split equally b/t all eligible takers. Any issues, in the last tier, with surviving parents would not share in pooling. b) HOW DOES ONE QUALIFY AS AN ISSUE?: Need Parent-Child relationship to qualify as an issue. (I) How does one create a parent-child relationship? (A) CL approach: Natural born child of married couple. Marriage presumes that a parent-child relationship exists b/c know who mother is and if married, husband is father. (B) Out of wedlock: §6452: For there to be a parent-child relationship, the parent or relative of the parent must: (i) acknowledge the child (hold it out as their own), AND (ii) contribute to the support or care of child (C) Court ordered proceeding of declaring/determining paternity: (i) Brought for child support reasons (ii) Brought for death/will purposes (iii) Prefer such actions to be brought when parties are alive. Standard to prove guy is the father is preponderance of the evidence. If bring suit after alleged father is dead, the standard to prove that dead guy was the father is clear and convincing. (D) Adoption (see below for additional adoption info.) (II) What are the inheritance rights of an established issue?: Child can take from and through the parent (can inherit from grandparents), and the parent can take from and through the child. Two-way inheritance rights created by parent-child relationship. (A) Marriage Scenario: Child inherits through and from parents, and parents inherit through and from child. For purposes of will construction: If you write will and say per capita when all heirs are in the same generation OR use per capita and per stirpes or equally by right of rep., you’d get the CA default of per capita. Can get per stripes if use: (1) per stirpes, (2) by representation, or (3) by right of representation. Can divide by per capita by generation by using “per capita by generation.” 7 (B) Out of Wedlock Scenario: Child can inherit through and from parents, BUT in order for the parent or relative of the parents to take, they must acknowledge the child and provide support for the child. (i) Example: Illegitimate child not acknowledged by father, but father’s brother acknowledged and supported child. Child wins lottery and dies intestate – no spouse or issue. Father can’t take, but Uncle can (III) When an issue’s inheritance rights begin? (A) Children are treated alive at the moment of conception, to the extent that they are born alive, and it benefits them for inheritance rights. (B) Child must be born at least 300 days from end of marriage or death of a parent to establish the presumption that the child born was the dead person’s or the divorced spouse. Birth within 300 days = presumption. (i) Posthumously born: a child conceived in D’s lifetime is treated as being alive at the time of D’s death. (ii) Posthumously conceived: (guy died during sex): Child can still take b/c would be born within the 300 days. (C) After 300 days, the burden shifts to the child to prove that the person in question is the natural parent. (D) Case issue: Hecht: Should we permit a deceased individual to devise his sperm as he sees fit? Nature of D’s property interest in his sperm? (i) Court said that sperm is a special type of property and it can ONLY go to the person to whom it is devised – it cannot be transferred or split b/t parties regardless of settlement agreement. (ii) If a child is posthumously conceived, not posthumously born, the CL rule applies. The class closes as soon as one member takes and when the kid is born, that kid won’t take. (iii) Class closing rule applies if die intestate. If die testate, then rule doesn’t apply and posthumously conceived kid is treated as though the decedent is his or her natural parent. (IV) Adoption: Consent needed by a living natural parent in order to adopt a minor child (A) General Rule: Classic scenario: Adoption completely severs the relationship b/t the natural parents (including the parent’s entire family) and the child, and puts the child in the adoptive parents family, and adopted child treated as though always a part of that family. (i) If relationship is severed b/t child and natural parents, no relatives of the natural parents can inherit from child. (B) CA RULE: Classic scenario: Adoption servers relationships UNLESS (i) Natural parent and the adopted person lived together at any time as parent and child, AND (ii) The adoption was by the spouse (stepparent) of either of the natural parents or after the death of either of the natural parents (iii)In this scenario, the child can inherit from both natural parents and new stepparent. At CL, future interests held as a class, once estate became possessory (one in class takes) class closes and posthumously conceived kid takes nothing. Examples – T devised: To A for life, then to B’s kids and heirs. Life estate to A, vested remainder in A subject to open. B has kids X, Y. A dies X , Y take. B has kid Z. Class closed and Z gets nada. Solution: Hold the “male in life being” under RAP to be the period of his reproductive capacity, including any postmorrte period during which his sperm remains fertile. 8 (iv) If parents were to die, child would inherit from both natural parents and both new adopting parents. Only adopted parents would inherit (C) Adoption by Stepparent: When adopted by a stepparent, child can inherit from and through both natural parents and stepparents. The only ones that can inherit from the child are the natural parent married to the stepparent and that stepparent. (D) Adoption after Death of the Natural Parent: In death, a child can inherit from both natural parents and stepparents to the child but only the living natural parent and the stepparent can inherit from the child. (Same as in divorce) (E) Adoption by Another Adult (Not the Stepparent): Same Gender: Non-stepparent adoption where both natural parents are alive. The single adoptive parent steps into the shoes of the natural parent of the same sex, and inherits as though the natural parent. (i) Same sex parents: have both lovers adopt child at the same time to avoid this rule (F) Attempted Foster Parents/Stepparent Adoption: §6454: To determine the intestate succession for a foster/step parent, a parentchhil relationship exists between the child and the foster/step parent if BOTH of the following occur: (i) relationship b/t child and potential adopting parent began during the child’s minority and continued throughout the joint lifetimes of both AND (ii) established by clear and convincing evidence that the foster/step parent would have adopted the child but for the legal barrier. (iii) In this scenario, the child can inherit from the potential adopting parents (those that would have adopted but for the legal barrier; no consent). The potential adopting parents can not inherit through the child, as only the natural parents can. (iv) If person is no longer a minor, then could be adopted b/c don’t need natural parents permission. This would get around the statute, however; if an adult, would have already tried to adopt so would have but for a legal barrier, so if proved by clear and convincing, statute doesn’t matter. Courts split if trying to adopt once and couldn’t b/c of legal barrier is enough to show clear and convincing. (G) Doctrine of Equitable/Virtual Adoption: Equity does that which ought to be done. What do you do with a child who is taken in, raised, and claimed as a person’s own but never statutorily adopted? (O’Neal case) (i) At CL, 5 requirements: (1) showing of an agreement b/t the natural and adopting parents (2) Child has to live in the home of the adopting parents – full performance of the agreement by the child (3) Natural parents fully perform – give up custody of child Scenario = Adopting parents want to adopt but for legal barrier of natural parent not consenting to adoption Considered a contractual claim Adopting parent (m) doesn’t marry natural parent (F). Other natural parent (M) consents to the adoption so (M) is now out of the picture. (m) steps into the shoes of M. 9 (4) Adopting parents must take child in and treat as their own child – partial performance (partial b/c don’t completely adopt the child by following up with adoption papers) (5) Adopting parents die intestate. (ii) O’Neal case: Analysis: (1) There was no legal right for the paternal aunt to enter into the adoption agreement; therefore, not a valid agreement so no equitable adoption. (2) Court proposed new rule: If the child was lead to believe that he or she was adopted, then equitable adoption should apply. (iii)Majority Rule: No parent child relationship established by equitable adoption –When remedy is sought, it is treated as a breach of contract claim. (1) Inheritance is only one way. The “adoptive” child can inherit from the parents but the parents can’t inherit from the child b/c they failed to fully perform the contract by not adopting child; therefore, they have no claim in equity. (2) Child takes only from parties to the contract, so they take from equitable parents but not through the equitable parents. Child can’t inherit from grandparents, aunts, uncles, etc. (3) Only natural parents can take from the child. (iv) Minority Rule: If the child is lead to believe that they were adopted, then that should be sufficient and the child should be treated as if they were adopted. Not adopted in CA. (v) CA statute: Nothing in California statute (CA probate code) affects or limits the judicial doctrine of equitable doctrine. (H) Adopting Adults: Can adopt an adult in the US, not in England. (i) In NY, gay lovers adopted each other. Court ruled that can’t adopt gay lover even though NY statute allowed adult adoption. Court reasoned that a sexual relationship was incompatible with a parent-child relationship. (ii) If adopt an adult, that adult would get inheritance rights of a child, and in the case of a gay lover, would also have the inheritance rights of a spouse. However, adult would only take from one. (V) Half-Blood Sibling: Only one shared parent (A) In CA, treat them the same as if full blood. (VI) In-vitro/Surrogate: (A) CA statute: Where artificial insemination and donor has no paternal relationship with child, don’t recognize donor as the natural dad. (B) If do artificial insemination during marriage and husband consents to procedure, the husband is the natural father as long as he did consent and procedure done medically/in a medical facility. 10 (C) If don’t follow statutory requirements and a medical center, the donor has rights to the child. (VII) Child born of Rape: The male is not recognized as the natural dad and absolutely no legal relationship with child. 4) Parent(s) equally 5) Issue of Parents/Siblings – “first line collaterals” 6) Grandparents and Issue of Grandparents 7) Issue of Pre-Deceased Spouse 8) Next of Kin a) When get to this point, have to figure out who will take the property. CA Approach is the parentelic tiebreaker: (i) First go to list of takers and make sure there are no takers prior to the next of kin. (ii) Once get to next of kin, you need to count the degree of relationship w/parentelic tie breaker. For each of the alive descendants, you must count the degrees of relationship from them to the decedent. TO do this, find the common ancestor b/t the decedent and each of the alive descendants. Count up from decedent to the common ancestor and down to the alive descendant. That is the degrees of relationship. The descendant with the lowest number of the degrees is the taker. If there is a tie, then count parentelics: parents, grandparents, greatgrandparents, etc., and the closest of the tied descendants to the decedent is the taker. Can end up being more than one and then they split. (See last page of examples handout.) 9) Parents or Issue of Parents of Pre-Deceased Spouse 10) Escheat to State 11) CA § 6413: A person who is related to decedent through two lines of relationships only takes through one line; whichever gives the largest share C) Transfers to Children – Advancement Doctrine: (Only applies to Intestate Distribution) 1) Advancements: Intervivos gifts from parents to heirs; not necessarily only to their children. (No living person has heirs; only heirs apparent) a) At CL: any intervivos gift was presumed to be an advancement (prepayment of intestate share) against the takers and would be deducted from their intestate share b) Modernly/CA Law (§6409): Presumption reversed: If a person dies intestate as to all or part of his estate, property the decedent gave as intervivos gifts to an heir is treated as an advancement against the heir’s share of the Intestate estate ONLY if one of the following occurs: (I) D declares in a contemporaneous writing that the gift is to be deducted from the heir’s share of the estate or that the gift is an advancement against the heir’s share of the estate. The above described writing indicates either party’s intent that the gift be deducted from the inheritance; just need to show your intent that the gift counts against the intestate share. OR This doctrine does affect who takes and how much. 11 (II) The HEIR acknowledges in writing that the gift is to be so deducted or is an advancement. Can be done at any time. (III) If D wants to make the gift an advancement at a later date, then the writing must satisfy all the written requirements of a will. (IV) Valuation of Property: (i) Property advanced is valued as of the time the HEIR came into possession or enjoyment of the property OR as of the time of the death of D, whichever occurs first (ii) If value of the property advanced is expressed in D’s contemporaneous writing OR in the HEIR’s contemporaneous writing, that value is conclusive for distribution of estate. (V) Donee predeceased D: Value of property is NOT taken into account in computing the intestate share for the Donee’s issue, unless the instrument says otherwise. c) Hotchpot: If the gift is an advancement, must combine it all back into the total value of the estate and take the following measures: (I) Calculate: Divide the total estate by the number of taking issues, then subtract the advancement from the share of the individual who received it. (II) Can’t require donee to refund: If the advancement of one taker is greater than his divided share, he or she can’t be forced to give back money to create the hotchpot. (III) Opting Out: A taker can also opt out of the estate: Then you subtract the taker’s advancement from the total estate and divide the new total among the remaining takers. (IV) If one taker’s advancement is greater than their share, and that advancement would make the individual allotments greater than what is in the estate, calculate the hotchpot without that taker. d) Debts owed to decedent: §6410: (I) A debt owed to decedent is NOT charged against the intestate share of any person except the debtor. (II) If the debtor predeceases the decedent, the debt is not taken into account in computing the intestate share of the debtor’s issue. 2) Transferring an EXPECTANCY a) No living person has heirs but only “heirs apparent.” b) Heirs apparent only possess an expectancy which can be destroyed by decedent’s will or deed. Such expectancy is not a legal interest. c) General Rule: Expectancy, not being an interest, cannot be transferred at law; however, courts of equity may enforce a contract to transfer an expectancy if the deal seems fair and equitable under all the circumstances. 12 (I) Equity scrutinizes such transactions to protect prospective heirs from unfair bargains. 3) Managing a Minor’s Property: a) Who manages for a minor?: (I) Guardian of the person: This person is responsible for a minor child’s custody and care. As long as one parent is alive and competent, that parent is the natural guardian of the child. If both parents die with a minor child, and a guardian is not designate in the will, the court appoints one. (II) Reasons for a parent with minor children to have a will: (A) Appoint guardian of a person for their minor children (B) Deal with the management of the minor’s property: A guardian of the person has no authority to deal with the minor’s property. b) Three alternatives for property management: (I) Guardianship/Conservatorship: Parent dies intestate, therefore court appointed. Primary purpose is to preserve property and not manage it. Includes court involvement. Accountable to the court. (II) Custodianship: Need written instrument to create. Holds property for the benefit of the minor child; can manage the property and reinvest it for child’s benefit (fiduciary relationship). Must turn over property when child reaches 21 or child’s estate if child dies before reaching 21. Not under direct court supervision. (III) Trustee: Need written instrument to create it. Highest fiduciary relationship. Most flexible. Trust can postpone child’s possession of the property until donor thinks child is competent to manage the property. D) Bars to Succession 1) Homicide – Doctrine that affects who takes and how much a) Title doesn’t pass to slayer: CA statute §250: Treat killer as though pre-deceased decedent for all purposes. (I) Person who feloniously and intentionally kills the decedent can’t inherit: (A) any type of property, interest, or benefit from a will or trust (B) any property from decedent by intestate succession (C) any CP or quasi-CP that killer would have gotten upon D’s death (II) Property, interest, or benefit passes as though killer predeceased Decedent and §21110 doesn’t apply; anti-lapse statute does not apply: can’t make devise not fail, and the devise fails no matter what b) Joint Tenants: CA statute § 251: JT who feloniously and intentionally kills another JT effects a severance of the joint tenancy and the killer has NO rights of survivorship (I) Property passes as though it is decedents property as no longer JT (II) Applies to any thing that has co-ownership with survivorship incidents Murder and voluntary manslaughter = intentional Involuntary and selfdeffens = unintentional 13 c) Named Beneficiaries: CA statute § 252: Named beneficiary who feloniously and intentionally kills the insured can’t take from a life insurance policy, bond, or any contract. (I) Benefits are paid out as though the killer predeceased the decedent d) Judgment of Conviction: CA statute §254: (I) Final judgment of conviction of felonious and intentional killing is conclusive for this part. (II) If killer is acquitted in criminal court, the killer could be found liable of felonious and intentional crime in civil court, and the killer can not take under the statute. If civilly, guilt is found by a preponderance of the evidence, then killer can’t take. If guilty in criminal court, then barred in from civil court and civil court rules probate. e) Anti-Lapse and Homicide: Doesn’t apply in Homicide cases: General Rules: (I) H kills mom and she dies testate, H’s issues don’t take under will through H (or by way of representation). However, H’s issues could take under the will if the mom devised property directly to them and not to them through their parent. (II) H kills mom and she dies intestate, H’s issues do take (III) H kills mom and she has a will that says H’s issues take in the event H predeceases mom (legally or actually), then H’s issues take from will by the express terms of the will and not by anti-lapse 2) Disclaimer: post mortem estate planning a) CA statute §275: A beneficiary may disclaim any interest (whether by testate or intestate) by filing a disclaimer, and then the beneficiary is treated as predeceased for purposes of distribution. (I) When a person disclaims, that person can’t say to whom they now want the property to go to. The property will go to the next one in line, so need to know who that is or when you disclaim, someone you don’t like may get the goods. b) CA statute §282: If disclaimer is filed on or after 1/1/85, the beneficiary is not treated as predeceased for purposes of determining which level to make the first division at (1st tier or 1st tier w/live takers) but is treated as predeceased for distribution purposes. (I) Rationale: Someone may disclaim in order to take a larger share. If the person disclaims and it affects the determination of the 1st division of where to distribute shares, that person is then treated as alive for division and dead for distribution. (II) Hypo: A has kids B and C. B, who is dead, has one kid, d. C has 10 kids, e-n. A dies intestate. Under per capita, CA default, d gets ½ and C gets ½. If C disclaims, the first level with live takers is d and e-n, and thus d would only get 1/11 and e-n would split 10/11. C is affecting level at which the division is made, and C’s family takes a windfall. Therefore, to prevent this from 14 happening, even if C disclaims, C is treated as living for division purposes, so the division would be made at C’s level b/c 1st tier with live takers, and so d would get ½ and e-n would split the ½ b/c for distribution purposes, C is dead. III) FORMALITIES OF WILLS: MENTAL CAPACITY A) Testamentary Mental Capacity – Who can make a will? 1) Requirements for mental capacity: § 6100(a) a) Person must be of majority age – 18 or older b) Person must be of sound mind (I) Understanding nature and extent of your property, and (II) Understanding the natural objects of your bounty (§ 6100.5) (i) Heirs apparent are the natural objects of your bounty: people who would take under intestate schemes if you died w/o a will. c) Person must understand the legal effect of the will/testamentary act he or she is executing 2) A conservator can execute a will for the person in question with court authorization: §6100(b) a) If there is a conservator, that does not imply that the person (conservatee) lacks testamentary capacity. b) A mentally competent conservatee has the right to amend or revoke a will made by the conservator, and even make a new will 3) Strong presumption of legal testamentary capacity. a) Low threshold for testamentary capacity. b) Burden is on the parties challenging the will to show capacity is lacking 4) Levels of capacity a) Capacity to make a will is less than that needed to make a contract or a gift (I) Rationale: Law wants to protect the incompetent contractor from economic loss during his or her lifetime, and does not really taken into consideration protecting a dead person from economic loss. b) Legal capacity to make a will is more than that is needed to get married. c) For an attorney to draft a will for an incompetent person is a breach of professional ethics. (I) Lawyers are not required to investigate the client’s condition, and therefore may rely on his or her own judgment regarding capacity or lack thereof. 5) Defects in Capacities: Challenges capacity on 3 grounds a) Insane delusions b) Undue influence c) Fraud/Mistake d) Proving that capacity itself did not exist at time of execution Need capacity at time of will execution; later loss of capacity does not make a will void. 15 B) Insane Delusions – Very fact sensitive doctrine. Worried if have such delusions at time of execution of the will. 1) Definition: A delusion to which one adheres to against all evidence and reason to the contrary. a) Majority Rule: A delusion is insane even if there is some factual basis for it if a rational person in the testator’s situation could not have drawn the conclusion reached by the testator b) CA Rule: Minority Rule: If there is any factual basis at all for the testator’s delusion, it is not deemed insane. c) To qualify as an insane delusion, one does not have to try and talk the delusional person out of their belief. Just look at the way they held their belief, and usually can tell from that if person would change their mind or not b/c people will usually hold to their belief, if delusional, despite telling persons facts to the contrary. 2) Causation: Did the insane delusion actually affect the will? a) “But for” standard: “But for” the delusion the testator would not have distributed property as he or she did or rather, the will would not have been drafted as such. (I) CA uses this standard. (II) Higher threshold and more respectful of the testator’s intent. b) “Might have affected” standard: Delusion “might have affected” the distribution of testator’s property. (I) Lower threshold and more invasive. 3) Effect of delusion: a) Only the part or provision of the will affected by the insane delusion fails. b) If the entire will is affected by the insane delusion, then the entire will fails. c) You can still have sufficient testamentary capacity to execute a will and be suffering from an insane delusion. This causes just the particular provision affected to be stricken. 4) Mistake v. Insane Delusion: a) Delusion: A belief not susceptible to correction by presenting the testator with evidence indicating the falsity of the belief. (I) Courts can invalidate wills b/c of insane delusions; grounds for attacking wills. b) Mistake: Susceptible to correction if the testator is told the truth. (I) Courts do not invalidate wills b/c of mistakes; not grounds for attacking wills. C) Undue Influence – Equity says one should not profit from own wrongdoing. Very fact sensitive doctrine. Effect of undue influence is that the will show’s influencer’s intent and not testator’s intent. 1) Testator’s will is coerced into doing that which he or she does not desire to do so. a) Must show the undue influence b) Must show causation c) There does not need to be a special/confidential relationship in order to establish undue influence If unnatural disposition of property, probably indicates a problem. Look for unnatural disposition. 16 2) Four Factor Approach: At time of execution, the following four factors are used to show undue influence: a) Testator was susceptible to undue influence (I) Testator is elderly/sick or dependent on influencer (II) Sexual relationship b/t the two b) Influencer had the disposition/motive to exercise such undue influence over the testator c) Influencer had the opportunity to exercise the undue influence over the testator d) Disposition is the result of the undue influence = Causation 3) Party challenging the will has burden of proof, and must show by a preponderance of the evidence that undue influence affected the distribution of property from the will. 4) Presumption Shifting Approach: Three Factor Approach: In CA, if you show the following three factors, it creates a presumption of undue influence and shifts the burden to the defendant to prove there was in fact no undue influence: a) Existence of a confidential relationship b/t the testator and defendant (party accused of undue influence) b) Defendant (party accused of undue influence) was active in the procurement or execution of the will c) Defendant (party accused of undue influence) unduly benefits 5) No Contest Clauses: Provides that a beneficiary who contests/challenges the will shall take nothing, or a token amount, in lieu of the provisions made for the beneficiary in the will. a) Designed to discourage beneficiaries from challenging wills. (I) Generally, the person contesting the will has to have received something under the will, and then with a no-contest clause, if they sue and lose, they get nothing. Therefore beneficiaries will think twice before suing b/c could end up with nothing. b) CA recognizes the validity of No-Contest Clauses and construe such clauses strictly and narrowly. CA statute § 21306 (hybrid approach and highest standard) (I) No-contest clause will not be applied (even if lose) if there is probable cause to support your claim AND your claim is limited to one or more of the following allegations: (A) Forgery, (B) Revocation (C) Against someone who assisted in procurement or execution of the will c) Courts often avoid conflict of contesting wills by calling them “suits for construction.” (I) Suits to construe wills are not “contests” 17 D) Fraud 1) Occurs where the Testator is deceived by a misrepresentation and does that which the testator would not have done had the misrepresentation not have been made. 2) A knowing misrepresentation must be made with BOTH a) the intent to deceive the testator AND b) the purpose of influencing the testamentary disposition. 3) Causation: Causation also must be proven with fraud a) “But for” the fraud, the will would not have been drafted as such 4) Effect of Fraud: a) Provision in a will procured by fraud is held invalid. b) The remaining provisions remain unless the fraud goes to the entire will or the portions invalidated by fraud are inseparable from the rest of the will. 5) There are two types of fraud: a) Fraud in the Inducement: Occurs when a person misrepresents facts, thereby causing the testator: (I) To execute a will (II) To include particular provisions in the wrongdoer’s favor (III) To refrain from revoking a will (IV) Not to execute a will at all (A) A fraudulently procured inheritance or bequest is invalid only if the testator would not have left the inheritance or made the bequest had the testator known the true facts. (B) Hypo: X has a will leaving all to her niece, A. Her nephew, B, lies and tells X that A is dead while in fact A is alive. X says, “In that case, I will leave all to you, B.” X drafts a new will and executes it. Fraud b/c not true and b/c of what X was told she executed a new will and B had the intent and purpose to fraud his aunt when he told her such a lie. b) Fraud in the Execution: Occurs when a person misrepresents the character or content of the instrument signed by the testator, which does not in fact carry out the testator’s intent. (I) Examples are if something wrong with document itself, or the lawyer put something will testator didn’t know about, or will got signed w/o really knowing testator signed it. (II) Hypo: T, with poor eyesight, asks her heir apparent, H, to bring her the document prepared for her as her will so she can sign it. H brings T a document that is not the intended will and H knows as such. T signs it b/c T thinks it is her will. 6) Preventing revocation of a will and making of a new will b/c of fraud a) General Rule: Where a devisee or a legatee under a will already executed, prevents the T by fraud, duress, or undue influence, from revoking the will and 18 executing a new will in favor of another beneficiary or prevents T from making a codicil to the existing will, (and the T dies with the initial will in force) the devise or legatee holds the property he or she received as a constructive trust for the true intended beneficiary. Impose a constructive trust rather than strike the will. b) CA Statute § 6104: The execution or revocation of a will or a part of a will is ineffective to the extent the execution or revocation was procured by fraud, duress, menace, or undue influence. c) A constructive trust can also be imposed when there is no fraud involved but the Court thinks that unjust enrichment would result if the person named in the will was to retain the property. (Court can’t prove person did bad but this such order implies as such.) 7) Tortious Interference with Expectancy a) Intentional interference with an expected inheritance or gift is a valid cause of action. (I) Under this theory, the plaintiff must prove that the interference involved conduct tortious in itself, such as fraud, duress, or undue influence. (II) Theory cannot be used when the challenge is based on T’s mental capacity b) Action for tortious interference is not a will contest. (I) Seeks to recover damages (possibly punitive) from a third party for tortious interference and doesn’t challenge probate or validity of will (II) No contest clauses don’t apply b/c not a will contest (III) Longer SOL than with will contests. E) Interested Drafter Provisions – Not allowed to take b/c afraid of undue influence 1) CA Statute §21350: Except as provided in §21351, no provision of ANY INSTRUMEMT shall be valid to make ANY DONATIVE transfer to any of the following: a) the person who drafted the instrument b) a person who is related by blood or marriage to, cohabitates with, or is an employer of the drafter c) a partner or shareholder or ANY LAW PARTNERSHIP or LAW CORPORATION in which the drafter has an ownership interest, and any employee of the partnership or corporation d) any person with a fiduciary relationship with the transferor (like conservator or trustee) who transcribes the instrument or causes it to be transcribed OR any person related by blood, marriage, or cohabitates with or is an employee of the fiduciary e) a care custodian of a dependent adult 2) CA statute §21351: An irrebuttable presumption is created regarding interested drafters (they don’t take) unless one falls into the following exceptions: In CA, there are 4 ways to claim undue influence: 1) Three factor approach 2) Four factor approach 3) Interested Drafter 4) Interested Witness 19 a) transferor is related by blood or marriage or cohabitates with the transferee or the person who drafted the instrument OR b) the instrument is reviewed by an independent attorney who (I) counsels the client (transferor) about nature of gift, and (II) signs a Certificate of Independent Review and gives it to transferor and drafter 3) Bequests to Attorneys (follows above CA statute) a) Presumption of undue influence arises when an attorney-drafter receives a legacy, except when the attorney is related to the testator. b) Presumption can be rebutted only by clear and convincing evidence provided by the attorney. c) Could have ethical considerations and if attorney is found guilty of undue influence, attorney has to pay attorney’s fees IV) MORE WILLS FORMALITIES: EXECUTION A) COMPLIANCE APPROACHES 1) Majority Rule: Strict Compliance: CA Approach a) Hardline approach designed for efficiency. b) Comply with the letter of the law c) Judge made law so one is able to argue for substantial compliance but California Legislature has declined to adopt 2) Minority Rule: Substantial Compliance a) Two prong test: When formal defects occur must have: (I) Clear and convincing evidence that the decedent intended for this to be his will (II) Clear and convincing evidence that the testator substantially complied b) Public policy behind Substantial Compliance: (I) Respect Testator’s intent (II) Prevent fraud/undue influence (III) Reduce litigation and administration costs c) Langbein: Father of substantial compliance eventually ditches if for a “better” approach: Dispensing Power: power to validate a document decedent intended to be a will even though formalities were not compiled with. (I) Dispensing power test: (A) Clear and convincing evidence that the decedent intended for this to be his will (you still need a writing) (B) You can dispense with most of the formalities UNLESS there is a concern of fraud. B) ATTESTED WILLS 1) Requirements for a Valid Attested Will: CA Statute §6110 On exam, lead w/Strict Compliance, but mention the other approaches briefly b/c CA courts could adopt those approaches judicially. However, the most important is strict compliance. 20 a) Will shall be in writing: will doesn’t have to give away property to be valid, can just appoint an executor or something like that b) Signed by one of the following: (I) Testator (II) In testator’s name by another in the testator’s presence and by testator’s direction (III) Conservator pursuant to a court order to make a will under §2580 c) Witnessed by being signed by at least 2 persons each of whom (I) being present at the same time, witnessed either the signing of the will or the testator’s acknowledgment of the signature or the will AND (II) understood that the instrument they signed was the testator’s will. d) Testamentary capacity is also needed at the time of execution of the will. There is a strong presumption that have such capacity; so don’t discuss lack thereof and its affects unless facts so warrant it. 2) Requirements of a valid will serve four functions: a) Ritualistic Function: Impresses upon the transferor the significance of his statements and actions and justifies to the court that this is in fact T’s intent. b) Protective Function: Safeguards T at the time of execution against undue influence or other forms of imposition – witnesses there to make sure nothing “illegal” done c) Channeling Function: Ushers T to a lawyer in order to create a safe harbor which provides the T with assurance that his wishes will be carried out. d) Evidentiary Function: Requirements of a valid will increase the reliability of the proof presented in court. Quality of evidence and not quantity. 3) Witness Requirements a) Presence: Two approaches: (I) Line of Sight Test: Testator does not actually have to see the witnesses signing the will, but Testator must be able to see them sign the will if he or she were to look. (II) Conscious Presence Test: CA Approach: Witness is in the presence of the testator if the testator, through sight, hearing, or general consciousness of events, comprehends that the witness is in the act of signing and has some meaningful interaction with the Testator. (III) Telephonic Presence does not qualify b) Delayed Attestation: T signs and one witness signs and then trauma occurs and 2nd witness doesn’t sign. Must the 2nd witness sign before the T dies? (I) Witness must sign within reasonable time after the testator signed but not all signatures have to be at the same time (II) Some states use modern trend: 6 months to a year after T’s death 21 c) Interested Witnesses = Witness to a will also is a beneficiary of the same will (I) In CA, a interested witness does not forfeit his or her gift under the will. (A) §6112(b): A will or any provision thereof is not invalid b/c the will is signed by an interested witness. (II) Under this CA statute §6112 (a.k.a “purging statute”): Unless there are at least two other disinterested witnesses, a devise to a signing witness creates a rebuttable presumption that such witness procured the devise by duress, menace, fraud, or undue influence. (A) Presumption doesn’t apply where signing witness got gift in a fiduciary capacity. (III) If witness fails to rebut and the devise fails, the witness takes only what he would have gotten if there was no will and nothing more even if devise was much more. (A) Court “purges” the excess interest given by the will (IV) If established that witness did procure devise by fraud, duress, menace, then witness takes nothing. However, would have to prove that there was in fact fraud, duress, etc in order for them to take nothing b/c under interested witness, person is only purged of excess. (V) Hypo: Will #1 T gives 2k to A. Will #2 T gives 4k to A, and A is one of two witnesses. IF #1 is revoked ONLY b/c #2 is inconsistent, then look to will #1 and purge A of excess – A takes 2k. If #1 is revoked independently of #2, then look to what A would take under intestacy and purge her of excess. 4) Signing Requirements a) Order of Signing: (I) Modern Approach: As long as there is one execution ceremony and all people are present and remain present during the entire execution of the will, it doesn’t matter who signs first. (II) Common Law Approach: Testator must sign first b) Signature: What qualifies as a valid signature? (I) CA Approach: Anything written or any marking by the testator in which the individual intends for it to be his or her signature qualifies as a valid signature. (II) CA Civil Code: If want “X” to qualify as your signature, a witness must (A) write the name of the person who made the “X” (B) the witness write their name down as the one who identified “X” as the signature of the person and was the one who in fact wrote the testator’s name (C) As this is the Civil Code and not in the Probate Code, CA only requires substantial compliance with the above requirements Can use to show undue influence Will is still valid and interested witness takes as long as there are at least 2 other disinterested witnesses and if there isn’t, rebuttable presumption that interested witness got devise through some type of fraud and purge that person of excess 22 c) Partial signature: Not allowed as a valid signature (A) Hypo: If T intended to write his full name and only got to ½ of it before dying of a heart attack, T didn’t intend for his signature to only be ½ of his name, so signature not valid. If he intended as such, then it would be valid. d) Additions to will after signing: (A) CA doesn’t require that signature be physically located at the end of the will, so if additional provisions of the will are beneath the signature but there before signing, then still valid and will can be probated. (B) If will already signed and additional provisions are put on the will, above or below the signature, then those extra parts are held invalid (unless complied with wills act formalities). At common law, the entire will was held invalid. 5) Three types of clauses in a will used to distribute property: a) Specific Gift: “I give my ring to my daughter, Carol.” If strike this clause b/c of some defect, gift falls to the residuary clause, and if no residuary clause, then to intestate. b) General Gifts: “I give 10k to my daughter.” Doesn’t matter where the money comes from, can be any 10k, and it is not a specific gift. If defect causes a general gift to be stricken, then gift falls to residuary clause, and if no residuary clause, then falls to intestate. c) Residuary Gifts: “I give the rest, residue, and remainder of my estate to Wife.” Gives away rest of stuff which was not given away specifically in the will. If strike this clause, gifts go to intestate. C) HOLOGRPAHIC WILLS – CA STATUTE § 6111 1) Requirements of a holographic will: a) Writing with material provisions in testator’s handwriting = who gets what b) Signed by the Testator c) Testamentary intent (I) Handwritten elements of the will need to illustrate testamentary intent in that the Testator must intend for that piece of paper to be his will i.e. “this paper” gets taken to probate as T’s will (II) Testamentary intent is also required for attested wills but attested wills include boiler-plate language of testamentary intent that sometimes holographic wills don’t. Discuss it as to both. (III) Contextual Approach: Look to context of will for testamentary approach. Deference will not be given to any portion of the will not in the T’s handwriting (strict compliance) but can look to other portions not in the T’s handwriting to find requisite testamentary intent. CA uses this approach. (A) Can a letter by a valid holographic will? If writing with material provisions in T’s handwriting and it is signed yes. If can find testamentary intent from letter, then valid. d) No Witnesses are required CA adopted this approach only in regards to a commercially printed form will and can argue this approach is meant to apply in all instances 23 e) No date required; HOWEVER, (I) if not dated and there is another will with inconsistent provisions, the holographic will is invalid to the extent of the inconsistencies UNLESS it can be established that the holographic will was executed after the other will. (A) Hypo: If two wills and one is holographic and not dated and the other is attested, the attested will controls and assumed to be written after the holographic. (B) Hypo: If two holographic wills, you strike any inconsistent provisions b/t the two holographic wills and then keep similar provisions. So in the inconsistent provisions, the property falls to the residual clause. (II) if it is established that the testator lacked testamentary capacity at any time during which the will might have been executed (no date so don’t know when that was) the will is invalid UNLESS established will was executed at a time that Testator had such capacity (A) Hypo: What if undated holographic will and T lacked capacity at any time during life? Rebuttable presumption that T executed holographic will while incapacitated. Burden on other side to rebut. (III) Relative Dating: Use contents of the will to tell date of the will and this can help to prove if such a will was executed after another will or not. (A) Example: In will it refers to your wedding day being 5 years ago. Would know approximate date of will from that reference. 2) Conditional Will: Condition has to occur before will comes into effect a) Hypo: W and H take a cruise. H writes an instrument that if H dies while on cruise, H leaves all stuff to P. H signs it, it’s a writing with material provisions in his handwriting. Doesn't die on the cruise but dies after he comes back. Is this will valid? (I) Usually it is presumed that the conditional language does not mean the will is to be probated only if the condition occurs, but it is instead merely a statement of inducement for execution of the will, which can be probated for any cause of death. (II) So which does one use? Always probate will or only if condition happens?: Strong presumption towards testacy over intestacy so presume that condition based will on is merely an explanation of why writing the will and it will be in effect no matter how the Testator dies. b) One would need to show that it is a condition precedent for the will to apply only for that one condition. (I) “If and only if I die on a cruise, my property goes . . .” This would be considered a conditional will and would not be in effect unless the person does in fact die on the cruise. D) CURATIVE DOCTRINES (to prevent wills from failing) 1) False Description: A mere false description does not make the instrument inoperative. A false description of the property or of the intended recipient may be stricken. 24 a) Hypo: In a will, it states “I give my house at 12 Bird Lane to H.” You really live at 21 Bird Lane and can’t give 12 Bird Lane to H b/c don’t own it. So, Court will strike the mis-description BUT is not allowed to rewrite the will with the correct information. Court will look at what is left and decide if that is enough information to figure out what goes to H. “I give my house at Bird Lane to H.” Only have one house on Bird Lane so know what property goes to H. b) Hard to apply if in strict compliance jx. 2) Constructive Trust: If there is fraud, go through constructive trust and give to those who were to get the property in the first place. Claim fraud in execution as no court has adopted this as of yet. 3) Read similar “mirror” wills together: Provisions of some wills are mirrors of each other so put them together and read the wills. Happens when H and W have the same will but leaves things to the other and each signs wrong will, so just read them together. Same outcome. (In re Snide: Court held that execution of the wills applied equally to both, so join will and that is good enough. Substantial compliance was basically used however not called as such b/c would then need to apply substantial compliance across the board.) V) MORE WILLS FORMALITIES: REVOCATION A) REVOCATION 1) There are four ways to revoke a will: (a will is probated unless it is validly revoked) a) Revocation by subsequent writing: The writing used to revoke an earlier will must be a valid will itself; so the revocation of one will by the presence and validation of another. (I) Subsequent writing can expressly revoke all or part of the prior will (II) Subsequent writing can implicitly revoke a prior will b/c of any inconsistencies in the two wills, and the later in time controls (III) Codicil: is a supplement to a will rather than a will replacement. Has to meet all requirements of a will but usually only amends the will or changes it slightly. If replaced the will, then that would be revocation by subsequent writing and not a codicil. (A) Hypo: In 1990 T gives 20k to B and the rest of the property to A. In 1992, T executes a will that gives 10k to B and her diamond ring to C, and her car to D. Contains no words of revocation. Even though the 1992 makes no reference to the earlier will, the 1992 will is a codicil. (i) T dies with both in effect, what result to B? To the extent the two can be read as compatible, read them that way instead of inconsistent. Court held that B got 30k. (ii) In 1992, T destroys the codicil with intention of revocation. T dies in ’95. Probate will? Yes. (iii) Destroys 1990 will with intent of revocation. Probate codicil? Codicil is an amendment to the will, so if get rid of the will, the codicil is also gone. If destroy the will that the codicil is based, the codicils are also gone b/c you got rid of the foundation of which the amendments effect General CL rule is if sign wrong will or wrong paper then will is not valid 25 b) Revocation by act: Need to have the physical act of destroying the will coupled with the intent or purpose of revoking the will and it must be done by either the testator or another person in the testator’s presence and direction. (telephonic presence doesn’t work) (I) Can the revoking act simply be writing CANCEL across the front? Yes, if such act was done on an original copy of the will, affecting the printed words, with the intent to revoke. (At CL had to affect printed word.) (II) UPC allows for such a writing to revoke a will as long as the writing affects the will itself and the intent is present, it doesn’t have to affect printed words. c) Presumption of Revocation Doctrine: Presumption arises when the will was last in the Testator’s possession, and after the T’s death, the will can not be found, and the presumption is that the will was destroyed by T with the intent to revoke. (I) Rebuttable presumption: Burden of rebutting the presumption is on the proponent of the will (one who wants the will to be in effect) (A) One would need to present sufficient evidence to convince the trier of fact that the absence of the will from testator’s possession after T’s death was not due to the testator destroying it and so it isn’t revoked. d) Revocation by Operation of Law: CA Statute §6122 (I) Dissolution of marriage: Divorce revokes any provision in decedent’s will for the ex-spouse. If remarry the ex-spouse, provisions revived. (A) Property and any appointments that would have gone to ex-spouse passes as though ex-spouse predeceased decedent. (B) A decree of legal separation which does not terminate the marriage is not a divorce and this section won’t apply. (C) If T divorces and still wants to give stuff to ex-spouse, T must execute a new will leaving stuff to ex-spouse otherwise presumption that ex-spouse is cut out rules. (D) Revocation by divorce DOES NOT apply to life insurance policies, pension plans, or other non-probate transfers. Ex-spouse would still take from these instruments. (E) CA allows ex-spouses to take under life insurance policies, etc., but not under wills in case of divorce. (as indicated above w/§6122) (II) Marriage after Execution of Will: If T executes will and then later marries, a large majority of states give the new spouse her intestate share UNLESS it appears from the will that the omission was intentional OR the spouse is provided for in the will or by a will substitute with the intent that spouse takes that instead of intestate share. (III) Birth of Children: (i) Minority: CL rule: Marriage followed by birth of issue revokes a will executed before marriage. (rule is disappearing) 26 (ii) Majority: Pretermitted child statutes: Gives a child born after execution of will, and not provided for in the will, a share in the parent’s estate. 2) Need to have capacity in order to revoke b/c if done by writing, that writing has to be a valid will and so testamentary capacity must be there. All capacity issues overlap with revocation. 3) How many wills can a person have? Normally one and then anything thereafter is a codicil. But not always. a) Hypo: T’s 1st writing: “I give my car to D.” T’s 2nd writing: “I give my house to B.” T’s 3rd writing: “I give 1000 to V.” T decides to revoke the first writing. Are the other two revoked? (I) Under one argument, no b/c the writings do not rely on one another; they don’t contradict or affect each other. The later writings are not amending the earlier ones, so not a codicil which is really an amendment/supplement to a will. (II) If there was a residuary clause in the 1st will, then every instrument thereafter would have to be a codicil. (III) In the above hypo, there is no residuary clause, so each is a will free standing on its own. B) LOST WILLS 1) A will that is lost or is destroyed w/o consent of the testator, or is destroyed with the consent of the testator but not in compliance with revocation statute can be admitted into probate if its contents are proved. 2) A lost will can be proved by a copy in the lawyer-drafter’s office or by a secretary who typed the will or by other clear and convincing evidence. C) DUPLICATE WILLS 1) If revocation by act or by later subsequent writing of one of the duplicate originals, all duplicate originals are revoked. 2) Revocation by presumption will not revoke all originals if any originals can be found. (I) Not revoked by if more than one original, then presume that they took home what they considered to be a “copy” and the “true original” is still in a safe place. (II) If there is a good reason why T didn’t get all originals, them maybe presumption would apply, but just very fact sensitive. 3) Photocopy is not an original. D) PARTIAL REVOCATION BY ACT 1) Some states do not allow a will to be partially revoked by act but only by a subsequent instrument. 2) Reasons for prohibiting partial revocation by act: a) Canceling a gift to one person necessarily results in someone else taking the gift and this new gift can be made only by an attested writing 27 b) Permitting partial revocation by physical act offers opportunity for fraud. Person who made the new gift may have been the one to make the canceling marks. 3) If partial revocation by act is not allowed, the will must be admitted to probate in the form in which it was originally executed in if such original language can be ascertained. 4) CA does recognize partial revocation by physical act. a) General rule: if there is partial revocation by act, the gift from the failed provision falls to the residuary clause and so not a new gift. b) Minority: Any partial revocation has to pass through intestate. c) Hypo: T executes a will that devises residue to four people. After T dies, her will is found and one of the four people’s names are crossed off and there is no evidence that T did it. What result in CA? (I) Valid partial revocation by using presumption doctrine: last in T’s possession and mark must have been made with T’s intent to revoke that gift. (II) Counter-argument: IF will found some years after T’s death, then assumes fraud. d) Markings made with pencil: Markings/changes made with pencils show no finality/intent to revoke b/c can erase or change it too easily. If done in pen, final. Analyze if in pencil. E) DEPENDENT RELATIVE REVOCATION DOCTRINE 1) If the T purports to revoke his will upon a mistaken assumption of law or fact, the revocation is ineffective (not valid) if the testator would not have revoked his will had he known the truth. So will could still be in effect. a) Estate of Alburn: (good example of DRR): Will #2 revoked b/c T thought in doing so will #1 would be valid. There was a valid revocation based on mistake of law. T would not have revoked #2 if she would have known it would not have made #1 valid. So, ignore revocation of #2 and apply DRR and #2 is valid. 2) Requirements for DRR: a) Valid revocation (I) By writing: Evidence of mistaken intent must be in the writing that revoked the first instrument (II) By act: Look to act it self to find the intent to revoke and the intent as to the mistake can be proven by any extrinsic evidence b) Based on mistake of law or fact (I) If revoked by writing: the mistake must be set out in the writing and the mistake must be outside/beyond the knowledge of the testator (II) If revoked by act: there must be evidence of a failed alternative scheme in order to continue and apply DRR (A) Failed alternative scheme is the scheme that you would use if give effect to revocation and don’t use DRR. Can argue that failed alternative scheme is not needed in revival so should not be needed here. 28 (B) Example: In will: “I give 100 to W.” I cross out 100 and put in 200. This change fails b/c it didn’t meet wills act formalities. Therefore, there is a failed alternative scheme b/c tried to give her 200 and couldn’t, so failed. c) Testator would not have revoked, if T had known the truth that he was mistaken (I) But for mistake, T would not have revoked: all mistake’s fault d) Therefore, ignore revocation and will is still in effect 3) Scope of DRR: a) Revocation by later writing: (I) Narrower when revocation by writing and need mistaken intent in writing (II) Usually mistake of fact b) Revocation by Act: (I) Broader when have revocation by act with failed alternative scheme b/c can take any evidence to prove mistaken intent. (II) Usually mistake of law F) REVIVAL DOCTRINE 1) Estate of Albun: (used to illustrate doctrine): T executes will #1. Later T executes will #2, which revokes will #1 by an express clause or inconsistency. Later T revokes will #2. Is will #1 revived? Two views: a) English View: Will is not effective until T’s death. The theory is that since a will does not operate until T dies, will #2 is not legally effective during T’s life. Will #1 is not revoked by will #2, and there is no true “revival” b/c will #1 has never been revoked. b) American view: Although generally a will is not effective to dispose of property until death, for purposes of revocation, a will is effective the moment of execution. With this view, will #1 is revoked by will #2 as soon as #2 is executed. c) Norm is that there is a prior instrument you are trying to give effect to. 2) CA Rule: §6123: American view is utilized: Will is effective upon execution for purposes of revocation. BUT must look as to how will #2 revokes the first will: a) If second will is revoked by act, there is no knowledge of intent as to if the first will should be revived, so will take any evidence as to T’s intent to revive will #1. (I) Party claiming revival has burden to show by preponderance of the evidence that there is intent to revive. (II) Intent won’t be presumed but will take any type of evidence. b) If revoked second will by a writing, Testator’s intent to revive the first will must be expressly stated in the writing that revokes the second will. VI) MORE WILLS ACT FORMALITIES: COMPONENTS OF A WILL A) INTEGRATION OF WILLS 1) Doctrine of Integration: All documents physically present at the time of execution that T intended to be part of the will are integrated into the will. First question to ask is how was later will revoked? 29 2) Usually only an issue where pages aren’t fastened, there is no internal coherence, pages are in different fonts or evidence that pages were unfastened. 3) Any problems can be prevented by having testator sign or initial the bottom of each page for identification. 4) Legal effect of integration: Becomes part of the will. B) REPUBLICATION BY CODICIL 1) A will is treated as re-executed as of the date of the codicil = general rule. a) Presumed that re-execution of the will is what we should do but if re-execution is not in the best interest of the parties, courts won’t re-execute the will. Usually reexeccutio is in favor of the parties and allowed. 2) If T revokes will #1 by will #2, and then executes a codicil to will #1, will #1 is republished and will #2 is squeezed out. C) INCORPATION BY REFERENCE DOCTRINE: CA Statute §6130 1) CA Statute §6130: A writing in existence when a will is executed may be incorporated by reference if the language of the will manifests this intent and describes the writing sufficiently to permit its identification. a) Document being incorporated must be a writing, but there is no requirement that the document be signed. b) The writing that will be incorporated must be complete on the date you incorporate it into the will. You can’t incorporate a document by referring to it and then later actually write the document you had earlier referred to. c) Burden is on the party trying to give effect to the incorporation by reference, and they have to prove that the document referring to was in existence when the will was executed. 2) Incorporation by Reference vs. Republication by Codicil a) Both require a pre-existing document, but Republication by Codicil requires that the underlying document be a valid will and incorporation by reference doesn’t. 3) Legal effect a) Legally doesn’t become part of the will. b) Written instrument is construed with the will but does not become part of the will. 4) Tangible Personal Property: UPC §2-513: Lets T incorporate by reference a document that is made after the will is made if only for the distribution of tangible personal property and if the will refers to the list and can change lists as much as you want. CA doesn’t recognize this at all. D) ACTS OF INDEPENDENT SIGNIFICANCE (non-testamentary acts): CA § 6130 1) Doctrine: If the beneficiary or property designations are identified by acts or events that have a lifetime motive and significance apart from their effect on the will, the gift 30 will be upheld – even if phrasing of the will leaves it in T’s power to alter the beneficiaries or the property by a non-testamentary act. 2) Requirements: a) Provision in the will b) Provision makes express reference to an act or event (I) Broad construction of what act means (II) Act or event occurs after execution of the will (III) Can be an event or act that the T has complete control over c) Act or event occurs outside the will d) Such provision controls who take the gift or the size of the gift (how much) 3) CA §6130: A will may dispose of property by reference to acts and events that have significance apart from their effect upon the dispositions made by the will, whether the acts and events occur before or after the execution of the will or before or after the testator’s death. The execution or revocation of a will of another person is such an event. 4) Hypos: a) Will says “I will give 3k to my research assistant when I die.” Don’t yet know who that will be. T has complete control over who it will be. The act is hiring a research assistant. Is this act going to be performed just to pick a beneficiary or to get a research assistant? The act will be performed so you have a good research assistant so gift is valid b/c has independent significance. b) T gives the contents of the right hand drawer of her desk to A. After the fact, T can change the gift b/c doesn’t say what is in the drawer. Should this be allowed? Act must have a lifetime motive that is significant apart from willing it to another: so if T put a ring in the drawer in order to keep it safe, this is different from putting it in drawer just to give it to A. Would have to look at other things in the drawer to see if one would put the ring there for it to be safe. c) Four kids. Dad doesn’t want to re-execute a will so adds to the will that he will give 1000 each to each son or daughter in law at his death. Who takes these gifts today? If there is no son or daughter in law when he dies then no one takes. Act is the marriage of the kids and this act has significance other than who takes under will. E) CONTRACTS RELATING TO WILLS: Under the law of contracts, the beneficiary does not have to survive the Testator and if beneficiary dies first, his contract right passes to heirs. Under laws of wills, beneficiary must survive the Testator and if the beneficiary dies first, the gift is void. 1) K to make a will: allowed as long as there is consideration and if beneficiaries under the K can prove the K, they take before will beneficiaries a) T makes a contract with A to leave everything to A if A will care for T. Can A take under T’s will even though K is rescinded? A will take and if T wanted to change the will then T should have revoked the will. To the extent that the estate may have a K claim against A, the estate has to take care of that outside the 31 probate proceedings. Recission of K doesn’t affect A taking only revocation of will would. b) A dies of AIDS. A’s roommate claims ½ of A’s estate. B alleges that A promised to leave B ½ of his estate if B cared for A for his life. B produces a document that B typed and A signed giving B ½. The K must be evidenced by a writing signed by decedent. Is B entitled to ½ of A’s estate? (I) Concern with respect to K to make a will: high potential for fraud especially if made oral K to make or not make a will. Creates lots of admin costs. (II) Terms of contract must be in writing signed by the decedent (III) B can take b/c there is a writing signed by the decedent that tells of provisions of K. (IV) If B was the spouse of A, that makes a difference b/c there is no need for a K b/c spouse already has a duty to care for other spouse and so if there is already a duty to care for spouse there would be no consideration given for the K. 2) K not to revoke a will a) Mom dies and Dad still alive and loves to fish. Kid doesn’t like it but dad says if kid goes fishing every week, dad won’t revoke his will that gives kid all. If dad revokes, can kid claim breach of K? (I) Equitable estoppel rule would apply b/c oral K. Kid could bring a claim of oral K. (II) Only time oral K cases are allowed is when such claims are b/t family members. There has to be performance by one party on reliance of the other’s statement. Here the kid fished b/c of what dad said. (III) CA enforces an oral K by equitable estoppel. b) Problems with Ks not to revoke usually arise when H and W executed joint wills. (I) Joint Wills: one instrument executed by two or more persons as the will of both. When one T dies, the will is probated and when the other dies, it is probated again. (II) Mutual wills: Separate wills of two or more persons that contain similar or reciprocal provisions. (III) Mirror Wills: Identical wills w/identical takers: H gives all to W w/residue to A. W gives all to H w/residue to A. (IV) Shimp: H and W executed joint will. Causes problems. • Potential issue as soon as see a joint will: mere execution of a joint will gives rise to a K not to revoke. Once the first spouse dies, does the other spouse have to keep will in place or can surviving spouse change it or make a new will b/c more likely surviving spouse will want to change it. • CA probate code: Mere execution of joint will does not give rise to K not to revoke or even a presumption of such a K. • Parties can put provisions in will that expresses intent to create a K not to revoke. Courts will give effect to it. Various types of joint wills 32 • If surviving spouse executes another will, that will is probated even though beneficiaries of first will may have a breach of K claim against the surviving spouse. If the beneficiaries won, they would take as creditors and would get before beneficiaries of the 2nd will. 3) CA Statute §150 a) A contract to make a will or devise, or not to revoke a will or devise or to die intestate can be established only by one of the following: (1) Provisions of a will stating material provisions of the contract (2) An express reference in a will to a contract and extrinsic evidence proving the terms of the contract (3) A writing signed by the decedent evidencing the contract b) The execution of a joint will or mutual wills does not create a presumption of a contract not to revoke the will or wills. VII) CONSTRUCTION PROBLEMS IN WILLS A) INTERPRETATION OF WILLS 1) Plain meaning rule: a) The plain meaning in a will cannot be disturbed by the introduction of extrinsic evidence that another meaning was in fact intended. b) Under the CL plain meaning rule, words are clear on their face and so no extrinsic evidence is to be introduced to prove another intent. c) Mahoney: T told her attorney that she wanted to give her property to her aunt and then 21 of her 1st cousins. Lawyer used the language “to my heirs at law equally.” When T died, her aunt got it all b/c the language lawyer used was wrong. Cousins sued b/c were denied recovery b/c court used plain meaning rule and the language used was the meaning of the will and no other evidence allowed in to show T had a different intent. 2) CA Statute Regarding Interpretation of Wills: §§ 21120-22: Rejects Plain Meaning a) The words of an instrument are to be given their ordinary and grammatical meaning unless the intention to use them in another sense is clear and their intended meaning can be ascertained. b) Technical words are used in their technical sense UNLESS (I) context clearly indicates a contrary intention OR (II) satisfactorily appears that the instrument was drawn solely by T and T was unaware of technical meaning. 3) Extrinsic Evidence Admitted a) Extrinsic evidence admitted if such evidence goes to the validity/execution of the will and NOT the construction of the will. (I) Any extrinsic evidence will be allowed in order to establish if the will is in fact valid and/or if the Testator complied with the Wills Act Formalities upon execution of the will. 33 (II) NO extrinsic evidence regarding the construction of a will will be admitted b/c of the concern of courts rewriting wills. The best evidence of Testator’s intent is gathered from the plain meaning of the will itself. b) Fleming: Testator wrote a will leaving all property to Mary. Properly executed. T dies and Mary wants to admit extrinsic evidence but according to plain meaning rule she can’t b/c there is no ambiguity as to will b/c can clearly understand that Mary is to get property. However, the evidence she wants to admit is the fact that T executed the will only to get Mary into bed. Evidence allowed in b/c goes to the validity/execution of the will and not the construction of the will. Goes to validity b/c T may not have held the requisite testamentary intent upon the execution of the will and so the execution would not be valid. 4) Latent v. Patent Ambiguity Doctrine: a) Latent Ambiguity: Ambiguity does not appear on the face of the will but appears when terms of the will are applied to T’s property or beneficiaries. Need extrinsic evidence to show latent ambiguity exists and to resolve the ambiguity. (I) CL: Extrinsic evidence admitted to show ambiguity exists and to resolve it. (II) CA: Extrinsic evidence allowed to show ambiguity exists and to resolve it. b) Patent Ambiguity: Ambiguity appears on the face of the will. No extrinsic evidence needed. (I) CL: No extrinsic evidence was needed to show ambiguity, so no extrinsic evidence is allowed to resolve it. (II) CA: Extrinsic evidence is allowed in if can show there is an ambiguity. c) What constitutes an ambiguity? (I) An express statement in a will that is susceptible to 2 or more reasonable interpretations. (II) Admit extrinsic evidence that is consistent with one of the possible reasonable interpretations. (III) Extrinsic evidence allowed in will consist of circumstances surrounding Testator at time of execution as opposed to testimony b/c of concerns of fraud. d) Analysis for patent/latent ambiguities in CA: (I) Show there is an ambiguity: patent or latent. (II) Admit extrinsic evidence consistent with one of possible reasonable interpretations. (III) Favor extrinsic evidence of circumstances over that of testimony. 5) Mistakes: a) Scrivener’s Error: No extrinsic evidence is allowed in when there is scrivener’s error. When the attorney errs and T signs the will, T is presumed to know and confirm contents. (I) Junior Republic: T executed a will that gave remainder to 7 charities. Later T changed the beneficiaries to 11 other charities. A change in tax law caused T to 34 tell his lawyer that the will must be changed to comply with the new tax laws. Attorney made changes for tax purposes but inserted the initial 7 charities as beneficiaries. The 11 charities sued b/c they should have taken but for the attorney’s mistake. (A) Charities must prove by use of extrinsic evidence that T intended the 11 to take but for attorney’s error: scrivener’s error. However, this can not be done b/c this argument goes to construction and not validation. b) Misdescription: Court can only strike the misdescription. The court can not put into the will the right information b/c don’t want courts rewriting wills. So, court strikes the misdescription and construes the remaining provisions in order to keep intent of testator alive. (I) T wills house at 300 Park Street to A but really owns 30 Park Street. Latent ambiguity. Court strikes the “300” and house at 30 Park will still go to A. c) Equivocation: Description in will fits two or more external objects equally well (I) Direct expression of the T’s intent are admissible in evidence to determine who was meant to take. (II) Oral declarations of T’s intent are also allowed. (III) Example: “To my grandson Charlie.” T has three grandsons named Charlie. Evidence is allowed of which Charlie T intended to give to. d) Personal Usage Exception: If extrinsic evidence shows that T always referred to someone in a certain way or an idiosyncrataic manner, the evidence is admissible to show that T meant someone other than the person with the legal name. (I) Example: T was a salesman. He sold pop to Mr. Owner who ran a store. Mr. Owner’s daughter worked there. T called her Mrs. Owner. When T died he left property to Mrs. Owner. The real Mrs. Owner, the daughter’s mother, was not allowed to take b/c that was not who the T intended to give to. e) Malpractice: (I) If lawyer drafts an ambiguous will, the lawyer is liable if the beneficiaries lose their legacy as a direct result of attorney’s negligence (II) Attorney is not liable for drafting an ambiguous will b/c don’t know if attorney’s fault or if it was the deliberate choice of the Testator B) DEATH OF BENEFICIARY BEFORE DEATH OF TESTATOR: LAPSE 1) Types of gifts: a) General Gift: The classic gift in a will, usually money. – “I give Mary $1000.” (I) If devise is a general gift that is not $$$, then the executor of the will has to buy the gift or pay the cost of the gift out of the estate to the beneficiary b) Specific Gift: A named, identifiable item. The gift can only be the item named and only one item from T’s estate fits the bill. – “I give my gold Gucci watch to Mary.” c) Demonstrative Gift: General gift from a specific source – “I give Mary 10k from my checking account at B of A.” d) Class Gift: “I give to all of my daughters equally.” 35 e) Residuary Gift: The rest of the estate – “I give my ring to A and everything else to B.” (I) If no residuary gift, then the rest of the property goes to intestacy. (II) If there is a residuary clause with multiple members and one passes before the testator, then it goes to other members of the residuary clause. f) Residue of the Residue: In CA, if there are two or more residuary clauses, and the first residuary clause fails, property passes to the residue of residue. g) IF all of the above gifts fail, the property goes to intestacy. 2) Lapse: The Devisee dies before the Testator but after the execution of the will, then the gift lapses. Taker must survive the Testator in order to take. Anti-lapse statutes substitute another beneficiary for the pre-deceased taker. a) There are four requirements for anti-lapse: (I) Lapse of gift/devise (II) Requisite degree of relationship must be met: Kin of transferor or related to kin of current spouse or former spouse of transferor (A) Anti-lapse DOES NOT apply to spouses b/c doesn’t meet degree of relationship requirement b/c a spouse is not a kin of T nor is T’s spouse kin of herself. (III) Survival Requirement: Does the intended Beneficiary (one who died) have issue who survived the Transferor? (IV) If meet the above requirements, the issue of the dead beneficiary takes the devise UNLESS there is an express intent to the contrary (A) Anti-lapse is based on presumed intent. Therefore, if there is express intent to the contrary then it doesn’t apply. b) What happens if the gift does lapse? Where does it go? (default rules apply only when the will does not provide for where gift goes) (I) Specific or general devise: If fails, falls to residue. Can apply anti-lapse. (II) Residuary devise: If residuary, gift will fall to other residuary beneficiaries and if no residuary, then to intestacy. “residue of the residuary”: if part of the residuary fails, it falls to the rest of the residuary clause. (A) Apply anti-lapse if meet requirements. (III) Class gift: In CA, anti-lapse is applied to members of the class who predecease T in order to save gifts UNLESS: (A) transferee’s death occurred before the execution of the instrument, AND (B) the transferor knows that person is dead at time of execution. (C) HYPO: T has four kids and make a will after one of them died. The residue clause says “I will my estate to my kids.” T doesn’t intend to include the dead kid in his will b/c knows that kid is dead. The devise would still be a class gift but don’t apply anti-lapse to such a situation. (IV) Void devise: Where is devise is dead at the time the will is executed, the devise is void. The same general rules govern the disposition of void devises as govern lapsed devises. Anti-lapse applies to all gifts and will substitutes if meet all reqs. w/the one exception. 36 3) Class Gifts a) When is a gift a class gift?: Question of T’s intent. It is a class gift when T intends to give it to a class. But how does one know T’s intent b/c T is dead. Very rarely will there ever be direct evidence that T wanted it to be a class gift. In absence of T’s intent, use the following factors to determine if it is a class gift or not: (I) Are takers named individually (non-class) or collectively (class)? (II) How was the gift devised? (A) Aggregate: Class (All the property of my estate goes to all kids equally) (B) Specifically: Non-class (Each kid gets 10 shares) (III) Common Characteristic of the class? (A) If a class, people named will share a common thing and so if people share common characteristic, then probably a class gift. (IV) Overall testamentary scheme 4) If see a gift failing, use the following doctrines to save it: a) Anti-lapse: any time see a gift failing, use this doctrine first to try and save gift whether it is void or lapsed. If this doesn’t work go to ⇒ b) Class Gift: Apply anti-lapse analysis before apply class gift UNLESS T knows of the death of the beneficiary prior to execution of the will containing the class gift. If this doesn’t work go to ⇒ c) Residuary Clause: If residuary, gift will fall to other residuary beneficiaries and if no residuary, then to intestacy. d) If nothing saves gift, gift will fall to intestacy. VIII) CHANGES IN PROPERTY AFTER EXECUTION OF WILL A) ADEMPTION BY EXTINCTION 1) RULE: When Testator disposes of property during his lifetime that he willed to someone in his will, the gift is extinguished regardless of T’s intent. a) Ademption only applies to specific gifts b) Extrinsic evidence to show testator’s intent cannot be used 2) Change in form vs. Change in substance Theory a) HYPO: Your will says “I give my Saturn to A.” You sell your Saturn and buy a Jaguar. Under this theory, the court will look at the facts and decide whether the change was in form or substance. (I) In this instance, the court could either say the testator meant to give A his car and the change was merely change in form. Meant to give his car no matter what kind of car it was. (II) On the other hand, the court may say b/c the cars are so different in value, it is a substantive change and didn’t mean to give him Jaguar but wanted to give him the Saturn and since don’t own Saturn, gift is adeemed. 3) Identity Theory a) Ascertain the identity of the item from the written item and see if it is still owned by the testator’s estate. If it is, then beneficiary gets gift and if not, devise is adeemed. 37 4) CA Statute §§ 21133-21134: Real Property a) Beneficiary is entitled to any money that may be owed to T at his death as a result of the sale of T’s property and any property that remains. (specific gift that was willed to beneficiary and T sells it) b) Beneficiary does not take any money already paid to T on the property, only the remaining balance c) EXCEPTION: If the conservator sells a specific item, then the beneficiary gets the full value of the asset regardless of any change in the property UNLESS conservator is terminated after the sale and T survives the termination by one year, then beneficiary takes nothing 5) CA § 21132: Stocks a) If transferor intended specific gift of stock rather than value of the stock, the B gets (I) as much of the stock that T’s estate has at time of death (II) any stock that T owned b/c the company split or merged or took some sort of action which increased or decreased stock for T (except giving T purchasing options b/c then not an action by company) (III) Dividends prior to death and not specifically given are not part of the stock gift. 6) The following are various ways to avoid applying ademption: a) Classify gift as general or demonstrative rather than specific – then ademption won’t apply b) Classify as a change in form instead of substance – like a stock split and gift stands c) Construe meaning of the will as of the time of death rather than as of the time of execution: “I give my car.” When wrote will, had a 1950 car and when died had a 1990 car. Don’t have the car that had when executed so just give car you have at death. B) EXONERATION OF LIENS 1) Bought a house and it has a mortgage on it. I will house to A and I die and house still has mortgage on it. Issue is whether A has to pay the mortgage? a) CA Modern Trend: CA Statute § 21131: Beneficiary takes subject to the debt. Beneficiary has to pay the debt. b) CL: Beneficiary doesn’t take subject to the mortgage and the estate pays the mortgage out of the residue c) If the will authorizes the personal representative to pay all debts from residuary, the gift of the house is still given subject to mortgage. Can opt out of giving subject to the mortgage and use CL rule by expressly putting such a provision in the will have states the estate has to pay the mortgage. C) SATISFACTION OF GENERAL PECUNIARY BEQUESTS 1) Applies when the T makes a transfer to a devisee after executing the will b/c was the transfer in satisfaction of the gift given in the will. a) Look at T’s intent. 38 (I) Did T intend for the money or whatever the transfer was to be given just to give it or was the transfer intended to be in satisfaction of what gave to B in the will? b) CA Statute § 21135:Modern Trend: Property transferred by T to B during T’s lifetime is satisfaction of the gift in the will if any of the following occur: (I) will provides that subtract life gift from the gift in the will OR (II) T declares in a contemporaneous writing that the transfer is to be deducted from testamentary gift or is in satisfaction thereof OR (III) Transferee acknowledges in writing that the gift is in satisfaction of the testamentary gift. c) Valuation: If life time gift is in satisfaction of death gift, property given during life is valued at the time beneficiary got it or at time of T’s death, whichever happened first. If there is a contemporaneous writing by Transferor or Transferee that states the value, that is the value of the property. D) ABATEMENT 1) Problem of abatement arises when the estate has insufficient assets to pay out all the gifts that T made in the will. a) Two ways to deal with this: (I) Everyone takes a pro-rata share (II) Some takers take and some don’t. 2) CA Statute § 21402: CA reduces (abates) some taker’s shares in a certain order a) Shares of beneficiaries abate in the following order: (I) property not disposed of by the instrument (II) residuary gifts (III) general gifts to persons other than T’s relatives (IV) general gifts to the T’s relatives (V) Specific gifts to persons other than T’s relatives (VI) Specific gifts to T’s relatives b) Takers at the top lose their share first or get it reduced in order to have enough to give to other devises. IX) WILL SUBSTITUTES: AVOIDANCE OF PROBATE A) CONTRACTS W/PAYABLE ON DEATH PROVISIONS 1) CL Rule: Payable on death provisions on only valid when in life insurance policies/contracts. If in any other instrument, the payable on death clause is invalid. 2) Modern trend: CA uses modern trend: §5000: ANY INSTRUMENT (not just contracts) that includes a 3rd party beneficiary payment on death clause is valid as a will substitute a) In CA, any instrument w/payment on death clause will then be treated under wills and trust law and not under K law and so the following occur: 39 (I) There is a survival requirement for the beneficiary (II) If the beneficiary is dead leaving an issue, anti-lapse analysis applies if meet other requirements 3) Changing Beneficiaries of Will Substitutes a) A will CANNOT change the beneficiary of the life insurance policy or any other will substitute. (I) This is deemed a Block Buster will and they are not recognized in CA. (II) If a will could change beneficiaries, there would not be immediate payment to the families as there otherwise is which is a great benefit to life insurance b/c doesn’t have to go thru probate. b) If want to change beneficiaries in a life insurance policy or other will substitute, usually that K will state the procedure for changing the beneficiary. Therefore, follow the procedure and that will result in a change of beneficiary. c) However, parties can contract to allow the Will to change beneficiaries in the will substitute. (I) Included in the K, there has to be EXPRESS REFERENCE to the payment on death clause that is in the will substitute in order for one to change beneficiaries by means of a will. B) MULTIPLE-PARTY BANK ACCOUNTS 1) There are three possible intentions that depositor could have when open a multiple party bank account: a) Joint Tenant Account: Both parties can draw on account and survivor of the two owns the balance of the account. b) Payment on Death Account: Only the person who opened the account can draw on account and the other party is only entitled to access the account upon the depositor’s death. At CL, this was an invalid testamentary transfer. Now, it is valid in CA. c) Agency/Convenience Account: Both parties are entitled to draw on the account, usually in order to take care of the depositor, but at death, the non-depositor is not entitled to the balance of the account. 2) To determine what kind of account it is and who gets the proceeds, one must examine the intent of the depositor. What type of account did the depositor intend to create? AT COMMON LAW: a) Extrinsic evidence as to depositor’s intent is allowed. (I) Take into account extrinsic evidence regarding not only the point in time in which the account was first created but also the subsequent actions of the depositor in order to ascertain depositor’s intent. (II) Look at later actions b/c those actions will coincide w/the depositor’s initial intent b/c one’s initial intentions will be manifested in later actions. Will act in accordance with primary intent. b) The court will look at the following factors to determine intent: (I) How the parties treated the account. 40 (II) Was the depositor in a bad state of health that he/she needed someone to care for them: infers an agency/convenience account. (III) Is there an attempt to change parties on the account? (A) If intended for it to be JT, can’t change parties b/c it is irrevocable b/c ½ interest in account passed immediately to other party. (B) If intended to be a payment on death account or agency account, account is revocable as there is no life interest. MODERNLY: CA STATUTE § 5301: a) Modern trend creates a presumption of intent and ownership. (I) Since this trend is only a presumption, if there is clear and convincing evidence to show a different intent, that intent rules and account is treated as the depositor intended it to be treated. b) In life, parties of the multi-party account have an interest in the account in proportion to their contributions to the account UNLESS there is clear and convincing evidence of a different intent. c) At death, there is a right of survivorship, so the surviving party is entitled to the account balance. Same as a payment on death clause and treated as such. C) JOINT TENANCIES IN LAND 1) Elements of JT: a) Right of survivorship: upon death of one JT, his interest vanishes and the remaining JT owns the property in its entirety. Since the decedent is not transferring anything to the other JT, there is no reason for such property to go thru probate. b) Equal and undivided ownership: this interest can not be revoked by either JT, and JT can’t be changed once made a JT c) Creditors can’t reach the dead JT – have to attach to his part during life or don’t get to it at all b/c gone at his death d) Mere execution of a will does not sever JT: a JT can not will his part to another. He would have to severe the JT into a tenants in common and then transfer his part. D) REVOCABLE DEEDS OF LAND 1) At CL, revocable deeds were seen as a way to get around wills act formalities 2) Modern Trend: CA: Revocable deeds are allowed. There is a possessary interest that is passed inter-vivos and so gift is not testamentary in nature. a) Example: O conveys BA to A for life, then to B and his heirs. (I) Classify: Life Estate to A, vested remainder to B. Vested at the moment remainder is ascertainable and here at the moment of conveyance. (II) This is not testamentary b) Example: O conveys BA to A for life, then to B and his heirs, unless A revokes (sells) the remainder before A dies. (I) Classify: Life Estate to A, Contingent remainder to B, not vested but its still a transferable possessory interest to B. (II) This is not testamentary. 41 E) DELIVERY OF GIFTS/DEEDS/ETC. 1) To be effective, a gift must be delivered. a) Personal property: Delivery may be had by handing over the object itself, or, if it is impracticable to hand the object over b/c of bulk or inaccessibility, the object may be: (I) constructively delivered: handing over something giving donee physical access or control (like a key) of the property given, or (II) symbolically delivered: handing something over that is symbolic of the object. b) Real property: Delivery requires a deed to be delivered. (I) IF the deed is not physically handed over to the recipient during the donor’s life, there could be problems. Sometimes it is ok though if donor executes a deed and says it is to go to recipient at my death and donor retains possession of the deed until that time. X) RESTRICTIONS ON THE POWER OF DISPOSITION: PROTECTION OF FAMILY A) RIGHTS OF SURVIVING SPOUSE 1) Spousal protection schemes a) Community property jx: Since each spouse legally owns ½, the surviving spouse is protected. CA is a CP state. CP property are any assets acquired during marriage with earnings acquired during marriage. Each spouse owns ½ and can do whatever with that ½ when that spouse dies. (I) Can’t take an elected share in CA b/c a CP state, however, one can put a spouse to an election. (A) HYPO to explain: H and W buy WA, BA, and GA with CP funds. H dies and wills all of WA to C, all of BA to P, and all of GA to K and the residue to W. Also include in H’s will is a provision that states “in the event that W claims her CP rights to CP assets, then W takes nothing under the will and the residue goes to Pepperdine.” This is putting spouse to an election and is allowed in California. (i) W can elect to take under the will or the CP share and then get nothing under the will. She has a choice. (ii) Such an election is not limited to only CP assets but can put a spouse to an election for any property in which the spouse has a property right in. (B) How clear must the intent be to show you are giving all of CP assets away and not just your share of the CP asset? (i) Presumption is that a spouse only intends to give away his or her share of the CP asset and not the entire asset. (ii) Therefore, intent of giving the entire CP asset away should be pretty express and clear. Implied elections were abolished by modern trend. (thinking you own it all and give it away and it wasn’t all yours to give away and thus implicitly putting spouse to election) b) Separate property jx: There is a forced share or an elective share. The surviving spouse can decide to take what decedent spouse gave to them under the will or elect to take under the statute which is usually 1/3 to ½. 42 (I) Historically, the surviving spouse would only get 1/3 to ½ of the probate property and the Uniform Probate Code changed this and applied forced share to all property: probate and non-probate = augmented estate. (II) The UPC has also enacted a sliding scale to determine the elected share. One no longer gets the 1/3 to ½ but the surviving spouse takes based on the number of years they were married up to 50% of the decedent’s property. (A) This combats any problems created when older people marry for the second time and die w/in a couple years of the marriage and then the new spouse would take most of the property and many thought that was unfair. However, the sliding scale applies to all marriages and not just second marriages. c) In addition to what surviving spouse can take if in the above jx, the surviving spouse also can claim benefits under the following: (I) Social Security: Right of survivorship in the surviving spouse. Deceased spouse can’t transfer interest to anyone else but the surviving spouse. This is a form of a public pension plan. (II) Private Pension Plans under ERISA: Right of survivorship but surviving spouse can waive right of survivorship but has to be in writing and there is a form that has to be filled out. (III) Homestead Exemption: Surviving spouse and/or kids can occupy the family home or farm free from claims of creditors for the life of the surviving spouse. Decedent can’t dispose of or will away the homestead so as to deprive the spouse of a place to live. One must invoke this benefit. Application process varies by jx. (IV) Personal Property Set Aside: Surviving spouse has the right to set aside certain tangible personal property so that the decedent can’t dispose of it and creditors can’t get to it. Varies by jx. Some jx limit the amount of the set aside. (V) Family Allowance: Probate court awards a family allowance for maintenance and support of the surviving spouse and family. Statute can limit the amount of time that family receives the allowance. Typically, families receive the money for one year but it can be longer if probate takes longer. This is done so family has money while assets are tied up in probate. 2) Migrating Couples: Couple lives in MO and H earns 100k = his SP. Move to AZ a CP state. There for a month and H dies. H’s will gives all property to Pepperdine. Who takes? a) General rule = Property is characterized by the laws of the jx where the parties were domiciled at the time the property was acquired. (I) W would get 0 b/c property was SP. House was bought w/SP funds so stays SP. b) Quasi-CP: If SP would have been CP if you had been domiciled in a CP state when the property was acquired, then that property is treated as quasi-CP and dispersed basically the same way as CP is. (I) Then in above scenario, if AZ recognized quasi-CP, W would get ½ b/c the SP would have been CP if they had lived in AZ when it was acquired. 43 (II) Not all CP jx have this classification. 3) Uniform Testamentary Disposition of CP at Death Act a) Prevents surviving spouse from “double-dipping” when move from a CP state to a SP state. (I) HYPO to explain: H and W life in CA. They put 100k in H’s name alone but still CP. Move to MO a SP state. H dies with a will giving to LuLu. Who takes? (A) Wife would get ½ of the 100k b/c CP plus she would get ¼ b/c of the elected/forced share and LuLu would get ¼. (B) However, with the Uniform Testamentary Disposition of CP at Death Act, W would only get the ½ of CP and not the elected/forced share. B) SPOUSE OMITTED FROM PRE-MARITAL WILL 1) CA Statute §21610: Decedent spouse failed to provide for surviving spouse in will b/c they got married after decedent executed his will and decedent never changed his will. The surviving spouse WILL take a share of decedent’s estate. Surviving spouse takes the following: a) ½ of the CP that belonged to decedent b) ½ of the quasi-CP that belonged to decedent c) A share of the decedent’s SP that is equal to the intestacy share that the surviving spouse would have received if there was no will; however, the share can’t be more than ½ of the decedent’s SP. 2) CA Statute §21611: The surviving spouse, not provided for in the decedent spouses’, will not take if any of the following occur: a) Decedent’s failure to provide for spouse in the will was intentional and such intention is apparent from the will b) Decedent provided for spouse by a transfer other than his will and decedent intended that the transfer be in lieu of receiving anything under the will and such intent is shown by decedent’s statements, from the amount of the transfer, or by other evidence. c) Spouse made a valid agreement waiving the right to share in decedent’s estate. C) CHILD OMITTED FROM WILL 1) CA Statute § 21620: T makes a will. T has a child or adopts a child. T dies w/o revising the will and the will doesn’t include the child. The omitted child shall receive a share in decedent parent’s estate equal to what child would have received if parent had no will. Child would receive his intestate share. 2) CA Statute § 21621: The omitted child will not take if any of the following occur: a) Decedent parent’s failure to provide for the child was intentional and such intent is apparent from will b) Decedent had one or more children and devised or otherwise directed the disposition of substantially all the estate to the other parent, therefore the other parent is impressed with the duty to care for the kids so child doesn’t need money to take care of him or her self. 44 c) Decedent parent gave kid something by means other than through the will and the transfer was to be in place of getting something under the will and such intention can be shown by decedent’s statements, amount of the transfer, or by other evidence. 3) CA Statute § 21622: If decedent executed a will and then died and never knew that he had another kid (so didn’t care for kid) or though that kid was dead, the child the decedent was unaware of can take. The child would receive a share equal to her intestacy share if decedent would have died w/o a will. D) PROFESSIONAL RESPONSIBILITY ISSUES 1) CL: Party claiming that they were damaged had to be in privity with the attorney and usually beneficiaries are not in privity with the attorney. 2) Modernly: Allow 3rd party beneficiary claims under contract and torts theories. No longer need privity. Assume that attorney has duty to beneficiaries as well as client. a) CA uses modern trend. 3) Hybrid approach: To have standing, one must be in privity or show from face of will that you were an intended beneficiary. XI) TRUSTS: CREATION, TYPES, AND CHARACTERISTICS A) INTRODUCTION TO TRUSTS 1) What do trusts do? a) Duration of Trust: Rule Against Perpetuities: Future interest must vest, if at all, in time period of any life in being at the creation of the trust + 21 years. Conceptually, trust could last for 90+ years. b) Function of Trust: Holds and manages property for a lengthy period of time c) Purpose of Trust: Multi purposes as opposed to one purpose for wills. As many purposes as you can conceive of are purposes for trust. Trusts are very flexible. Purpose of trust depends upon intent of creator of the trust. d) Essence of a trust: There is a split b/t holder of legal title and equitable title. 2) Participants of a trust a) Settlor/Grantor: transfers the property into the trust and decides who gets what, when, and how much. Grantor’s intent controls. Person who creates the trust. (I) IF trust is created by will, grantor can’t be trustee. (II) If trust created during settlor’s life, it is an intervivos trust (III) If trust is created by will, it is a testamentary trust b) Trustee: (I) Holds legal title of a trust (II) Owed fiduciary duty to beneficiary (III) Holds and manages property for beneficiary’s benefit c) Beneficiary: Holds equitable title of a trust (I) The equitable interest is split into life estate and remainder. d) Trust property = res = corpus 45 (I) There will be income from the trust property b/c the property is in the trust for a period of time, and trust property HAS to be generating income. (A) Income: money made from trust property (B) Principle: main transfer of property that makes up the trust and generates income 3) Intervivos trust a) Declaration of trust: settlor declares that he holds certain property in trust (can be oral or written if real property) (I) Settlor is the trustee (II) For declaration of trust of personal property, delivery of gift nor deed of gift is required, only need manifestation of intent to hold property in trust and so oral declarations allowed (III) For declaration of trust of real property, Statute of Frauds requires a written instrument, so oral declarations not allowed in this situation. b) Deed of trust: settlor transfers property to a trustee (I) Needed when settlor is not the trustee (II) Deed of trust or trust property must be delivered to trustee B) CREATION OF A TRUST 1) How do we create a trust? There is a two step process in order to have valid trust: a) Create the terms and conditions of the trust (makes receptacle in which property is held): declaration of trust or deed of trust is the receptacle as it contains the terms or conditions of the receptacle b) Transfer property into trust (funding) (I) How does one transfer property? (A) Deliver property (physical or symbolic) or execute deed c) Sometimes this process is together in one step: “I hold my glasses in trust for A” Declared terms of trust and set out the property which is to be included in the trust and so complete process and valid trust. 2) Requirements to Create a Valid Trust a) Intent to Create a Trust: (I) Need to show that grantor has manifested an intention to create a trust (II) No particular words are needed to create a trust (A) IF the property is given to one person for the benefit of another, that indicates a trust. Transfer property from A to B for C’s benefit (B) Percatory Trust: If the testator uses language that expresses a wish or suggestion that the property is devised should be disposed of by the devisee in a certain manner, but the language does not clearly indicate whether the testator intends to create a trust (with a legal duty to dispose of the property) or merely a moral obligation unenforceable at law. (III) Look at the totality of the circumstances to determine if there was intent, and need more evidence of intent if settlor is also trustee b) Necessity of Trust Property: FUNDING: 46 (I) Anything that can be classified as “property” can be used to fund a trust as a trust is not valid until funded; virtually any property interest (II) Future profits are not adequate property interests in order to fund a trust; however, present promise of future profits when coupled with other factors may be an adequate property interest which could fund a trust: (A) present ownership of the means of producing the profits creates a present interest in the profits to be produced (B) Once future profits earned, if treat the profits as though they are subject to the trust, there is a valid trust b/c intent to put them in trust and now actually put them in trust, so funds the trust. (Just temporal thing.) (C) No fraudulent intent: when settlor is also the trustee, evidence of intent needed to establish a trust goes up and the same with funding issues b/c settlor could lie about transferring the property c) Necessity of Trust Beneficiaries (I) Beneficiary must be ascertainable and definite so the trustee knows who the fiduciary duty is owed and who has standing to enforce the trust. Need to be able to distinguish (name) the beneficiaries from the public at large. (A) Giving property to “Friends” is too vague. (B) Unborn children can be beneficiaries b/c they will soon be able to enforce their rights (II) Honorary Trusts: The court has allowed honorary trusts when there is no beneficiary to enforce the trust. Similar to a percatory trust where there is no legal duty, but the goals of the settlor are noble so the court will try and give effect to the intent. Requirements: (A) Only used when trust fails for want of ascertainable beneficiaries (B) There must be a specific purpose for the trust: can hold trustee to a duty b/c know exactly what trust is for and what duty trustee has (C) Purpose of the trust is not illegal or capricious and the purpose is honorable. (D) Person appointed trustee must voluntary agree to carry out the trust, and trust is only valid as long as this “trustee” agrees to carry out the purpose, so if something happens to the trustee, the trust is over. (1) The general rule that trust doesn’t fail for want of trustee doesn’t apply in this situation. d) Necessity of Written Instruments (I) If the trust property involves real property or is in a will, there must be a writing. (II) Testamentary trust is always in writing b/c need to comply with Wills Formalties C) TYPES OF TRUSTS 1) Intervivos Trust: a) Created and funded during the settlor’s life b) Not subject to probate c) Need not be in writing unless deals with real property 2) Testamentary Trust: 47 a) Trust and its terms created by will and therefore must be in writing b) Goes to probate 3) Precatory Trust: a) Language purporting to create a “legally obligatory duty” is interpreted as just a gift w/a moral obligation to carry out the duties, but no legal obligation to carry out the duties. b) Not really a trust 4) Resulting Trust: Trust arises by operation of law in one of two situations: a) Used whenever a trust fails in whole or in part: the property is placed into a trust imposed on the trustee for the benefit of the settlor. If trust fails, property goes back to one who owned it = settlor. b) Purchase money resulting trust: Used when settlor bought something and put title in another’s name. (I) If that other person is natural object of settlor’s bounty, then presumption is that it was a gift, and settlor would have to overcome that burden. (II) If the person whose name the title is in is not the natural object of settlor’s bounty, then presumption arises that the settlor wanted that person to be trustee of the property and that is why settlor put his or her name on title. Therefore, impose a resulting trust and property would revert back to the settlor upon the trust’s failure. (III) EXAMPLE: If A buys BA and names B on the title and B is not the natural object of A’s bounty, presumption arises that A did not intend to make a gift but wanted B to be trustee. If presumption is not rebutted, B holds the title in resulting trust for A. c) No matter which situation a resulting trust is used in, the property reverts back to the settlor. d) Can’t be used if one party comes to court w/“unclean hands” so as to avoid a duty under law such as taxes, etc 5) Constructive Trust: Arise by operation of law and used to prevent unjust enrichment. If property is acquired in such a way that the person who gets the property is unjustly enriched, the court imposes a constructive trust and give property to whomever equity demands the property to go to which is usually the intended beneficiaries. a) Requirements: (I) Confidential relationship; fairly lose requirement as it does not even need to be a fiduciary relationship (II) A promise: express or implied (III) Transfer of property in reliance on the promise (IV) Unjust enrichment of the transferee b) Property returns to intended beneficiaries c) Can’t be used if one party comes to court w/“unclean hands” so as to avoid a duty under law such as taxes, etc 48 6) Semi-secret trust: a) Looking at words (face) of instrument and find evidence of a trust relationship but there are no beneficiaries identified. b) Patent ambiguity. c) Impose a resulting trust. 7) Secret trust: a) Looking at the face of the instrument, there is no mention of a trust relationship being formed b/t settlor and trustee. b) Latent defect. c) Impose a constructive trust. XII) REVOCABLE TRUST: every jx allows revocable trusts A) Settlor holding power to revoke 1) Farkas: Power to revoke did not make intervivos trust invalid. Even though Settlor was settlor, trustee, and life beneficiary, the trust was still valid w/power to revoke. 2) Silence as to Revocability: If make trust that is silent as to if trust is revocable or not: a) CL: Presumption is that the trust is irrevocable unless expressly make trust revocable b) Modernly: Presumption is that the trust is revocable unless expressly made irrevocable B) Trust instrument stating Revoking Method 1) Were the trust sets forth the specific method in which to revoke the trust, that method must be used for the revocation to be valid b/c settlor’s intent controls a) If trust instrument lists several ways to revoke, those listed ways are not exclusive as to what would constitute a valid revocation. The listed methods are merely possibilities of how one can revoke. Therefore, look to language used in trust to determine if method listed is exclusive or not. b) Modernly: If there is no method listed as to how to revoke, the presumption doctrine (last in settlor’s hands and can’t find it after settlor’s death, so presumed revoked) could apply to trust b/c revocable unless expressly made irrevocable in trust document. C) Delivery of Revocable Trust 1) If there is a clause in the trust document stating that the document and or trust property must be delivered to the trustee, if the settlor is also the trustee, execution of the trust is also delivery. 2) If settlor is not the trustee, independent delivery will need to be made. HOWEVER, in CA (and modern trend) there is no evidentiary difference b/t patent and latent defects, so extrinsic evidence is always allowed in to show a trust exists and who the beneficiaries are, AND constructive trust will always be the result so intended beneficiaries will get property. 49 XIII) DISCRETIONARY AND MANDATORY TRUSTS A) DEFINTIONS 1) Mandatory Trust: Trustee must distribute all the income. 2) Discretionary Trust: Trustee has discretion over payment of either the income or the principal or both. a) Discretion can be limited by ascertainable standard or completely up to trustee. 3) Spray Trust: Trustee has to distribute all income currently, but has discretion to determine who gets it and how much to each. Hybrid of mandatory and discretionary. Also known as a sprinkle trust. B) What do Beneficiaries of a valid trust want to know? 1) Beneficiaries want to know what they get and how much. a) Look to language of the trust to determine this as there are no default rules and settlor’s intent controls. 2) Beneficiaries want to know their rights in the income and principal of the trust and whether or not their interests are mandatory or discretionary. C) DISCRETIONARY TRUSTS: The focus is on the duties the trustee owes to the beneficiaries. The trustee has a legal obligation to the beneficiary with respect to the trust property which is split b/t the income (life estate interest) and the principal (remainder). 1) Duties trustee owes to discretionary trust beneficiaries: a) Trustee has to inquire as the beneficiary�