Estates and Trusts Spring 2008 Table of Contents I. Introduction to Estate Planning II. INTESTATE SUCCESSION A.

A. Share of Surviving Spouse [UPC and KSA] B. Share of Descendants: the below is the procedure for determining how to divide the prop. As such, if
theres a surviving spouse, must look at statutes mentioned above to remove spouses share from this pot.

1 2

1. 2. 3. 4.
[ ] = dead

Formula: [# of survivors] + [# of non-survivors w/ surviving issue] Per Capita = clean slate at each gen. level, all take equal. Per Stirpes = step into shoes of prior ancestor, split that share (trickling down effect) Systems: a. English Per Stirpes: apply formula at child level; C gen. takes per capita, others per stirpes. b. Modern Per Stirpes: apply at 1st gen. w/ survivor; that gen. take per capita, rest per stirpes. c. UPC 2-106: apply at first gen. w/ survivor; survivors at each gen. level take per capita.
Note: this is the one where theres an extra step to determine pot that drops down.

C. Share of Ancestors and Collaterals 1. Only comes up if decedent has no descendants (or at least none that survive)! 2. Systems: a. English Per Stirpes: apply at 1st gen. below comm. ancestor; they take per cap., rest per stirpes. b. Modern Per Stirpes: 1st gen. below comm. ances. w/ survivor; they take per cap., rest per stirpes. c. UPC 2-106: applied at 1st gen. below comm. ancestor w/ a survivor; each level takes per capita. 3. UPC 2-103: Shares of Heirs Other Than Surviving Spouse D. Treatment of Potential Intestate Heirs: The Simultaneous Death Act and Posthumous Children E. Factors Affecting Heirs Intestate Share [amt. / if receive at all] 1. Advancement: partial satisfaction of donees intestate share. a. Factor to considerwhether donor had legal or moral obligation to pay b. If deemed an advancement, donee can: (1) keep it, taking $0 from estate; or (2) share in estate,
allowing value of advancement to be brought into the hotchpot. [hotchpot = prob. estate + advncmt]

c. Multi-Generational Setting: if parent makes advancement to C who predeceases P, the advncmts

deducted from the shares of that Cs issue, but only if other children of P survive. Qualifications: i. Not bound by advancement if taking per capita (e.g., under UPC 2-106) ii. Not counted against donees descendants if UPC 2-109 applies, even if take per stirpes!

2. Release: full satisfaction of intestate share (forfeiting upwards) a. Decedent transfers prop. to donee, in exchange for donees release to any claim of Ds estate. b. If donee predeceases transferor, binding on donees descendants, unless they take per capita. 3. Assignment: prospective intestate heir xfrs prospec. intest. share to 3d p. (forfeiting outward) a. If xfr made prior to ancestors death not enforceable; unless assignment supported by consid. Assign. concerns b. If assignor predeceases ancestor, assignments not binding on issue arise only if made before ancest. dies c. Transfers made after ancestors death are always valid, even w/o consid. [b/c is a gift] 4. Homicide: in absence of statute, 3 ways law can handle: a. Apply intestate succession literally killer gets property [bad policy] b. Treat killer as if never existed k. doesnt get prop. [but bad b/c undermines intestate scheme] c. Constructive Trust Theory: k. holds prop. only as const. T for other intest. Heirs [best option] 5. Disclaimer: traditionally, cant disclaim intestate share, unless statute allows it. a. If allowed, gen. rule is to treat disclaimor as if he predeceased T [then gen. schemes apply]

i. Qualificataion if UPC 2-1106(b)(3)(A) applies, disclaimors interest passes to his issue,

rather than treating it as if he predeceased T (removes strategy concern)

III. WILLS A. Execution Requirements 1. Acknowledgment: used if T pre-signs; wit. must see sig. + T acknwldg. in pres. of all wit. together! 2. Presence Tests: line of sight [sees or was able to]; conscious pres. [comprehends w/ any senses wit. signed] 3. Sig. Order: T first; fallback 1 continuous transac. [if all in same room + w/in reasonable time] 4. Signature Requirements: a. Symbols qualify only if T had intent at outset symbol would = his signature.

i. Exception Doctrine of Ratification [p.8] b/c now T changed his intent. i

b. Stamp/Typedineffective; but, if stamp+symbol, maybe some evid. of intent. symbol qualify. III. Wills A. Execution Requirements [Continued] Signature Requirements c. Assistance [always valid; T doesnt have to request; only has to do some work] d. Proxy when T only observes [here must request proxy; presence required] e. Placement usually must be at bottom, even if not req., good evid. of Ts intent. f. Handwritten name, but no signature: not auto invalid, but Q of intent. If at bottom, rebuttable presumption T intended written name to operate as signature. g. Additions after Signature [issue only arises if jurisdiction req. sig. be at bottom of will] i. Added after T signedall above sig. valid, words below not unless merely admin./surplsg. ii. Added before T signedEntire will is invalid. 5. Disinterested Witness: interested witness = wit./devisee or spouse of devisee a. Gen. Rule: if any interested wit., entire will void (even if enough valid witnesses!) b. Basic Purging Statute: interest. wit. deemed to forfeit devise; will valid except for that devise. c. Super Purging Statute: forfeits only prop. in excess of either:
i. what would have received as would-be intestate heir [triple status]; or

ii. what would have received under prior valid will (if any). iii. Note: if either amt. is more, simply forfeit $0 b/c no concerns about undue influence.
d. Supernumerary Witness Statute: if enough valid witness w/o interested wit., treat
interested wit. as if never a wit. at all and, as such, she forfeits nothing. e. Disclaimers invalid for purposes of making a witness disinterested. 6. Attestation Clause: not req., but good b/c raise rebut. presum. all done correctly. a. Present Tense: signatures of witnesses presently acting as witnesses

7. Self-Proving Affidavits a. Past Tense: witnesses are pre-testifying that they did everything correctly. b. Not req., but raises conclusive presume. done right (but, non-procedural matters can be contested) B. Execution of Holographic Wills 1. Holographic Will: must be handwritten by T; no witness req. 2. 1st Gen. Statutes: entirely written, signed, and dated [even if word isnt essential] 3. 2nd Gen. Statutes: material provisions [tunnel vision approach only sig. and material provisions] a. Date is usually considered a material provision. b. Strip away all printed words, read only handwritten portion. 4. 3rd Gen. Statutes: material portions and extrinsic evidence allowed. a. Portions changenow, if date or introductory wording are printed, can still have probate C. Revocation of Wills 1. 3 Means of Revoking a Will: a. Revocation by Subsequent Writing *best method i. 2 Requirements: affirm. act by T [sign sub. will] unless valid proxy + intent to revoke.
ii. Must still meet will requirements for the jurisdiction [e.g., must have witnesses!] iii. Doesnt necessarily have to be a new doc. (e.g., writing on back of will may suffice) iv. 3 Forms of Writing: new will; codicil; doc. revoke prior will, w/o replace dispost. Provis

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v. 2 Methods of Revocation by Subsequent Writing: a. Express Revocation: best b/c Ts intent clear; can revoke 1, or blanket revocation. b. Revocation by Inconsistency: later in time prevails, revoke to extent inconsistent.
vi. When Subsequent Writing Takes Effect (Competing Views): a. Common Law [Majority]: will only takes effect upon Ts death. b. Ecclesiastical Approach: will takes effect on other wills immediately.

vii. Partial Revocation: all jurisdictions allow partial revocation by sub. writing. b. Revocation by Physical Act i. 2 Requirements: affirm. act by T to doc., unless proxy[request + presence] + intent to revoke.
a. No requirement of witnesses.

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ii. Burning/Tearing: by def., burn/tear doc., so dont need contact w/ words to revoke. iii. Cancellation: by definition, you cancel words. Thus, majority rule is that there must be
contact w/ words to revoke by cancellation
If part. revoke not recognized, probate entire orig. will.

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a. Exception UPC 2-507 [minority rule] no contact required for cancellation either.

iv. Partial Revocation: partial revocation by physical act only recognized in some states.
a. Qualification: if thorough (e.g., T cuts out of doc.), would probate rest of will anyway. III. Wills C. Revocation of Wills 1. 3 means of revoking wills [continued] c. Revocation by Operation of Law
No intent requirement; instead, will revoked upon certain events [marriage, divorce, kids] ii. Divorce: treat former spouse as if predeceased T; unless will says otherwise. a. Relatives of former spouse devises not revoked; exception UPC 2-804(b). 2. The Harrison Presumption i.

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a. 2 Factual Premises Trigger Presumption: i. Will last traceable to Ts possession; and ii. Upon Ts death, will cant be found or is found, but mutilated (torn, burnt, etc.) b. Presumption: T revoked will or, if found mutilated, destroyed w/ intent to revoke. [rebuttable] 3. Duplicate Originals: if 2d remains intact, Ts intent to revoke 1st, still carriers over. a. Harrison presumption still applies, but is stronger if duplicate not found in Ts possession. b. Effect of Unexecuted Copies: no legal significance! 4. Ratification: T can request proxy to revoke will; but, ratification here is not allowed where the
attempted revocation was invalid (e.g., T requests proxy, has intent to revoke, but not done in his presence)

5. DRR Dependent Relative Revocation a. Rebuttable Presumption: T wouldve preferred to reinstate Will 1, rather than die intestate. b. Threshold Question: Do we even need DRR to resurrect Will 1?

i. Was will 1 properly revoked? [partial revoke by physical act; or holographic wills recognized?] ii. Was Ts intent to revoke conditional? [only applicable to Formula 1] Intent Factors:
a. Material diff. provisions: if provisions in Will 1 and 2 materially diff., we presume
Ts intent was that Will 1 not continue to operate.

b. Physical Proximity of Wills: if found close together, shows act of revoking Will 1 was
second-will minded (so that we would apply DRR).

c. Time Gap: the longer the gap, the less likely Ts intent was conditional. c. DRR Formulas i. Formula 1: a. T revokes Will 1 b/c believes Will 2 will take its place [see cond. intent factors]; and b. Will 2 is invalid or was never made at all. ii. Formula 2: a. T is motivated to revoke Will 1 by a belief that turns out to be false; and b. Will 2 contains a reference to this mistaken belief. d. Reverse DRR: applies when later will is revoked w/ hope it will reinstate earlier will. 6. Revival: a. Premise: 1. Will 1; 2. Will 2, revokes Will 1 [either by express language or impliedly from inconsistent devises only]; (3) T revokes Will 2. b. Issue Raised: When T revokes Will 2, does it reinstate Will 1? c. 4 Views:

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i. English/CL View: no will takes effect until T dies. Thus, Will 2 never took effect, so
Will 1 remains valid (no need to revive at all)

ii. Instantaneous View (Ecclesiastical Approach): Wills take effect immediately. Thus, Will 2
did immediately revoke Will 1 so that, to reinstate, T must properly re-execute Will 1. iii. Liberal, Instantaneous View: Wills take effect immediately (like Instantaneous in this way) so that Will 2 did revoke Will 1; however, when Will 2 is revoked, raises rebutttable presumption that Will 1 should be reinstated b/c was Ts intent (no requirement to re-execute). iv. UPC 2-509 a. (a) If W2 wholly revoked W1, raises presumption W1 remains totally revoked; however, if rebutted with evidence of contrary intent, W1 is reinstated. b. (b) If W2 partially revoked W1, raises presumption W1 is reinstated; however, if rebutted

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with evidence of contrary intent, W1 remains partially revoked. (c) If W2 revoked W1, either in whole or in part, and later, W2 is revoked by W3, raises presumption that W1 remains revoked; however, if rebutted by language in W3 that says T intended for W1 to be reinstated, W1 is reinstated.

III. Wills [continued]

D. Components of a will: 4 docs.help determine what will comprises 1. Integration: when papers are integrated into the original will a. Requirements:

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i. Physical Presence: papers must have been in existence at time of execution [see factors] ii. Intent: T must have intended papers to be part of the will.
a. If physical presence is established, raises rebuttable presumption of intent. 2. Republication by Codicil: under doc, will treated as is executed on date of codicil. a. To be valid, codicil must refer back to will w/ reasonable specificity. b. Codicil can effectively re-execute prior will that was missing req. formalities. 3. Incorporation by Reference: outside, indep. writing can be incorporated into will by reference a. Requirements:
Outside doc. must have been in existence at time will is executed a. *remember, codicil may have effect on a doc. to make it so that it was in existence. ii. Will refers to outside doc. in present tense (as being in existence). iii. Will refers to outside doc. w/ reasonable specificity. iv. NOTE: outside doc. doesnt have to be signed by T under doc. of incorp. by ref. b. List Statute Exception UPC 2-513: has the following deviations from incorp. by ref.: i. Can dispose of tangible pers. prop (other than $) by statement written before or after will; ii. Will must refer to writing, but doesnt have to refer to it as being in existence at exec. time; iii. Writing must be signed by T. i.

4. Independent Legal Significance a. Doctrine allows an external event, condition, or doc. to ID a devise or devisee under will. b. Test: external event/doc. must be non will-minded.

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i. Container Contents: more likely to work w/ locked container that only T has access to. ii. Anothers Will: usually treated as an event w/ independent significance.
c. List Statute Effect: also effect indep. legal sig. doctrine by deviating from requirements. E. Lapsed and Void Devises: death of devisee before death of T. 1. General Rules: a. Rule of Lapse [Trad. Rule] if devisee predeceases T, devise lapses and goes back to Ts
estate either as residue or, via intestacy to Ts intestate heirs.

b. No Residue of a Residue Rule [Minority, CL Rule] if a residuary devisee predeceases T,

that devisees share passes to Ts intestate heirs. i. If 2 Residuary Ds live D frozen at 1/2 and deceaseds share passes via intestacy. a. Exception most states treat 2 residuary Ds as joint tenants w/ right of sship. i. BUT, if T says 1/2 residue to A, 1/2 to B diff. result. c. Class Gifts class members treated as joint tenants w/ right of survivorship. d. Void Devises [CL Rule]if D dead at time will executed or ineligible taker, devise void. i. As w/ lapse, void devise remains w/ T either as residue or passes via intestacy. 2. Anti-Lapse Statutes keep devise from lapsing (dont apply to void devises). Typically, give devise to devisee in the person of his or her surviving issue. a. IF Clause: devisee predeceased T, related to T (usually kids); left surviving issue. i. UPC 2-605 If Clause Variation g-parent or lineal descendant of Ts grandparent. b. Exception: Words of Survivorship: T can negate anti-lapse by req. D to survive T. i. UPC 2-603 (1990 revision of 2-605) mere words of sship in sufficient! ii. Common Accident Issue Solution? Gift Over Clause + Defining Sship 3. Class Devises: gift of lim. sum to body of pers. uncertain in # & ID at time made. Will split equally. a. Qualification even if T mentions group of specific names, may still qualify as class gift if T gives finite sum to them w/ intent the $ only go to survivors. b. Class gifts never lapse. Negates no residue of a residue rule.

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i. Anti-Lapse Statutes DO Apply! although doesnt technically lapse, if the If Clause is met,
a class members share may remain with that member in person of her issue.

F. Changes in Property After Execution of the Will 1. Identity of Devises a. Specific Devise: spec. item, distinguishable from rest of Ts estate. b. General Devise: spec. value, but not of particular item distinguishable from rest of estate. c. Demonstrative Devise: payable first from particular source, then out of Ts gen. estate.
III. Wills F. Changes in Property After Execution of the Will [continued]

2. Ademption by Extinction 18 a. Identity Theory [maj. rule/applies on exam]: Ts estate doesnt contain spec. item, devise adeems (fails) b. Only applies to Specific Devises. c. Applies regardless of Ts intent, but can be preempted by express language. d. Circumventing Ademption by Extinction ways courts get around rule. 19

i. Replacement Rule: construe will at time of death [rather than execution]

a. Stmt. of Ruleat death, is there something in estate that matches the devise? b. Exception: Intent can be used to negate rule so there is ademption, but this is only in
the minority of jurisdictions that apply the intent theory

e. UPC 2-606(a) [KS] 3. Accession: when gift increases in val. Post-execution but pre-death a. If merely appreciation in value of item, devisee gets increased value.

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i. E.g., interest on bond, interest on debt owed (Cs right), growing crops. on real prop.
b. If increase = generated income, devisee doesnt get increase (regarded as diff. from gift).

i. E.g., bank interest on flat sum of $, interest on amount due on debt, harvested crops.
c. Stock Dividends: stock div. declared during Ts life dont go to devisee. [treated as income] d. Stock Splits: addtl stock gen. from stock split goes to devisee. [treat as apprec. of stock itself] 4. Ademption by Satisfaction 21 a. Only applies to General Devises. b. Raises rebut. presum.T indented intervivos xfr. as early satisfaction (whole or part) of devise. 5. Exoneration of Liens: devisee receives prop. free of mortgage, whats left pd. out of estate assets. a. Exception UPC 2-607 reverses presumption. T can negate w./ specific language. 6. Abatement [rules are fallbacks if will says otherwise, follow instructions in will instead] a. Premise: issue arises when estate has insufficient funds to pay all debts and devises. b. Trad. View: pers. prop 1st, then real in following order: intestate; residue; general; specific. [8 rounds] c. Modern View: both real & pers. prop in following order: intestate; residue; general; specific [4 rounds] d. KS View: intestate [pers.]; int. [real]; residue [pers.]; res.[real]; gen. [both]; specific [both] [6 rounds] e. Under all views, abate final category pro rata. 22 f. Treatment of Demonstrative Devises: 1st clause = specific devise; 2nd clause = gen. devise. G. Restrictions on the Power of Disposition: Ts ability to devise how wishes, sub. to some limits! 1. Rights of Surviving Spouse a. Community Prop. System: income earned during marriage belongs to both. b. Separate Prop. System: income each earns is their own. Surviving spouse has some stat. rights:
i. ii. iii. iv. Homestead: right to family home for life. [court can limit homes / acreage] Pers. Prop. Set Aside: right to certain pers. prop items, up to X value. Family Allowance: right to maintenance. Usually only 1 year. Dower and Curtesy: a. Dower = widow gets 1/3 LE in land. (only gets upon Hs death) b. Curtsey = widower gets LE in all wifes assets (gets immediately, but upon birth of kid).

c. Elective Share UPC 2-202 i. Mechanics of Calculating and Satisfying Elective Share Amount ii. Effect of Waivers: enforceable, so long as not fraudulently executed 2. Rights of Omitted Spouse [statutes only apply if we have a post-execution marriage] a. Omitted Spouse Statute: entitled to what wouldve received had decedent died intestate b. Omission of Generic Spouses dont qualify as an intentional omission of this spouse

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c. Rights of Omitted Spouse under UPC 2-301

i. Note that the statute even contemplates will that does mention spouse.
3. Rights of Omitted Issue a. Permitted Issue Statutes: allow kids born post-execution to take as if T died intestate.

i. Codicil Issue: if born post-execution but pre-codicil that republishes will, regarded as being
alive when will was first written! As such, cant invoke permitted issue statute!

ii. Disinheriting Issue: unlike spouse, T can disinherit kids. Stop gaps issue down chain as well.
a. BUT, stop gap doesnt work up so if T disinherits GC, C can invoke perm. issue stat. III. Wills F. Restrictions on the Power of Disposition [continued] b. Rights of Omitted Issue under UPC 2-302 IV. TRUSTS A. Creation of a Trust [elements] 1. Intent to Create a Trust: derived from express language and surrounding circs. 2. Necessity of Trust Property: trust cant exist w/o trust property. a. Mere expectancy cant be subject matter of a trust would need to made 2d declaration. 25 27 28

i. A contract is more than a mere expectancy

b. The Issue of Profits:

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i. Profits from trust okay b/c are income, but cant create a trust from profits not yet in existence.
3. Necessity of Trust Beneficiaries: 1 or more beneficiaries, IDd w/ reasonable specificity! 4. Necessity of Written Instrument: a. Gen. Rule: SOF requires intervivos trust of real prop to be in writing; pers. prop. can be oral.
However, there are situations where, though the oral agreement never created valid trust to begin w/, law steps in to save the trust. b. Oral Inter Vivos Trusts of Land: here, no SOF issues b/c trust created by operation of law. i.

i. Resulting Trust: arises in only 3 situations:

a. Failure to Create Express Trust: e.g., b/c beneficiaries not IDs specifically. b. Failure of Express Trust to Dispose of All Trust Prop. c. Purchase Money Resulting Trust ii. Constructive Trust: typically comes up in these situations (but not only) a. Prop. Obtained by Fraud: must have fraudulent intent at outset b. Abuse of Confidential Relationships c. Property Obtained by Homicide c. Oral Trusts for Disposition at Death: S chooses to dispose of prop. in particular way based,
in part, on her reliance on Ts oral promise.

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i. Secret Trusts: Will: to T + Oral: in trust for B = Constructive Trust to B.

a. Extrinsic evidence allowed to present evidence of the trust (higher BOP) ii. Semi-Secret Trusts: Will: To T in trust + Oral: for B = Resulting Trust. a. No extrinsic evidence permittetd. B. Discretionary/Spendthrift Trusts 1. Rights of Beneficiaries to Distributions a. Support Trusts: need dictates floor and ceiling. b. Discretionary Support Trusts: need dictates ceiling only. 2. Rights of Beneficiaries Creditors: w/ mandatory trust, C can get in line, w/ discretionary trust,
however, C cant get in line. Instead, distribution by distribution basis, only when T exercises discretion!

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a. Gen. Rule: Discretionary clause bars creditors, even super creditors b. Spendthrift Trusts i. 3 Forms of Spendthrift Clauses: no assignments; no attachments; both. a. Qualification: attachments language alone is invalid (violates pub. policy)

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ii. Effect of Clause Cs can only go after assets after distribution made.
iii. Generally, Spendthrift Clauses Enforced. a. Exceptions: child support and alimony; tort claims; fed. govt; necessities. i. Unless state statute to the contrary/speaks exclusively on issue. Self-Settled Asset Protection Trusts: cant setup spendthrift or discretionary trust for yourself.

c.

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C. Termination of Trusts 1. Gen. Rule: once trust established, is irrevocable. 2. Exceptions: a. Consent of Settlor and All Beneficiaries. b. Claflin Doctrine: if no material purpose is undermined and all beneficiaries consent.
i. Material Purpose = spendthrift clause, support trust; discretionary trust; age requirements.

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D. Revocable Trusts: Settlor can revoke trust (exception to gen. rule) if: 1. Express language reserved power to revoke; and 2. Settlor follows procedures he put in the document to revoke it.
IV. Trusts D. Revocable Trusts [continued] 3. Potential Issue: Did S retain too many rights so that its really an attempted will? a. Gen. Rule: Settlors have a lot of leeway to retain many powers, and still have valid trust. i. Objective: look at rights retained, and if too substantial, not Ss intent/motive for retaining. b. Elective Share: though have a lot of leeway, will we regarded as invalid when elec. share at stake? i. NO Sullivan approach. (even if Ss intent was to circumvent elec. share!) ii. YES Newman approach. (but, only invalid to extent necessary to provide for spouse) c. Spendthrift Trust for Yourself = Over Retention. Thus, assets belong to estate when you die.

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4. Mechanics for Revoking Trust a. Must be done in accordance w/ methods prescribed in trust doc. itself. b. No Harrison Presumption w/ Trusts. E. Pour-Over Trusts: T of will wants assets of estate to pour-over into an existing intervivos trust. 1. Incorp. by Reference [Minority]: will incorps. by ref. trust instrument in existence at time will executed! 2. Independent Legal Significance [Majority]: will can dispose of prop. by referring to intervivos trust
that disposes of assets xfrd. to trust during life (act that has sig. apart from disposing of trust assets).

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3. UPC 2-511: validates pour-over of probate assets into intervivos trust executed anytime. F. Charitable Trusts: 1. Valid, Charitable Purpose Required see list on p..34 and examples on p.35 2. Cy Pres Doctrine a. If purpose becomes impracticable or obsolete, ct. can select alternative close to Ss intent. b. Exception? if Ss intent was all or nothing. c. Discriminatory Trusts: cy pres can be used (unless all or nothing intent). 3. Enforcement/Supervision of Charitable Trusts G. Powers of Appointment 1. General POA: exercisable in favor of others, donee, her estate, Cs, or Cs of Ds estate. a. Fallback Presumption if doc. doesnt specified, assume its general power. 2. Special POA: exercisable only in favor of others. 3. Release of POA voluntary release of POA. Assets go to TiD or, if no TiD, to Donor. 4. Exercise of POA a. Exercise by General Residuary Clause in Donees Will:
i. Majority Rule: gen. clause does not exercise POA, whether power is general or special. ii. Minority Rule: gen. residuary clause does exercise POA if gen. power, but not special. a. New York Variation: can also exercise special power if devisees are also objects. iii. UPC 2-608: gen. res. clause exercises POA only if either: a. No TiDs; or b. Ts will manifests intent to include prop. subject to POA (blanket clause insufficient) iv. Donor can always require specific reference. a. Here, using a blending clause insufficient b/c not specific. UPC 2-704. v. Effect of Anti-Lapse Statute: most courts extent anti-lapse to cover general powers.

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b. Limitations on Exercise of Special POA i. Restatement 2d Prop: Donative Xfrs. 19.4 ii. Sub. Category of Special Powers: Exclusive vs. Non-Exclusive Powers a. Exclusive (Rst. fallback presumption) donee can exclude entirely 1 or more objects. b. Non-Exclusive donee must appoint some amt. to each object. i. Majority Rule: can in essence exclude by giving only nominal amt.

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ii. Minority Illusory Appointment: each obj. must receive sub. amt. c. Fraud on Special POA appoint.in favor of non-object (or by circumvention) = fraud d. Ineffective Exercise of Power: 2 doctrines that can save an ineffective exercise of POA: i. Allocation of Assets [Special Powers] ii. Capture [General Powers] 5. Failure to Exercise POA a. General POA goes to TiD or, if none, to Donors estate. b. Special POA TiD; or, if none, Potential Objects (equal shares); or Donors estate. H. Duties of the Trustee

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ESTATES & TRUSTS DeLaTorre, Fall 2011

I. Introduction to Estate Planning A. Probate Process: process by which a court makes one of two decisions with regard to an estates assets: 1. the decedents assets should be disposed of via a valid will (either to all or some of the assets); OR 2. the decedent died intestate and, as such, the assets will pass via intestate succession per that states intestate succession statute. B. Functions of Probate: probate performs three functions: 1. it provides evidence of transfer of title to the new owners by a probated will or decree of intestate succession [documentation of title]; 2. it protects creditors by requiring payment of debts; and 3. it distributes the decedents property to those intended after the creditors are paid. C. Probate vs. Non-Probate Property 1. Probate Property assets disposed of by the decedent, upon his or her death, either under the decedents will or, in the absence of a will, by the intestate succession statute. 2. Non-Probate Property assets disposed of in a particular way because of some pre-death transaction/arrangement rather than by will or intestate succession. The transfer is triggered by the decedents death, but the assets are not probate assets. Sometimes called will-subs or willsubstitutes b/c resemble wills, but proper name is non-probate transfers. Examples include: a. Life insurance b. Joint tenancy c. Pay-on-death provisions d. Intervivos trust provisions e. Life estate remainder estates D. Probate Procedure 1. File Petition: can be filed by any interested party, including devisees, creditors, executor (if will), or would-be intestate heir (if no will). a. Will = Petition for Probate b. No Will = Petition for Administration c. Statute of Limitations Considerations: i. KS 59-617 6 months following decedents death unless someone fraudulently conceals the will in which case the 6 months begins when the interested party should reasonably have discovered the existence of a will. ii. UPC = 3 years. d. Nonclaim Statutes: time limit within which creditors must assert their claims against the estate. Unlike SOL statutes, time is triggered by notice (rather than decedents death). i. Kansas Cs claim must be filed w/in 4 months following official notice by publication. 2. Personal Representative (PR) Appointed by the Court a. Will = PR is called an Executor b. No Will = PR is called an Administrator 3. Notice of Hearing: given to potential heirs, devisees, and creditors. 4. PR Authorization Granted by Court a. PR is authorized by the court for various duties; however, these must be approved by the probate court following a hearing. b. Such duties include: inventory/gather decedents assets, manage assets during administration until final distribution, pay creditors (including payment of taxes), distribute assets to devisees. 5. PR Files Petition for Final Settlement and Approval of Accounts *again, requires notice. 6. Court Discharges PR: after a hearing for final settlement and approval of accounts, the court discharges the PR if it approves the accounts done by the PR. E. Contesting a Will 1. Anyone with a pecuniary interest in the will may contest.

2. Must be done during the probate process (before PR is discharged). 3. Kansas: a. 59-2225: will must be contested before probate process is over. b. Caveat: 59-226: if the will is being challenged on the grounds that it was superseded by a later will, KS allows for the competing will to be presented, even after probate process is over. c. Question Remaining: Does 59-617 (provision requiring claims be brought w/in 6 months following decedents death) still apply? still unanswered. II. Intestate Succession A. Intestate succession statutes apply in 3 circumstances: 1. Total Intestacy: decedent dies without a will; 2. Partial Intestacy: decedent has a will, but it doesnt dispose of all of his or her assets. The statute will apply to those assets that are untreated by the will; and 3. Will or trust itself calls for application of the intestate statute. [to my intestate heirs] B. Share of Surviving Spouse 1. All statutes provide for surviving spouse and typically spouse gets all assets if there are no issue. [Issue = direct lineal descendents kids, grandkids ... *Issue & descendants are synonymous]. If there are issue, typically the spouse gets 1/2 and issue get the rest. 2. UPC a. 2-102(1) spouse gets entire estate: i. (i) if no surviving issue and no surviving parents of decedent; OR ii. (ii) if all decedents surviving issue are also the surviving spouses issue and visa versa. b. 2-102(2) spouse gets the first 200K, plus 3/4 of the balance if no surviving issue of decedent, but a parent of the decedent survives the decedent. c. 2-102(3) spouse gets first 150K, plus 1/2 of the balance if all of the decedents surviving issue are also the surviving spouses issue, but the surviving spouse has additional surviving issue that are not issue of the decedent. d. 2-102(4) spouse gets first $100K, plus 1/2 of the balance if one or more of the decedents surviving issue are not issue of the surviving spouse. 3. Kansas 59-504508: if decedent is survived by spouse and issue, spouse gets 1/2 issue get 1/2. If surviving spouse, but no issue spouse gets all (and visa versa for issue, but no spouse). C. Share of Descendants [a.k.a. Issue] 1. Terminology a. Per Capita = Clean slate at the particular generational level, everyone takes equal. b. Per Stirpes (By Right of Representation) = Keep vertical lines intact. Each person at a particular generational level steps into the shoes of his or her prior ancestor and split whatever that ancestor would have taken had he or she survived. 2. Formula: # of survivors at a particular generational level + # of non-survivors w/ surviving issue. 3. Three Main Systems [see handout] states choose one of these three systems a. English Per Stirpes prior generation focused; keeps vertical lines intact. i. Formula apply at Child Generation always ii. C generation takes per capita, all others per stirpes b. Modern Per Stirpes hybrid; per capita w/ representation. i. Formula apply at first generation with a survivor See CN_3 for ii. First generation w/ survivor takes per capita, everyone else takes per stirpes. sample problems iii. General Rule: when we have at least one survivor at the child level, will get the same result under both the English and Modern Per Stirpes systems c. UPC 2-106 a.k.a. per capita at each generation. Not prior generation focused. i. Formula apply at first generation with a survivor ii. Survivors at each generational level take per capita. 4. Stop Gap Rule once a surviving descendant gets something, its a stop gap for any other issue on down that particular chain.

5. In-Laws treat in-laws as if they dont exist for purposes of intestate succession. *But, watch out for fact problems that may involve the Uniform Simultaneous Death Act (see below). D. Share of Ancestors and Collaterals 1. Most statutes prefer issue (vertical heirs, going downwards), so if there are any issue, they stop gap the collaterals and ancestors from taking anything. Thus, any question of collateral/ancestors will only come up when there are no issue. 2. Terminology: a. Ancestors those who came before you in your direct, vertical line [upwards, instead of downwards for issue/descendants, meaning, parents, grandparents, great gps, and so on] b. Collaterals someone who is related to you merely b/c you have an ancestor in common. Common ancestor must be the same person, but need not have the same title to each of you. i. Brothers or sisters your parent is the common ancestor ii. First cousins your grandparent is the common ancestor. 3. Ranking Collaterals: [see Table of Consanguinity on p.93] Q: as between two, competing collaterals, who is closer? Q2: will a further removed collateral still take by representation? a. Step 1: starting w/ decedent, count upwards until you reach the common ancestor. See CN_4 for b. Step 2: pivot and turn downward to the collateral in question. sample problems c. Step 3: repeat for competing collateral. Whoever has the lower # is closer to the deceased. 4. Three Systems As Applied to Collaterals a. English Per Stirpes i. Formula apply to first generation below the common ancestor b. Modern Per Stirpes i. Formula apply to first generation below the common ancestor with a survivor ii. If survivor at bro/sis level, then result will be same as result reached via English method. c. UPC 2-106 i. Formula apply to first generation below the common ancestor with a survivor 5. UPC Shares of Heirs Other Than Surviving Spouse: Any part of the intestate estate that doesnt pass to the decedents surviving spouse, or if there is no surviving spouse, the entire estate, passes in the following manner: [see p.61] a. 2-103(1) to the decedents descendants by representation; b. 2-103(2) if there is no surviving descendant, to the decedents parents (split b/w if both alive, See CN_4 and or all to one if only one alive); handout for c. 2-103(3) if no surviving descendant or parent, to the issue of the decedents parents or either sample problems of them by representation. d. 2-103(4) if none of the above, but decedent is survived by one or more grandparent or descendants of his or her grandparents, half of the estate passes to the decedents paternal grandparent (or their descendants), and other half to maternal side. i. But, if above doesnt apply on either maternal or paternal side, the entire estate passes to the decedents relatives. ii. Note that the furthest we go is grandparents for the common ancestor, so if only related by great grandparents, the collateral heir gets nothing! E. Uniform Simultaneous Death Act 1. The beneficiary is required to survive the donor by 120 hours [5 days]. Otherwise, is deemed not to have survived the donor. 2. To rebut this presumption (if more than 120 hours, or a question), must do so by clear and convincing evidence. F. Posthumous Children 1. Presumptions: a. If you are born no more than 280 days after the death of your alleged father, we presume you were in gestation when he died. b. If you are born more than 280 days after his death, we presume that you were conceived after your alleged father died. This is, however, a rebuttable presumption (burden is on the child).

2. If you were in gestation, you are deemed to have been alive at that particular moment in time. 3. Thus, if X devises to my children who are alive when I die and X has 2 children A and B who are 6 and 8 years old and child C who is born 279 days after X dies, all 3 children get equal share. G. Advancement = partial satisfaction of your intestate share. 1. An advancement is, in effect, a prepayment of the donees intestate share. 2. Threshold Q: what was the decedents intent with regard to this transfer? Overall, is a jury Q to be derived from all of the circumstances. A factor to consider is whether the parent had a legal or moral obligation to transfer this property. E.g., a. Tuition payments, but only for grades K-12 [thus, payment for law school = advancement]; b. Payment of medical expenses; c. Size of the transfer [larger the amount, more likely it is treated as an advancement] 3. Basis for Doctrine: we assume that parents want to treat all children equally in the long run. 4. Mechanics: a. If a transfer is deemed an advancement, the donee has two options: i. Walk away keep advancement, but get nothing from estate (b/c theres no duty to repay it even if its more than what the donee would have received under the estate); OR ii. Share in the estate and allow the value of the advancement to be brought into the hotchpot See CN_5 for b. Donees decision will be determined by his advancement versus his share of the estate after it is sample problems augmented by the advancement. c. Hotchpot = probate estate + advancement. d. If donee chooses to participate, net with 2 goals: i. Distribute entire probate estate; and ii. All children end up with the same amount, in the long run (even though the tangible distributions from the estate will be different). 5. Treatment of Advancements in Multi-Generation Scenarios: a. Rule: if a parent makes an advancement to a child, and that child predeceases the parent, that advancement is deducted from the shares of that childs descendants if other children of the parent survive. *very important qualification to remember. b. E.g., assume that parent has two children, C1 and C2. C1 has child GC1, C2 has child GC2. Parent makes advancement of $40K to C1. C1 dies. Later, parent dies. Probate estate is $60K. i. The hotchpot = $100K. ii. In long run, C1 and C2 would each get $50K, so GC1 only gets $10K from the estate in a Modern Per Stirpes Jurisdiction. iii. Rationale? because under the Modern Per Stirpes method, GC1 would take by representation, which means that GC1 literally steps into the shoes of C1. iv. Under 2-106 courts could likely say that GC1 is not bound by the advancement b/c would be taking per capita. 6. Advancements Under UPC 2-109 a. Requires a writing to evidence the decedents intent that the transfer be an advancement; b. If donee predeceases the parent, the advancement is not counted against that donees descendants (e.g., GC1 in above example) even if they take per stirpes. H. Releases = full satisfaction of your intestate share (forfeiting up to your ancestor) 1. Setting: Decedent transfers property to donee, but rather than an advancement, it is in exchange for a release of any claim to a share of the decedents estate. Looks like an advancement; but, instead of the transfer being in partial satisfaction of the donees intestate share, its in full satisfaction. 2. If the donee predeceases the transferor, the donees descendants will be bound by the release if take per stirpes, but not if they take per capita. I. Assignments = transfer by a prospective intestate heir of his or her prospective intestate share to an outside third party. (forfeiting outward, to some third party) 1. Transfers Made Prior to Ancestors Death a. General Rule: not enforceable i. Rationaletoo prospective; as matter of prop. law, cant convey something you dont have

b. Exception: enforceable if assignment was supported by consideration supplied by the assignee i. Rationalecontract law. ii. Notes: a. Courts arent concerned w/ policy argument that this might encourage the assignee to kill the ancestor (b/c if the assignor predeceases the ancestor, no right to inherit). b. Ancestors knowledge of the assignment, or lack thereof, has no bearing on issue of whether the assignment is effective. Knowledge/consent by ancestor not necessary. c. Another General Rule: If the assignor predeceases the ancestor and the assignor has children, the assignment is not binding on the assignors children! This is true even if the outside third party paid consideration for the assignment and even if that heir is taking per stirpes! [different from how we treat releases] i. Rationaleassignor doesnt have right to unilaterally transfer the childs property right. 2. Transfers Made After Ancestor Dies a. Always valid. b. Rationaleno longer is prospective (thus even property law would consider the assignment valid) and no longer need consideration b/c can give a gift. c. Thus, any issue with assignments will only arise if made prior to ancestors death. 3. 2 Risks from POV of Third Party, X: a. If assignee predeceases the ancestor, X is not entitled to anything, even if he pd consideration; b. The ancestor can always disinherit the assignee by will (devising all assets to someone else). J. Bars to Intestate Succession 1. Homicide: the would-be intestate heir kills the ancestor to ensure he takes via intestate succession. a. In the absence of a statute, there are three ways the law may treat this situation: i. Option 1: apply the intestate succession literally, so that the killer gets the property. a. Issue rewards the killer / encourages would-be heirs to kill; ii. Option 2: treat the killer as if he or she never existed. a. Issue undermines the intestate succession scheme (something legislature should do); iii. Option 3 [the Constructive Trust Theory]: allow legal title to pass to the killer under the intestate succession statute, but only nominally (legal fiction) so that the killer holds the property only as constructive trustee for the other intestate heirs. [hybrid of options 1 and 2] a. Best option b/c preserves the integrity of the intestate succession scheme b/c it technically, albeit via a legal fiction, does not interfere w/ the statute and b/c it does not reward the killer in the end. b. Constructive Trust Theory Applied i. Voluntary vs. Involuntary Manslaughter a. Voluntary apply constructive trust analysis; b. Involuntary dont apply constructive trust analysis (killer takes) i. If killer argues insanity, also dont apply b/c negates elements of intent. ii. Effect of Criminal Convictions on Subsequent Civil Proceeding a. Finding of voluntary manslaughter or worse carries over b. Acquittals do not carry over (b/c of the lower b.o.p.) c. Joint Tenancy: i. General Rule: If A only survives B b/c A killed B, joint tenancy of property is severed and essentially becomes tenancy in common so that A (killer) only gets 1/2 and other 1/2 remains with Bs estate. ii. A Compromise: killer would either get all or nothing. The majority rule is in-between. iii. Same analysis applies to: a. Life insurance policies; b. Killer holds a remainder interest following Victims life estate; iv. Homicide/Suicide Situation

a. View 1: case law requires a conviction to apply the constructive trust theory, therefore, the property passes to the killers estate and there is no sanction; b. View 2: if it can be shown in a civil action that the killer indeed killed the victim, the killer forfeits as does his estate, just as if there was a conviction. 2. Disclaimer: when the heir or devisee declines to take the property, the refusal is called a disclaimer a. Traditional Rule: you cannot effectively disclaim your intestate share. i. Rationale dont want to undermine the intestate succession statute. b. Modern Rule: most states have changed this rule, but there must be a statute that affirmatively does this for the traditional disclaimer rule not to apply. i. General Rule: if you disclaim, property passes as if you predeceased the ancestor. ii. Qualification: you cant do anything that would qualify as acceptance prior to making a disclaimer. E.g., gift is a home and you move in. Cant then try to disclaim. iii. Example: O has 2 kids, A and B. B dies, survived by one child, C. Then O, a widow, dies intestate. Os heirs are A and C. A has four children. A disclaims. What result in a. Modern per stirpes jurisdiction? i. If A disclaims: If A disclaims, jurisdiction treats A as having predeceased O. Thus, first generation with a survivor is the GC level. As four children and Bs child C will all take per capita so each get 1/5. ii. If A doesnt disclaim: First generation w/ survivor is C level. Apply per capita to A and B each taken1/2. Bs 1/2 goes to C by rep. (per stirpes), then A gets 1/2. iii. Policy Concern = Strategy Concern. If A disclaims, enhances his kids share at expense of C (Bs child). b. UPC 2-1106(b)(3)(A) [p.134]: the disclaimed interest passes to the descendants of the disclaimed. Thus, the only thing that would pass to As kids is As 1/2 share. c. Disclaimers and Creditors: As a general rule, disclaimed assets are off limits to the disclaimants creditors. Treat these assets as if they were never the disclaimants to begin w/ (which is one of the reasons people choose to disclaim in the first place). i. Limitation not effective against government creditors (IRS). d. Effect of Disclaimer on Government Assistance Programs: It is against public policy to allow disclaimer of an inheritance that would enable party to be self-sufficient. Thus, if a party does this, we treat it as if he owned those assets and they are attributable to him on, for example, issue of Medicaid qualification. Troy v. Hart. In Troy, he was thus liable to govt for backed Medicaid for which he would not have been eligible, even though his disclaimer was effective (so ultimately, got worse of both worlds) attorney could be criminally liable for this.

III. Wills A. Execution of Attested Wills 1. General Requirements: each state has its own statutes that prescribe certain requirements that must be satisfied in execution of will for will to be valid. 2. Traditional Rationale of Rigid Requirements: a. Ritual Function: requirements impress upon the testator and the witnesses that this event has serious legal consequences; this is not a draft, but rather, the real thing. b. Evidentiary Function: requirements help preserve reliable proof that this was the testators intent. Otherwise, might have to rely on faulty things to construct intent (e.g., bad memory). c. Protective Function: requirements help protect testator from fraud, undue influence, coercion. 3. Majority View Traditional Approach: require literal compliance w/ execution requirements. 4. Minority View Dispensing Power: notwithstanding strict compliance w/ execution requirements, will might still be valid so long as it can be proved by clear and convincing evidence that it was the decedents intent for this to be a will. a. UPC 2-503 [p.226] statute gives the courts the power to dispense with the execution requirements so long as there is substantial compliance. 5. Acknowledgement: used in most jurisdictions as a fall-back option of validating the will when you have pre-signed the will not in the presence of the witnesses or not in the presence of all of the witnesses together. a. To acknowledge means to announce that this is your name, that you wrote it, and to say to the witnesses please bear witness b. The caveat is that the witnesses must see the signature or have had the opportunity to see it and the testator must acknowledge in the presence of the witnesses together at same time! 6. Presence: 2 tests *note that the 2 tests dont only apply to signing can apply to other situations where presence is required as well, for example proxy for revocation of will. a. Line of Sight Test: the testator does not actually have to see the witnesses sign, but must be able to see them if the testator were to look. [Testator must see witness sign, or be able to see] b. Conscious Presence Test: [more liberal than line of sight test]. Under this test, the witness is in the presence of the testator if the testator, through any of the senses, comprehends that the witness is in the act of signing. 7. Order of Signing: a. General Required Order: i. Testator must sign first ii. Testator must sign or acknowledge w/ all witnesses present at the same time. iii. Only then can the witnesses themselves sign. b. Qualification: One Continuous Transaction Theory. A fallback theory. In the event that the order is not retained, may still be valid under this theory if the testator and witnesses all sign while in the same room and do so w/in a reasonable time b/c, as a practical matter, the witnesses did what witnesses are supposed to do (attest to what theyve seen, but here, its just not attesting to what theyve already seen which is the rational for the preferred order). c. UPC 2-502(a)(3) reasonable time requirement. Time gap may also be a problem. 8. Signature: a. Symbols [X] qualify, so long as it was the testators intent at the outset that the symbol qualify as his signature. Initial intent and final product must match. See CN_8 for i. E.g., Assume testator, Patrick, starts to sign but only gets so far as Pat. Wont qualify. class examples. b. Rubber Stamp/Typed Name: ALL states say this is ineffective, even if the testator himself stamps or types the name on the will. Rationale? high risk of fraud. i. Hypo: assume the testator stamps his name and in addition, marks an X. What result? We ignore the stamp as if it doesnt exist, and look at intent (see a above). However, the stamp might indirectly help establish intent.

c. Ratification: same facts as last example, but after he signs Pat, he says thats good
enough. Here, will qualify under doctrine of ratification b/c he is changing his intent.

d. Assistance: all courts say that assistance, someone helping testator sign, qualifies. i. No requirement that the testator request assistance; ii. Testator must hold pen and do at least some of the work (even only 1% will suffice). e. Proxy: applies if other person is doing all of the work and testator is only observing. i. Testator must request for proxy (unlike assistance);
ii. Presence required must be done in presence of testator. f. Placement of Signature: some states, by statute, require the signature be at the bottom. i. Rationale? helps to establish intent, this is where most people sign things. ii. Even in states where not required, can help w/ question of intent. g. Handwritten wills, no signature: If the only place the testators name appears is, for example, in his own writing as I, Patrick, do hereby it presents a question of intent. So long as it can be shown that, when he wrote those words, he intended for it to be his legally, operative signature will suffice. i. Note that if this handwritten name appears at the bottom of the will, triggers a presumption in most jurisdictions that it was the testators intent this be his legally, operative signature. h. Additions after signature: i. Setting: will with signature near bottom, but below that signature are the words I hereby give Karen Smith my diamond ring. ii. Test: what was the status at the time of execution. iii. If in jurisdiction that requires signature come at end of will and the words truly werent there until after the will was signed, we ignore the addition and everything that is above the signature is valid. iv. Administrative Additions: If the additions say something administrative rather than dispositive, we ignore the words insofar as placement of signature is concerned, but unlike dispositive words, we honor the words for purpose of their administrative directions. (e.g., I hereby appoint Emily my executor.). v. Surplusage: same result as administrative additions ignore words for signature placement purposes and will is valid. (E.g., below signature the testator later wrote the words to the KU alma matter). 9. Requirement of Disinterested Witness a. General Rule: if one or more witnesses are interested, the entire will is void. i. General rule operates so that it ultimately harms the witness/devisee and the will. ii. General Rule: to qualify as a valid witness, must be disinterested. iii. Disinterested = cant be a devisee or a spouse of a devisee in the will (note that with witnesss spouse, if the statute itself doesnt say this, we imply it via case law). iv. Rationale: concern that if the witness is interested, might apply undue influence/coercion. Purpose is to prevent fraud as of the frozen moment of execution (very time specific). v. Rule applies, regardless of whether there were enough valid witnesses. E.g., if the statute requires 2 witnesses, and you have 3, only 1 of which is interested, entire will is still void! b. Purging Statutes: interested witness (X) deemed to have forfeited her devise so that she is now a qualified witness and the entire will is valid, except for that portion devising to X. i. Purging statutes operate to help the will. ii. Variations on Purging Statutes [in some states]: a. Instead of X deemed to have forfeited her entire devise, the purging statute operates so that X only forfeits the property that is in excess of either: i. (1) what X would have received as a would-be intestate heir [X has Triple Party Status]; or, ii. (2) if there was a prior valid will (where X was a devisee but not a witness), what X would have received under the prior will.

iii. Triple Status Example: X has triple status (witness, devisee, and otherwise intestate heir). If decedent died intestate, X would have received an intestate share of $50K. Under the will, the decedent devised $70K to X. Under General Rule: entire will is void, so that X gets $50K (b/c now decedent dies w/o a will) but anyone else in the will that is not an intestate heir gets $0. Under Basic Purging Statute: only the portion devising $70K to X is void, the rest of the will is valid. Under Purging Statute Variation: will is valid, but X only gets $50K and is deemed to have forfeited $20K (keeps her intestate share of $50K). iv. Prior Valid Will Example: Under Will 1 (where X was not a witness), X was devised $50K. Under new Will 2, X was a witness and was devised $70K. Net Result: X only forfeits $20K (b/c this is the extent to which the Will 2 devise exceeds the prior devise). v. Rationale? any undue influence that X may have or did cause only applies to the amount in excess of what she would have received. vi. NOTE: if would-be intestate share or the amount under the prior will is more than the amount under the will for which X was a witness, X doesnt forfeit anything b/c theres nothing in excess and, as such, no concerns about undue influence. iii. Supernumerary Witness Statutes: if there is an interested witness (X), in addition to the number of witnesses we need under the states statute, is another prong of some purging statutes that acts as an exception so that we treat X as if she had never been a witness in the first place and, as such, does not forfeit, period. a. Supernumerary Witness statutes operate to help the will and the witness/devisee. b. Ex.: state requires 2 witnesses. A, B, and C are all witnesses. A and B are disinterested, but C is devised $70K and, as a would-be intestate heir, would receive $50K. i. Under General Rule: entire will is void, even though there are 2 valid witnesses and the state only requires 2. Because C is an intestate heir, however, gets $50K. ii. Under Basic Purging Statute: C is deemed to have forfeited her share and only the devise to C is void, the rest of the will is valid. iii. Under Super Purging Statute: C is deemed to have forfeited only the portion of her share in excess of her would-be intestate share. Thus, the entire will is valid, but C only gets $50K b/c is deemed to have forfeited $20K. iv. Under Supernumerary Witness Statute: C is deemed to have never been a witness in the first place and, b/c there were enough valid witnesses, the entire will is valid and C gets the full $70K share. iv. Estate of Parsons [p.211] a. Facts: statute required 2 witnesses. Decedent had 3: Ward, Nelson, and Gower. Ward is valid; Nelson is interested b/c of a $100 devise and Gower is interested b/c of a devise of real property. UPC 51, which applied in this state, contains a basic purging statute, but also a supernumerary witness exception. However, problem here is that there arent enough disinterested witnesses to meet the statute requirement of 2. To solve the problem, Nelson sacrificed herself for Gower by disclaiming her $100 devise. i. Would-Be Intestate Heirs Argument: statute looks at witnesses at the time the will was signed. Thus, b/c at that time Nelson was interested, the will is invalid. ii. Witnesses Argument: Disclaimers relate back to the date of execution. Thus, Nelson was a valid witness from the very date of execution. b. Issue: is Ns disclaimer effect. & does it relate back for purp. of making her valid wit.? c. Holding: A disclaimer is effective, but for purposes of witness execution, it doesnt relate back. Net result: Nelson and Gower have to forfeit, rest of will is valid. d. Rationale: purpose of a wit.execution statute is to prevent fraud and, as such, our focus is very time specific. The fact she later disclaimed doesnt solve our fraud concerns.

10. Attestation Clause: attestation clause recites will was duly executed. Not required, but good to include b/c: (1) presum. all done right; (2) rebuttal evidence in event W later testifies against will. a. Present Tense: part of actual, execution process. Contains signatures of witnesses as witnesses. 11. Self-Proving Affidavit: Allows the witnesses to pre-testify. In addition to signing the will itself, the witnesses and the testator sign and attach a notarized affidavit, which states that all of the states execution requirements were complied with. Authorized by UPC 2-504, but not required. a. Past Tense: unlike attestation clause, backward looking. Ws are saying they did all correctly. b. Not required, but should always do so that when the will is probated, wont have to call witnesses to testify that it was properly executed. c. Effect: if done, is irrebuttable, conclusive presumption that all requirements were followed. i. Qualification: the will can be challenged on non-procedural matters. Cant challenge on basis requirements werent followed, but can challenge, for e.g., testator was mentally ill. d. Must Properly Execute: dont have to use a self-proving affidavit, but if you do, the will itself must be executed properly! E.g., In re Will of Ranney [p.226] the witnesses didnt sign the will itself. They did have an attestation clause, though not required, but failed to sign that as well; however, they did sign the self-proving affidavit. There wasnt literal compliance with the execution requirements, however, state followed minority approach so ct. sent back to see if there was enough evidence to amount to clear and convincing evidence of decedents intent. B. Execution of Holographic Wills 1. Defined: a holographic will is a will hand-written by the testator and signed by the testator; no attesting witnesses are required. 2. Valid in 27 states; not in Kansas. a. Note: in Kansas and other states that dont recognize holographic wills, the will can be handwritten, but we must have the signature of witnesses and the testator. Only difference w/ a holographic will is that (1) we dont require witnesses and (2) must be handwritten. 3. Advantage: if recognized, advantage is that the will does not have to be witnessed. 4. Extent Holograph Must Be Written by Testators Hand: [p.241] a. First Generation Statutes: entirely, written, signed, and dated i. Require that everything be in testators penmanship regardless of whether the non-written words are essential to the will. ii. The Intent Approach if the word is there, the testator intended it to be there, and, as such, it must be in the penmanship of the testator. iii. E.g., a. In Estate of Thorn: testator had real property he called Cragthord, which, after hand writing 1x, he stamped on the will thereafter. Proponent of will argued the stamped words were mere surplusage b/c was handwritten in initial description but court held will invalid b/c not everything was in testators penmanship. b. In Estate of Dobson: testator took her signed, handwritten will to her banker to clarify it w/ him. To make the will clearer, the banker made handwritten notes in the margins all w/ consent of testator. Held invalid b/c not all in testators own handwriting. b. Second Generation Statutes (1969 UPC): material provisions [tunnel vision approach] i. Require only that the signature and the material provisions of the holograph be in the testators handwriting. ii. Testamentary Intent: under this approach, some courts were willing to look at the printed (non-handwritten) language to establish testamentary intent others, however, were not. Thus, some courts struggled with wills that were partially typed and partially handwritten b/c sometimes a material dispositive provision was wholly or partially printed and sometimes the language that indicated testamentary intent was printed rather than written out by the testator. Most courts, follow approach laid out in Mulkins: a. Strip away pre-printed language and treat it as if it doesnt exist; b. Focus exclusively on penmanship words that remain;

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c. Are these words enough to express the testators testamentary intent? If so, can say that pre-printed part is not essential and, as such, will is valid. iii. E.g., a. Estate of Johnson: Pre-printed words were I hereby give and to. When these were stripped away, all that was hand-written was Sharon Clements 1/8. Court held penmanship words werent enough to embody testamentary intent will held invalid. b. Estate of Muder: Printed words: I give to . Penmanship words my wife Retha our home located in Douglas County. Not much more than Johnson, but here court held the penmanship alone was enough to establish testamentary intent (even though no penmanship words saying I hereby give/devise.) iv. Overall: more flexible than 1st gen. approach, but still falls short [e.g., b/c the date is material according to most holographic will requirements, must be handwritten and would be invalid if the date were printed]. c. Third Generation Statutes (1990 UPC): material portions and extrinsic evidence allowed. i. Change from Provisions to Portions meant to allow the probate of a holograph even if immaterial parts such as the date or introductory wording are printed. ii. Extrinsic Evidence Allowed (biggest change) allowed to establish intent. C. Revocation of Wills [the end of the wills cycle] 1. Three Means of Revoking a Will a. Revocation by Subsequent Writing [best method of revocation] i. Requirements: both must be true a. Affirmative act by the testator (signing the subsequent will); i. Exception proxy: (1) at testators request; (2) in presence of testator. b. Intent to revoke. ii. Revocation by subsequent writing still requires witnesses to be present (must meet generally applicable will requirements for the particular jurisdiction). iii. NOTE: doesnt necessarily have to be a separate document. Most courts would treat writing on the back of the will as a subsequent writing if properly executed. iv. 2 Sub-Categories: Different ways the subsequent writing can revoke a. Express Language: the subsequent document revokes the prior document (will or devise) by express language. Can also be in the form of a blanket provision revoking all prior wills or one, particular will. See CN_11 for b. Implication/Inconsistency: implied from inconsistency in a subsequent document. class examples. i. Later will in time has priority (2nd will prevails by implication). ii. Revocation occurs partially and only to the extent of the inconsistencies. v. Competing Views on Subsequent Writings: a. Ecclesiastical Approach: when will is executed, it takes effect immediately in terms of its effect on other wills. b. Common Law Approach [majority rule]: when a will is executed, it only takes effect upon the testators death. vi. Types of Subsequent Writings: a. Codicil: subsequent document that refers back to the first with reasonable specificity and, as such, is not a separate, independent will but rather a part of the first will. i. Codicil depends on the original will for its life, but not visa versa. b. Second Will: subsequent will that does not refer back to the original will. c. Effect of Codicil versus Second Will: i. If testator revokes the 2d doc. first has no impact on first will, regardless of whether a codicil or 2d will (unless in jurisdiction applying ecclesiastical approach) ii. If testator revokes 1st doc first very important if second document is a codicil or a will. If a codicil, revocation of the will impliedly revokes the codicil as well.

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vii. Partial Revocation by Subsequent Writing: Every jurisdiction allows partial revocation by
subsequent instrument (unlike partial revocation by physical act).

b. Revocation by Physical Act *recognized by all states. i. Requirements: both must be true
a. Affirmative act by testator (some act done to the paper itself: burning, tearing, etc); i. Exception proxy: (1) at testators request; (2) in presence of testator. b. Intent to revoke. ii. Revocation by physical act does not require witnesses to be present. iii. Cancellation: a. A cancellation is physically marking over the original words in the will. b. Contact Requirement [majority rule]: by definition, you cancel words (conversely, you burn the document, so burning or tearing dont require contact w/ words). As such, the marking on the document must come in contact w/ the words. i. Rationale? helps establish testators intent to revoke. Notes in margins are usually there to understand the document, not to cancel it. ii. Is traditional and still majority rule. c. UPC 2-507 [minority rule] no contact requirement for words/markings (treats in same manner of burning/tearing). iv. Partial Revocation by Physical Act: only allowed in some states (unlike partial revocation by subsequent writing). But, entire revocation by physical act recognized by all. a. Qualification/Exception: If the partially revoked provision is destroyed and theres nothing else to ascertain intent (no photocopies, etc) even jurisdictions that dont recognize partial revocation by physical act will probate the rest of the will anyway and give up on the partially revoked part so that the net effect is that we basically have partial revocation if the testator did a thorough enough of a job w/ the physical act. b. UPC 2-507 allows partial revocation by physical act. c. If jurisdiction doesnt allow it (and testator didnt do thorough enough of a job for qualification to apply) we probate the entire original will and treat attempted partial revocation as if it never occurred. d. Effect on Holographic Wills (if allowed) whether jurisdiction recognizes partial revocation by physical act is moot w/ holographic wills b/c we allow the testator to make changes to a holographic will by installments over time (continuous evolution). c. Revocation by Operation of Law i. Revocation done for the testator by operation of law. As such, no intent requirement. ii. Typical Statute: will is revoked if a certain event occurs in the testators life subsequent to the will e.g., marriage, divorce, birth of child, etc iii. Divorce: net result typically is that we treat the now-former spouse as if he or she predeceased the testator. Qualification: unless will says otherwise. a. Relatives of Divorced Spouse: i. Usually, devises to relatives of divorced spouse are not revoked; ii. UPC 2-804(b) extends automatic revocation of devises to former spouses relatives as well. iv. Marriage / Children: net result typically is that they get what they would have received under intestate share. Qualification: unless left out intentionally or, sometimes, if included in other non-probate transfers. 2. HYPO [taken from Thompson v. Royall p.255]

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a. Testator executes will and codicil, but later changes her mind. Her attorney comes with the docs and she instructs him to destroy the documents to revoke them. However, instead, he instructs her to keep them intact for memo purposes. What result under the following fact variations? i. Scenario 1: a. Additional Facts: (1) On the back of the will, the attorney writes this will null and void; (2) Testator signs below; (3) No witnesses b. Result: Not an effective revocation b/c of lack of witnesses. ii. Scenario 2: a. Additional Facts: (1) On the back of the will, the attorney writes this will null and void; (2) Testator signs below; (3) this time witnesses present! b. Result: Revocation is valid. iii. Scenario 3: a. Additional Facts: (1) On the back of the will, the testator writes this will null and void; (2) Testator signs below; (3) No witnesses b. Result: Revocation is valid, so long as jurisdiction recognizes holographic documents b/c in such jurisdictions, holographic documents dont require witnesses. 3. The Harrison Presumption a. Presumption = testator revoked the will OR destroyed will with intent to revoke. b. 2 Factual Premises Trigger the Presumption: i. The will in question is last traceable to the testators possession; ii. Upon testators death, the will in question can not be found OR is found, but in a mutilated form (e.g., torn, burnt, etc) c. Presumption is rebuttable. d. Note that if no one can testify that the testator is really the one who did the physical act presumption still arises (but again, its still rebuttable). 4. Duplicate Originals a. Setting: have 2, validly executed wills (used blue ink on both) you never want to do this, but if you do, some general rules apply. b. General Rule: testators intent to revoke a will carries over to duplicate originals, regardless of whether the duplicate original remains intact. i. Harrison Presumption applies: if the 2 factual premises are met as to one of the duplicates, we presume the testator also intended to revoke the second original, even if the second duplicate original is in the testators possession (however, presumption is stronger if second duplicate original is not in the testators possession). 5. Effect of Duplicate Unexecuted Copies: a photocopy of a will or any other unexecuted copy have no legal significance. As such, any physical act done to it is insignificant. However, unexecuted copies can be used as evidentiary support when needed. 6. Ratification a. General Rule: ratification is not allowed in a case where we have an attempted revocation by physical act done by someone other than the testator. b. E.g., testator requests a proxy, but the revocation by physical act is not done in his presence and, as such, requirements for proxy are not met. As a backup argument ratification also will fail. 7. Dependent Relative Revocation (DRR): a. Can apply at micro level; e.g., to revocations of specific devises rather than entire wills. b. Threshold Question: Do we even need DRR to resurrect Will 1? Considering the following Qs: i. Was Will 1 even properly revoked so that, although testator intended to revoke Will 1, that intended revocation was invalid and, as such, dont need DRR to resurrect Will 1? a. If Will 1 is partially revoked by physical act does this jurisdiction even recognize revocation by physical act so that it was effective? If not, no DRR. b. Is it a handwritten will? If so, does state recognize holographic wills?

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ii. Conditional Intent: Was the testators intent to revoke Will 1 conditional? *Note intent
factors only apply to Formula 1 (see below), b/c under Formula 2, we have proof of the contingency by reference in Will 2 (see below). a. Are the provisions b/w the two wills substantially similar? If the provisions in Will 2 are materially and substantially different from Will 1, we presume the testators intent was that Will 1 not continue to operate in any event. b. Physical proximity of Will 1 and Will 2.

c. DRR Formulas: DRR applies in two situations:

Formula 1: (1) Testator destroys or revokes Will 1 because he believes Will 2 will take its place; and (2) one of two things are true: a. 1. Will 2 is invalid (never took effect b/c was improperly executed); or b. 2. Will 2 was never made at all. ii. Formula 2: (1) Testator is motivated to and does revoke, or partially revoke, Will 1 by a belief that turns out to be false; and (2) Will 2 contains a reference to this mistaken belief [Will 2 must recite why Testator revoked Will 1]. d. LaCroix v. Senecal [p.260] i. Facts: Will 1 is validly executed and gives 1/2 Nephew; 1/2 Aurea. Later, testator executes a codicil, with exactly the same provisions, but she put her nephews actual name. Problem? one of the witnesses to the codicil was Aureas husband and, as such, he doesnt qualify as a disinterested witness. B/c of the purging statute, it wont invalidate all of Will 1, but would cause the 1/2 devise to Aurea to be invalid. ii. Net Result w/o DRR: Testator validly revoked Will 1, but second disposition to Aurea is invalid b/c she is purged from the devise. iii. Holding: DRR applies. Testators intent to revoke initial residuary clause was conditional. e. Reverse DRR: When a later will is revoked w/ hope it will reinstate an earlier will (the exact reverse of DRR). If intent is shown and other facts are right, DRR might apply to reinstate Will 2. E.g., Will 1, then Will 2, which expressly revokes Will 1. However, testator later tears up Will 2 thinking it will have the effect of reinstating Will 1. Most courts will use reverse DRR to reinstate Will 2. E.g., Estate of Alburn [p.264] 8. Revival a. Factual Premise: i. Have Will 1; ii. Then, Will 2, which revokes Will 1 (by either express language or impliedly by inconsistent devises only (b/c if revoked by physical act, revocation is always instant), and is itself valid. iii. Later, Will 2 itself is revoked by testator (w/ his intent to revoke) b. Question raised: when testator revoked Will 2, does it have the effect of automatically reinstating Will 1, b/c, the only reason Will 1 is void is due to Will 2? c. 4 Views on Issue: i. English/Common Law View: no will takes effect until testator dies. Thus, Will 2, which purports to revoke Will 1, never took effect at all. Thus, Will 1 was never revoked and we dont even need to reinstate. ii. Instantaneous View (Ecclesiastical View): Will 2 takes effect immediately and, as such, Will 1 was revoked and remains revoked. To reinstate, must re-execute Will 1 w/ all proper requirements. iii. Liberal, Instantaneous View: Same as Instantaneous view, BUT, Will 1 can be revived if the testator so intends. iv. UPC 2-509: a. (a) If W2 wholly revoked W1, W1 remains totally revoked i. Rebuttable Presumption: If evidence of contrary intent Reinstates b. (b) If W2 only partially revoked W1, W1 reinstated i.

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i. Rebuttable Presumption: If evidence of contrary intent Remains Partially

Revoked (start with opposite presumption from subsection (a)). c. (c) Chain Application: If W2 revoked W1, either in whole or in part, and later, W2 is revoked by W3, W1 remains revoked. i. Rebuttable Presumption: If language in W3 says that T intends for W1 to be reinstated Reinstated. D. Components of a Will: 4 doctrines that assist in determining what this particular will comprises: (1) Integration of Wills; (2) Republication by Codicil; (3) Incorporation by Reference; and (4) Independent Legal Significance. *note the last 2 permit extrinsic evidence to resolve the ID of pers. or prop. in will. 1. Integration: under the doctrine of integration, all papers present at the time of execution, intended to be part of the will, are integrated into the original will. a. 2 Requirements i. Physical Presence: this page must have been in existence at the time of execution; a. Physical Presence Factors: i. Pages are fastened before will is signed; ii. Testator initialed each page; iii. Internal coherence (e.g., plot follows from page to page w/o gaps); iv. Orderly scheme (e.g., consecutive page numbering, roman numerals, lettered s) ii. Intent: testator must have intended the page in question to be part of the will. a. Intent Factor: If physical presence is established, raises rebuttable presum. of intent. 2. Republication by Codicil: under the doctrine of republication by codicil, a will is treated as reexecuted (republished) as of the date of the codicil. a. Codicil MUST Refer Back to the prior will w/ reasonable specificity (date, time, location ) See CN_15 for b. Consequences of Republication by Codicil: Republication by Codicil hypos. i. Later in time takes priority over earlier will; ii. Can effectively reexecute a prior will that was invalid by providing the missing formalities; c. Note that its okay if the codicil happens to be on the same piece of paper as the will. See e.g., Johnson v. Johnson [p.297 / CN_16] Also, ok if codicil is holographic, so long as jurisdiction recognizes holographic codicils and those words alone make sense as a testamentary devise. 3. Incorporation by Reference: under doc. of incorporation by reference, any outside, independent writing that is 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. Consequence of Incorp.by Reference: outside doc. is sucked in and becomes part of the will. b. 3 Requirements: i. Outside document must have already been in existence at time will is executed; ii. Will refers to the outside document in present tense as being in existence; iii. Will describes the outside document with some degree of reasonable specificity. c. Keep in mind that incorporation by reference can work in conjunction with other doctrines. E.g., in Clark v. Greenhalge, Testator had a memo which was written in 1972 and later amended in 1976. Then, in 1977, a will which gave all to Greenhalge, except the things T kept in the memo. Later, in 1979, Testator started to keep a notebook where she gave a painting to Ginny. Finally, 2 codicils in 1980 republished Ts 1977 will. HELD: the notebook qualifies as a memo. Note that under the doctrine of incorporation by reference, the notebook was not in existence at the time the will was executed b/c the will was executed in 77 and the notebook didnt come until 79; however, b/c of the 2 codicils in 80, we treat the will as if it were first executed in 1980 rather than 1970 under the doc. of republication by codicil, which solves the issue of existence under the doctrine of incorporation by reference. d. List Statute Exception. UPC 2-513 (see p.278) is a deviation from the requirements under the incorporation by reference doctrine. i. Under that statute are the following deviations:

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a. You can dispose of tangible personal property, other than money by a statement written before or even after the will is executed. b. Will must refer to a writing, but it doesnt have to refer to that document as being in existence at the time of execution; c. Writing must be signed by testator (not required for incorporation by reference). ii. Called a list statute b/c it doesnt have to be witnessed. iii. Doesnt eliminate incorporation by reference. Instead, only applies if the above criteria are met in those special circumstances. 4. Independent Legal Significance: Under the doctrine of independent legal significance, an external event, condition, or document may be used to identify a devise or a devisee under a will. a. Premise: whatever T is conveying or person T conveys to, must be derived by an outside event b. Test: the external event/document must have a non-testamentary impact / be non will-minded c. HYPO i. Will reads I leave all of my assets to my generic wife. Later, T marries A. Although the outside event, the marriage of T and A, has an impact on the will, this impact is incidental to the reason that people get married (T and As marriage was not motivated by Ts will). As such, all of Ts assets go to A when T dies. ii. Will reads All my GM stock to A. When T executes the will, has 10 shares; however, T later acquires 10,000 more shares and dies. A is entitled to 10,010 shares b/c, although the will is effected by Ts acquisition of the additional 10,000 shares, it was non-will motivated. iii. Will reads All of my assets to go in accordance with a memo Ill leave my exec.. Here, ind.legal sig. will not work b/c the memos only purpose is to impact Ts will. Incorporation by reference also wont work b/c memo wasnt in existence at time will was executed. d. Contents of a Container: i. Situation: Will reads To X, whatever is left in container when I die. ii. Locked Containers: if container is locked and T keeps the key, may work b/c when T changes the contents, its an independent act. This is especially true with a safety deposit box (unless many people had access to the box). iii. Unlocked Container: less likely to work b/c of high possibility for fraud. e. Anothers Will: if Ts will says, for example, All my assets to any charitable trust established by As will, the others will is usually treated as an event w/ independent legal significance. f. List statutes (see above) also act as a deviation from independent legal significance doctrine b/c even if the writing only has a testamentary impact on a will, it can still qualify under a list statute if all of the other requirements are met. E. Lapsed and Void Devises 1. Death of Devisee Before Death of Testator: a. General Rules i. Rule of Lapse (traditional rule): devise lapses upon devisees death and when Testator later dies, those assets stay in Ts estate as either (1) residue or (2) intestate. Thus, the assets dont go to the devisee, b/c he predeceased T, but also dont go to the devisees estate. a. Hypo: Ts will reads my watch to A (specific devise) and $10K (general devise) to B. Residue to C. A and B predecease T. Net Result when T later dies? watch and $10K go to C as residue. If C also died, the watch and $10K go to Ts intestate heirs. ii. No Residue of a Residue Rule (minority, common law rule): if a residuary devisee predeceases T, that devisees share passes to Ts intestate heirs. a. Thus, if we have 2 residuary devisees, and only 1 survives T, the living residuary devisee remains frozen at 1/2, and deceased residuary devisees share passes intestacy. b. Exception: in the majority of states, this rule has been overturned by statute or judicial decision b/c it doesnt carry out the average testators intent. In these states, the residuary devisees are treated as joint tenants so that if 1 predeceases T, the other devisee takes all by right of survivorship.

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Exception: assume that Ts will reads 1/2 residue to A, 1/2 residue to B. A predeceases T. Here, even in a state that has abolished the no residue of a residue rule, B remains frozen at 1/2 because of the specific language in Ts will. iii. Class Gifts: if a member of the class predeceases T, the entire class devise goes to the surviving class members (class members are treated as joint tenants). a. Class Gift Defined: a devise to a generically designated group of people, all of whom share a status, w/o identifying any of the members of the class by their individual names b. Hypo: T devises $10K to As children. As child B, dies before T. At Ts death, T is survived by another child of A, C. C takes the entire $10K b/c this is a class gift. iv. Void Devise (common law rule): where a devisee is dead at the time the will is executed, or the devisee is a cat or dog or some other ineligible taker, the devise is void. The same general default rules govern the disposition of void devises as govern lapsed devises. a. Hypo: T devises blackacre to X; however, unbeknownst to T, X is already dead. The devise to X is void (not lapsed, b/c X was dead pre-execution) and, as such, blackacre remains w/ Ts estate either as (1) residue or (2) intestate. b. Estate of Russell [p.388] i. Facts: Ts will devised Everything to Chester Quinn and Roxy Russell. Chester is a human, Roxy is a dog. ii. Trial court allowed extrinsic evidence to show that Ts intent was for 100% to go to Chester and then for Chester to take care of Roxy. iii. However, Supreme Court (and DLT) disagreed. To determine if theres ambiguity in a will, apply a 2-step process: o Threshold phase is the language vague and ambigious on its face? o If so, only then can we consider extrinsic evidence. Here, no such ambiguity. Instead, the will devises 1/2 to Chester, 1/2 to Roxy Russell; however, devise to Roxy is void and, b/c the same default rules that govern lapsed devises govern void devises, Chester remains frozen at 1/2.

i.

b. Antilapse Statutes: these statutes keep a devise from lapsing (applies to lapse only) and
typically give the devise to the devisee in the person of his or her surviving issue instead of lapsing to Ts estate. i. The If Clause generally, under these statutes, theres an if clause that lays out certain requirements that the devisee who predeceases T must satisfy for the statute to apply. The general requirements (if clauses) are: a. Named devisee must predecease T; b. Devisee bears a certain relationship to T (usually, kids); c. Devisee left surviving issue.

ii. UPC 2-605 (see p.393)

a. If Clause if a devisee who is a grandparent or a lineal descendant of a grandparent of the testator.... b. Hypo: T devises my home to my niece, A, residue of my estate to B. A predeceases T, leaving a child C who survives T. i. Under UPC, C takes the house in place of her mother, A b/c A is a lineal descendant of Ts grandparents. ii. If, however, a statutes if clause required the devisee to be a descendant of T, the antilapse statute would not apply, the home would lapse back to Ts estate, and B would take the home as residue of Ts estate.

iii. Exception Words of Survivorship: typically, the testator can negate the antilapse statute
w/ express language in the will that requires the devisee to survive the testator. a. E.g., I hereby devise to B, if B survives me.

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b. Allen v. Talley [p.393] i. Facts: Testators will read I hereby devise all to my living brothers and sisters. At time of execution, T had 5 living brothers and sisters. At Ts death, only 2. ii. Issue: whether this language is enough to negate the antilapse statute. iii. One of the deceased siblings issue argued that this language meant living at the time of execution, but the court disagreed and held instead that T intended only those siblings alive at the time of her death to take. As such, the devise to the deceased siblings lapsed, the other 2 took only 2/5 each and the remaining 3/5 remained in Ts estate as residue or intestate. c. Words of Survivorship under the UPC: under 2-603, the 1990 revision to 2-605 (above), words like to A, if A survives me are not enough! Instead, the testator must explicitly include language about the UPC statute. Thus, language like no antilapse statute, including 2-603, shall apply would work, but mere words of survivorship alone are insufficient. d. Issue of Common Accident: i. Generally, the devisee is deemed to have predeceased T unless he or she survives by more than 120 hours. ii. Problem from Ts POV: if devisee does survive by 120 hours, the property goes, very soon after Ts death, to someone whom T did not intend. Although this can happen in any event, its rare for it to happen so close to Ts death. iii. Solution? Gift Over Clause T can include language that defines survivorship by X number of days. E.g., To A, if A survives me by 90 days, then to Y. c. Class Devises i. Features of a Class Gift: a gift of a finite, aggregate, limited sum to a body of persons who are uncertain in number at the time of the gift and the exact identities to be ascertained at a future time. The members all take in equal portions and, as such, the amount each member takes is dependant on the size of the class. Members have common characteristics and, often, its based on status (sometimes, as compared to the testator). a. Exception to unnamed devisee rule: if T mentions a group of specific names and gives a finite sum to those people with the intent that the money go only to survivors, it may still qualify as a class gift. ii. Class gifts dont lapse b/c the class is not determined until the date T dies (same rule applies in an Ecclestical state). iii. Survivor Rule: when you have a devise to a class, it goes exclusively to the members of that class that survive the testator (negates the no residue of a residue rule). iv. Effect of Antilapse Statute on Class Devise: generally, if a class member predeceases, the entire gift passes to the surviving class. However, the majority rule is that antilapse statutes do apply to class devises (even though they technically dont lapse per se). As such, it has the effect of essentially negating the survivor rule. a. E.g., Assume that T devises to her children. The children are a class. Also assume that the applicable antilapse statutes if clause applies to Ts issue. If one of Ts children predeceases T, but that devisee has issue of his or her own, that portion of the class gift would remain with Ts issue, in Ts grandchild/grandchildren. F. Changes in Property after Execution of the Will 1. Identify of Devises a. Specific Devise: a devise of a specific item owned by the testator that is distinguishable from the rest of the testators estate. b. General Devise: a devise usually of a specified value, but not of a particular item that is distinguishable from the rest of the estate.

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c. Demonstrative Devise: a devise that is payable first out of a particular specified source and, if
that source runs out before satisfying the devise, the remaining devise is payable from the testators general estate. E.g., $2K to X, to come first out of my savings account with XYZ Bank and, if that is not sufficient, then from my estate. 2. Ademption by Extinction a. Applies only to specific devises: specific devises of real and personal property are subject to the doctrine of ademption by extinction. b. Doctrine of Ademption by Extinction: if, when T dies, her estate contains no items specified by the will, those devises adeems and, as such, fail. i. This is the traditional rule, and the rule that will apply on the exam! *Note that this is known as the Identity Theory of Ademption (minority view is the intent theory of ademption.) a. Exception intent may be used to negate the replacement rule (see below). ii. This is true, regardless of Ts intent. iii. Rule can be preempted by drafting. c. Hypos: i. My grandfather clock to X. later, T sells the clock to Y. X gets nothing. ii. $10K to X. T dies and theres only $9K in cash. Because this is a general devise, ademption by extinction does not apply and, instead, Ts estate is liquidated to make up for the remaining $1K. d. Ways to Circumvent Ademption by Extinction: b/c courts feel that the doctrine is anti-intent, many have created loopholes to get around it: i. Characterize devise as general or demonstrative a. E.g., 10,000 shares of GM stock most courts say this is general versus 10,000 shares of my stock would be characterized as specific. b. E.g., $10K, more or less, entered on my bank book was held to be demonstrative. ii. Classify the intervivos disposition as a change in form, not substance a. E.g., my 100 shares of Tigertail Corp to A. Later, Tigertail Corp. merges into Lion Corp., which retires the Tigertail stock and issues in its place 85 shares of Lion stock for every 100 shares of Tigertail. Most courts hold that corporate merger or reorganization is only a change in form, not substance, so that A takes the Lion stock. iii. Construe the meaning of the wills as of the time of death rather than as of the time of execution. a. E.g., T devises my Lincoln automobileto A in her 1984 will. At her death, T owned only a 1988 Lincoln. The Court allowed A to take the 1988 Lincoln. DLT calls this the Replacement Rule at that moment-focused time of death, is there something in the estate that matches the devise in the will. b. But see in Morris a devise failed when T sold a diamond watch referred to in the will and bought another diamond watch worth approximately 5 times as much as the original. Note that this is the minority rule. Finding here probably had more to do with the dramatic difference in value. c. NOTE: although actual intent is generally irrelevant, it can be used to negate the replacement rule so that there is ademption! E.g., Morris. iv. Create Exceptions a. E.g., if T becomes insane or legally incompetent post-execution, usually (but by state statue only), we say that there is no ademption by extinction so that if the item isnt there, the devisee still gets either a replacement or the cash value. e. UPC 2-606(a) (adopted in KS) i. Under this statute, a specific devisee has a right to the specifically devised property in the testators estate at death and:

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a. (1) any balance of the purchase price owing from a purchaser to T at death by reason of sale of the property; b. (2) any amount of condemnation award for the taking of the property unpaid at death; c. (3)any proceeds unpaid at death on fire or casualty insurance or on other recovery for injury to the property; d. (4) property owned by T at death and acquired as a result of foreclosure; e. (5) real or tangible personal property owned by T at death which T acquired as a replacement for specifically devised real or tangible personal property (extension of the replacement rule b/c here, the new item doesnt have to be an identical match); and f. (6) Catch-all Provision: if situation isnt covered by (1) (5), theres no ademption if it can be factually established, as a matter of intent, that T intended the gift not to adeem. ii. Examples: a. T devises blackacre to X. Later, the state of KS condemns the property and assesses blackacre to be worth $300K. T and KS enter into K under which KS will pay T 3, $100K installments. They pay 2, T dies. 1 payment is left outstanding. There is ademption to the extent of the $200K (the gift has adeemed $200K); however, subsection (1) of the statute saves ademption as to the outstanding payment - $100K. b. T devises to A my Ford car. Later, T sells the Ford and buys a Rolls-Royce and a Honda. Maybe subsection (5) saves the devise; however, potential issue with that section is that it doesnt define replacement and mentions nothing about intent. c. T devises Blackacre to A and later sells and buys Whiteacre with the proceeds. A is entitled to Whiteacre under subsection (5). d. Aunt Fanny Fox has a collection of Chinese snuff bottles. She devises her collection to Wendy Brown. At Aunt Fannys death, the snuff bottles are not found in her house and there are no records of how many snuff bottles there initially were. Wendy would have to prove under subsection (6) that ademption by extinction would be anti-intent. 3. Accession a. Defined: when the property increases in value, post-execution, but pre-death. b. Issue Raised: is devisee entitled only to original gift, also the addtl value that was created? c. Issue only arises when there is accession pre-death! d. General Rules: i. If merely appreciation in value of the item, the increased value goes to the devisee. ii. If the increase is generated income pre-death, courts regard it as different from the original gift and, as such, it does not go to the devisee. iii. If the increase in value involves post-death accession, it clearly goes to the devisee b/c the base asset (the gift) becomes property of the devisee immediately upon Ts death. e. Hypos: Is the devisee entitled to the increase in value in addition to the base gift? i. T devises my bond to X, which generates interest pre-death YES. X is entitled to collect interest on the bond. ii. T devises $10K to X, which generates interest in the bank. NO. X is not entitled to collect interest on a flat sum of money. iii. T devises interest on a debt owed (creditors right) to X. YES. X is entitled to the interest iv. T devises interest on an amount due on a debt to X NO. v. T devises Blackacre to X. At Ts death, Blackacre has immature growing crops YES. X is entitled to, not only Blackacre, but also to the growing crops. vi. T devises Blackacre to X. At Ts death, there are harvested crops stored on prop. NO. vii. T devises Blackacre to X. At Ts death, the crops are mature and ripe (no longer growing, but still attached to the ground), but havent been harvested. ?? no clear answer here. f. Stock Dividends (Majority Rule): stock dividends declared during Ts life dont go to devisee.
See CN_20 for review hypos.

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Rationale: will has no effect until T dies. As such, income earned until Ts death is property that is separate and different from the stock devise. Under the majority rule, stock dividends are treated the same as cash dividends. ii. The Majority Rule applies, even if it will dilute the devisees ownership rights in a corporation. E.g., will reads 16 shares of my corporate stock to X. At time of devise, the corporation has only 2 shareholders, T and Y (who also has 16 shares), so that each have 50% ownership rights. Later, the corporation declares a 25% stock dividend, which would generate a 4 share dividend. T dies. X only gets 16 shares, but now, Y has 20. As such, X only has 40% ownership rights as compared to Y. Doesnt matter under the majority rule. g. Stock Splits (Majority Rule): additional stock that is generated from a stock split does pass with the base stock and goes to the devisee (stock splits are treated differently from stock dividends). i. Rationale: a stock split is appreciation of the stock itself. When stock increases in value, the concern is that it might be more difficult to sell. So, the corporation will take back 1 share, and give the stockholder 2 shares back to make it more marketable. The courts view these 2 shares really as the single, initial share. 4. Ademption by Satisfaction- parallel to advancement a. Applies only to general devises. b. Reubttable Presumption: the doctrine raises a rebuttable presumption that T intended the intervivos transfer to be an early satisfaction of an earlier devise (either in whole or in part). c. Hypos: T devises $50K to my son, S, residue of my estate to my daughter, D. After executing the will, T gives S $30K. This raises a presumption that the gift was in partial satisfaction of the legacy so that S will take only $20K at Ts death. 5. Exoneration of Liens: a. Premise: T devises Blackacre to X. At Ts death, there is an outstanding mortgage on Blackacre b. Rule: under this doctrine, a devisee has a right to receive a devise of property mortgage free and whatever is still owing is to be paid off by other assets of the estate. i. Exception: UPC 2-607 under this provision, the presumption is reversed so that, as a general rule, devisee receives Blackacre subject to the mortgage. But, this presumption can be negated by a statement by T that he wanted it to pass free of any mortgage. a. Such language must be specific! Not enough to have I want all debts paid off at the top of the will. Instead, need language like blackacre to A, mortgage free, w/ mortgage to be paid off from general assets of the estate to negate the UPC presumption. 6. Abatement a. Factual Premise: the problem of abatement arises when the estate has insufficient assets to pay debts as well as all the devises; some assets must be abated or reduced. By divvying up a limited pie among claimants of different priorities, abatement operates like bankruptcy. See Abatement Examples b. Traditional View: Handout for i. Abatement Order under Traditional View: in the absence of indication in the will as to how review hypos. devises should abate or be reduced, devises abate in the following order: a. Personal Property Devises: i. Intestate ii. Residue iii. General Devises iv. Specific Devises b. Real Property Devises: i. Intestate ii. Residue iii. General Devises iv. Specific Devises c. Modern View:

i.

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i. Abatement Order under Modern View: in the absence of indication in the will as to how
devises should abate or be reduced, abate in the following order: a. Intestate (both real and personal) b. Residue (both real and personal) c. General Devises (both real and personal) d. Specific Devises (both real and personal) ii. Under the modern view, theres no preference for real property devises! d. Kansas View: i. Abatement Order under KSA 59-1405: unless the will says otherwise: a. Intestate personal property b. Intestate real property c. Residuary personal property d. Residuary real property e. General Devises (both real and personal) f. Specific Devises (both real and personal) ii. Thus, in Kansas, we do favor land, but drop that preference when we reach general devises. e. Final Category Abated Pro Rata: under all views, when we get to the last category that we need, the devises in that particular category are abated pro rata. f. Special Treatment of Demonstrative Devise: for purposes of abat., treat demonstrative devises as if devise were 2, sep.devises. E.g., T devises $10K to X, paid 1st from A source, then out of my gen. estate. Wed treat the first clause as a specific devise, the second as a general devise. G. Restrictions on the Power of Disposition: T can dispose of assets as wishes, sub. to certain limitations. 1. Rights of Surviving Spouse (Including Elective Share): a. Two Basic Marital Property Systems: i. Community Prop.: income he earns belongs to both, income she earns belongs both (50/50) a. Premise: marriage is a team effort. b. Adopted in 8 states (not in Kansas) c. Limitations on Community Property: i. Applies only to income earned during the marriage. Doesnt apply to intervivos gifts from outside third parties or any devises. Doesnt apply to any property, including income, earned prior to the marriage. ii. Separate Property: income that he earns is his, not theirs. Income that she earns is hers, not theirs. Generally, both have the right to dispose of their assets in any way they so wish. a. Adopted in 42 states, including Kansas. b. System doesnt have any sort of built-in protection for non-income producing spouse. Instead, we give the surviving spouse certain statutory rights that provides for a claim to certain types of family assets. Note that all are things that come off of the top, before we even consider devises under the will or intestate and elective shares: i. Homestead: stats. give surviv. spouse right to live in fam.home for life so that decedent cant dispose of home in way to deprive surviving spouse of homestead. E.g., W conveys home intervivos to X. Xs rights are sub. to surv. spouses. Court Has Discretion to Limit Homestead: the court, acting as a court of equity, has a lot of power to choose the homestead (e.g., if there are multiple homes), and, even if only 1 home, the power to limit the acreage. o KSA 59-401: Homestd outside incorp. city max. = 160 acres, plus improvements. Homestead inside incorporated city maximum = 1 acre. Property must have been occupied by decedent at time of his/her death. Prop. not available to decedents Cs. Exception attachment by one who loaned decedent $ to purch. home in 1st place (mortgage holder/bank)

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ii. Exemptions (personal property set-aside): right to have certain tang. pers. prop.
items of decedent, up to certain val. (e.g., fam. bible, photos, videos, comp. disc..)

iii. Family Allowance: typically, statute allows the probate court to award a family
allowance for the maintenance and support of the surviving spouse and dependents. Usually awarded on a year to year basis. Usually lasts thru period of admin.of estate (comes to end when estate closes) iv. Dower and Curtesy: Dower: dower entitles widow to LE in 1/3 of husbands qualifying land. Thus, W becomes a 1/3 co-tenant for her life w/ someone else who has the other 2/3. o Attaches to land owned by H at any pt. during marriage, provided a FSA. o 3 Significant Limitations: Only for her life she cant devise it by her own will; Only a co-tenancy w/ someone else; Begins only when he dies (i.e. she gets 0 if she predeceases him). Curtesy: curtesy entitles the widower to a life estate in all of his wifes assets. o Unlike dower, possessory rights begin immediately (rather than upon spouses death); however, only after there is a child born out of that marriage. b. Elective Share: i. Traditional Elective Share: trad. elective share is based on decedents probate estate (prop.disposed of by will or intestate statute). Thus, doesnt include non-probate xfrs. a. Called elective share b/c surviving spouse has an election: i. He or she can keep whats coming to him or her under the will plus what he or she would be entitled to under the states intestate succession statute; OR ii. If he dies first, she can reject what the will says and what is provided under the intestate succession statute and take instead, the elective share. b. Potential for Abuse: b/c its based on the probate estate, husband could take all of his assets and put them in joint tenancy format or some other non-probate format. ii. UPC Elective Share 2-202: here, the elective share is based, not on the traditional probate estate, but rather the augmented estate. See Brief Summary of the a. 5 Basic Policy Premises Elective Share under the i. Partnership Model: UPC doesnt recognize his and his and hers as hers. UPC Handout and CN_22. ii. Variable Percentage: % of elective share increases for each year married. iii. Title of Property not Determinative: just b/c its titled in only her name or only his name, doesnt mean it is definitely not marital property. iv. Property that passes to 3d parties by virtue of non-probate arrangements might be regarded as part of the augmented estate. v. Ultimate goal is to give each 1/2 no more, no less. Thus, we take into consideration surviving spouses assets and some of those assets might properly be considered as marital property (she may already have some of her half.) b. Mechanics i. Step 1: Calculate Augmented Estate. Augmented Estate = Sum Of: Decedents Net Probate Estate (e.g., prop. disposed of by will or intestate) Decedents Non-Probate Transfers to Persons other than Surviving Spouse

o (i) POD accounts, TOD accounts, life insurance policies, joint tenancies, etc. o (ii) any transfer during marriage where decedent retained possession of, enjoyment

of, or income from the property and in which the decedents right to terminate at or continued beyond the death. [i.e, life estate remainders, inter vivos trust arrangement retaining interests, etc.] (iii) assets that passed during marriage and during 2-years immediately prior to death as a result of termination of a right or interest in or power over an asset that

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wouldve been included under (ii) if not terminated before death, and xfrs described in (ii) during marriage in which decedent retained an interest. (iv) transfers during marriage and during 2-years immediately preceding death to individuals other than the surviving spouse to the extent the aggregate transfers exceed $10,000. NOTE: irrevocable trusts w/ a 3rd party as the beneficiary are includable in the augmented estate only to the extent they were set up during the marriage, if before or after then not included.

Decedents Non-Probate Transfers to Surviving Spouse (POD, joint tenancies, TOD accounts, life insurance policies). Surviving Spouses Individual Assets and Non-Probate Transfers to Others that Wouldve Been Included in Surviving Spouses Augmented Estate ii. Step 2: Determine Elective Share Percentage. See Chart only need to know how long theyve been married. Note that the elective share percentage is not the same as the amount of marital property. Instead, the elective share percentage is half of the marital property. As such, for example, if the couple were married 16 years, 100% is marital property, but the elective share percentage is 50%.

iii. Step 3: Calculate Elective Share Amount. Elective Share Amt. = [Augmented Estate] X [Elective Share Percentage] Supplemental Elective Share Amount if the elective share amount is less than $50K, we will tack on (via statute) whatever it takes to get to $50K. The portion that is tacked on is the supplemental elective share amount. iv. Step 4: Identify Sources to Satisfy Elective Share Amount. First satisfied from: o (a) Property that goes from decedent to surviving spouse by will, intestate See CN_23 for good review examples and steps in succession, and non-probate transfers and greater detail. Also, see o (b) The surviving spouses own individual assets and non-probate transfers handout examples starting from the surviving spouse to others, but only up to the applicable on p. 4 for review. percentage (2X the elective-share percentage) of those assets and xfrs. *basically, we offset the surviving spouses elective share amount by his or her own assets, but only up to a certain percentage of those assets. If not fully satisfied, then next by: o Property that otherwise would go from the decedent to others by will, intestate succession, and non-probate transfers. o Note: this distribution is done on Pro Rated Basis! If not fully satisfied, then next by: remain. balance pd. on pro-rated basis from: o (a) assets the decedent transferred to others during the marriage, but during the last 2 years of decedents life, by virtue of a termination by the decedent of his or her interest in an arrangement that otherwise would have qualified as a non-probate xfr. to others by the decedent. o (b) transfers to any non-spousal person that the decedent made, during the marriage but during the last 2 years of decedents life, to the extent these transfers to any one donee in either of the 2 years exceeds $10K. c. Note that elective share amt. represents surviving spouses half of entire marital estate. c. Effect of Elective Share Waivers

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i. General Rule: surviving spouse can waive rights to any allowances, wholly or partly,
before or after marriage by a signed waiver of agreement; as long as it is not fraudulently executed, no misrepresentation is involved, no duress, no undue influence, etc ii. Prenuptial agreement is like any other contractual agreement and, as such, is presumed valid in absence of fraud. In re Estate of Garbade [p.453] a. Party attacking validity has BOP to prove fraud to rebut presumption (high BOP) b. Only if met does the burden shift to other side to disprove fraud. Burden will shift to proponent if the opponent can show the relationship was one susceptible to fraud or coercion. E.g., In re Grieff [p.454] 2. Rights of Omitted Spouse a. Premise: Will Marriage No Change to Original Will. Must have a post-execution marriage for these statutes to apply. Rationale? purpose is to protect forgotten spouses. b. Omitted Spouse Statute: surviving spouse is entitled to what he or she would have received had the decedent died intestate. i. Must have a post-execution marriage for the statute to apply. ii. Example: In Estate of Shannon [p.462] a. Omitted Spouse Statute at Issue: i. Must have post-execution marriage. ii. Exceptions: If Testator omitted spouse intentionally and such intention is clear from will; If T provided for spouse by transfers outside will and the intent that such transfers be in lieu of a testamentary provision is show either by statements made by T, from the amount of the xfr, or by other evidence; If spouse made a valid waiver. b. Facts: Decedent made will in 74 stating I hereby intentionally omit all other living persons and relatives. In 86 he marries Lila, never adjusts will. Dies 2 years later. c. Holding: Lila is entitled to share as an omitted spouse under the statute. Court held that the wills language didnt qualify as intent to exclude Lila b/c she wasnt a relative at the time he wrote those words. c. Intentional Omission of Generic Spouses language such as I hereby exclude any living relative or future spouse wont usually qualify as an intentional omission of a post-execution spouse. Overall, courts are unlikely to allow someone to disinherit generic spouses. d. UPC 2-301 Entitlement of Spouse; Premarital Will [at p.465] i. (a) If we have a post-execution marriage, the surviving spouse is entitled to receive the value of her intestacy share; however, in calculating that intestate share, we carve out: a. Any devises made to children from a prior marriage; b. Any devises to descendants of such a child. ii. (b) To satisfy that amount: a. First take into account devises to surviving spouse from decedents will; b. Then abate devises to others that are not issue of the testator born before testator married surviving spouse or a descendant of such issue. iii. Note that 2-301 is not just an omitted spouse statute. The statute also might apply even when the spouse is mentioned in the will. The only way this issue will arise is if the will contains a generic reference (to my future, generic surviving spouse) OR if theres a devise to some individual who later becomes the testators spouse. 3. Rights of Omitted Issue: a. Permitted Issue Statutes: typically provide for kids born post-execution and, like omitted spouse statutes, provide that the omitted issue is entitled to take as if T died intestate. b. Disinheriting Issue

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i. With kids, the testator does have the right to intentionally disinherit. Unlike a spouse (b/c
w/. spouse, have protection in form of elective share not same w/ kids).

ii. If you explicitly disinherit a particular issue, has the effect of automatically disqualifying
anyone further down the chain from inheriting as well. In re Estate of Laura [p.481]. a. However, stop gap idea works downward only. As such, if a grandchild is mentioned, but not the child, the child can invoke the permitted heir statute. c. Effect of Codicil on Omitted Issue: because a codicil republishes a will so that the will is treated as if first executed on the date of the codicil, if a child is born post-execution, but before a valid codicil, the child is regarded as being alive when that will was executed and, as such, child does not qualify under the permitted issue statute. d. UPC 2-302 [at p.479-80] i. Factual Premise: T leaves a will that fails to provide for any of Ts children born or adopted after execution of the will. ii. These omitted children may, however, still be entitled to receive a share of the estate if certain things are true under the UPC statute: a. (a)(1) If all of Ts kids are born post-execution afterborns get what they would have received had T died intestate. i. Exception doesnt apply if the will devises all or substantially all of the estate to the surviving parent b/c we trust that parent will provide for the children. b. (a)(2) If the will provides for some kids, but not afterborns postborns are included See CN_25; p.2 with those children that are named as if they are part of a class gift. As such, they and p.481 of receive the amount each would have received if T had given each child an equal share book for review. of the pot. i. If T made devises to then-living children under will the Pot is limited to the amount of such devises. The children whom were then-living must chip in on a pro rated basis to get the afterborn his or her equal portion. ii. If T did not make devises to then-living children under will not explicitly covered by statute, but can be read in 2 ways: Could stretch (a)(1) to mean that pro rata share of the pot here is $0 so that the omitted child gets nothing; OR Could read beginning of subsection (2) to mean only if T devised to thenliving children under the will. iii. Exceptions (b)(1) if it appears from language in will that omission was intentional; (b)(2) if T provided for omitted child by xfr outside the will w/ the intent that xfr be in lieu of any devise under the will. c. (c) If T mistakenly thought child was dead, treat that child as if she was an after-born. d. Gray v. Gray (page 528) i. the will has to fail to provide for the kid and the kid has to have been born postexecution ii. Exceptions if the omission is intentional the testator had one or more kids and devised substantially all his estate to the other parent of the omitted child provided for child in a different way with the intent of it being in lieu of the will iii. at the time the will was executed he already had two other kids and he devised all of his assets to the kids mother. This means Jack is excluded from taking a share of the estate. There was an estate set up that was in lieu of the will.

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iv. Held: Jack is not entitled to a share b/c the court applies a literal application of the statute v.

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IV. Trusts A. Introductory Matters: 1. Parties to a Trust a. Settlor: the original property owner, who transfers that property to create a trust, essentially making a gift of that original property to the trust for the benefit of the beneficiaries. b. Trustee: has the duty of management of the assets and owes that duty to the beneficiaries. c. Beneficiary: holder of the equitable title, receives ultimate benefits, and has rights of enforcement against trustee in the event he/she breaches any trustee duties. d. Note that all three can wear multiple hats so that, for example, Settlor and/or Trustee could also be a Beneficiary. 2. When the Settlor transfers the property, it conceptually divides the title so that he conveys: a. Legal Title to the trustee for the benefit of the beneficiaries. i. Not divided. Instead, all remains in trustee. b. Equitable Title to the beneficiaries. i. Usually, the equitable interest is separated in terms of someone having a present interest and another having a future interest. ii. Standard Example: income generated by principle to A for her life, remainder to B. After A dies, trust is over and any remaining principle plus accumulated income goes to B. c. *as such, neither the trustee nor the beneficiaries own the property exclusively. 3. Sub-Categories of Trusts: a. Intervivos Trusts take effect during Settlors lifetime; b. Testamentary Trusts established by Settlors will and, therefore, takes effect when he dies. 4. Settlor a. An intervivos trust may be created either by declaration of trust or by a deed of trust. i. By Declaration Settlor declares that she holds certain property in trust (thus, the Settlor herself is also going to be the Trustee). a. Doesnt involve transfer or delivery. b. Intent Requirement: does require some manifestation of Settlors intent that she is now holding these assets in trust (no longer her own). c. Statute of Frauds: if the trust involves real property, SOF will normally apply so that the declaration must be in writing. i. However, if non-real property assets, declaration can be oral. ii. Note that, as a practical problem, oral declarations may present proof obstacles later ii. By Transfer / Deed of Trust Settlor transfers property to another person as trustee. 5. Trustee a. Can be one trustee, or several trustees. b. Can be an individual or a corporation. c. Trustee can be: i. Settlor (declaration) ii. A third party (transfer) iii. Beneficiary a. Qualification? trustee can not be the sole beneficiary. d. The No Trust Fails for Want of Trustee Rule: If Settlor intends to create a trust, but the documents fails to name a trustee, court will step in as a court of equity and name a trustee. i. Same result if the named trustee declines to serve or if named trustee dies while serving. ii. Exception? If the trust document expresses Settlors intent that this particular trust be in existence only for so long as X serves as trustee. e. Trustee can decline to serve. i. However, if the trustee does accept at the outset, can only be released from duties if either: a. All beneficiaries consent to release trustee from responsibilities; or b. Pursuant to a court order.

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Summary of Trustees Duties. Trustee has the following duties: i. Fiduciary to act only for benefit of beneficiaries a. Self-dealing prohibited: thus, trustee cant purchase something from trust, or sell to trust. Even if the deal is fair / trustee thinks this is good for the trust. ii. Safeguard assets and make assets productive so as to generate income for trust. iii. Distribute income and principle to beneficiaries in accord w/ principles of trust. iv. Keep trust assets identifiably separate v. Keep accurate records of all transactions and periodically make an account. vi. Act with reasonable prudence vii. Not to delegate Trustee duties to another. 6. Beneficiaries a. The enforcers of the trust. b. Trust Pursuits Rule (a.k.a. Proceeds Rule) if the trustee, in wrongfully disposing of trust property, acquires other property, the beneficiary is entitled to enforce a constructive trust on the property so acquired, treating it as part of the trust assets. Similarly, where the property ends up in the hands of a third person, unless the third person is a b.f.p. for value and w/o notice of breach of trust, beneficiary can go after that third party. i. E.g., Jimenez v. Lee [p.499] mere fact that trustee sold trust assets to purchase Commerce Bank stock did not end the trust. c. Creditors of Beneficiaries: generally, creditors can not attach the assets of the trust; however, they can attach the beneficiarys interest in the trust (essentially, step into shoes so that are the new beneficiary). B. Creation of a Trust 1. Elements of a Trust: a. Intent to Create a Trust: there must be an intent, on part of Settlor, that there be mandatory obligations imposed on the Trustee. i. Intent can be derived from Language and Surrounding Circumstances. ii. Language: no particular form of words is necessary to create a trust and the words trust or trustee need not be used; however, when language is not clear, can present problems. a. Simplest Form: To T in Trust; or To T, as Trustee. However, these words arent required to create a trust. b. Precatory Language: If the language is not as clear, it may be considered precatory language. The issue that arises is whether, by this language, the testator intends to create a trust with legal duties imposed on trustee, or rather if the language is merely a moral obligation , unenforceable in a court. c. Case Examples: i. T devised entire estate to his wife and then continued, I recommend to her the care and protection of my mom and sister, and request her to make such gift and provision for them as in her judgment will be best. Holding: Wife took the estate not absolutely, but rather, subject to a trust for the benefit of the testators mother and sister. Rationale: likely b/c of circumstances present in the case. ii. I wish, but do not legally require, the C permit D to live on the land. Here, clearly precatory language. As such, not a valid trust. b. Necessity of Trust Property: Because a trust is a method of disposing of, or managing, property it is said that a trust cannot exist without trust property. i. General Rules: a. Mere Expectancy Cannot be Subject Matter of Trust if this happens, courts treat it as a non-event.

f.

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i. E.g., I declare myself trustee of shares of stock in a corp. I may hereafter acquire.
Even if he later acquires stock in that corporation, no trust b/c is regarded from the outset as a non-event. ii. Second Declaration Rule In such a case, the Settlor would need to make a second declaration of his or her intent to establish a trust of that property in order to actually have a valid trust. iii. Contract Qualification a contract is more than a mere expectancy. E.g., Settlor enters into K with X to acquire property. S provides consideration in form of cash in return for Xs promise to convey that particular property. Here, although S doesnt yet own the property, S can establish a valid trust and theres no need for a second declaration when S does acquire the property. iv. Profits from valid trust are okay. v. HYPOS: O orally declares to A: I give you 5% of the profits of a musical play based upon Shaws Pygmalion, if I produce it and if there are any profits. o No valid trust, if profits do come into existence, requires 2d declaration. O orally declares himself trustee for one year of all stocks he owns, with any profits from stock trading to go to A. o Valid trust b/c O does already own the stock. Moreover, part to A is fine b/c any profits it generates are income from the trust. A declares himself trustee for B of future season KU football tickets. o No valid trust. With sports programs, not always a guarantee that youll get tickets each year so if A later does receive the tickets, not bound by promise b/c a trust was never created in the first place. c. Necessity of Trust Beneficiaries: a trust must have one or more ascertainable beneficiaries. i. Rationale: a. Need an Enforcer there must be someone to whom the trustee owes fiduciary duties; someone who can call the trustee to account. As a general rule, Settlor doesnt have power to enforce! Once Settlor has set up trust, its regarded as a complete gift and, as such, Settlor no longer has standing to receive anything. b. Balanced Conveyance remember that trustee gets legal title and beneficiaries get equitable title. ii. Identified with Reasonable Level of Specificity. If the trust document is too vague as to ID of beneficiaries, the trust fails. Consequence? property goes back to Settlor via resulting trust. a. Bequest for Benefit of My Friends Fails. Unlike relatives, theres no working definition of friends or some legal, objective criteria to determine whether someone is your friend or not. Clark v. Campbell. d. Necessity of Written Instrument: An intervivos oral declaration of trust of personal property is enforceable. Conversely, the SOF requires any intervivos trust of land to be in writing. And, of course, a testamentary trust must be created by a will. Nonetheless, under certain circumstances a court will enforce an intervivos oral trust of land or an oral trust arising at death. *Remember, these are situations where an oral agreement never created a valid trust to begin with, but the law steps in to save the trust. i. Oral Inter Vivos Trusts of Land a. Generally, SOF requires conveyance of land to be in writing; however, SOF typically doesnt apply to an interest that arises by operation of law. As such, no SOF issues in this type of situation b/c the law steps in to create a trust by operation of law. b. Resulting Trust (handout): arises by operation of law when facts and circs. show that a person had intent to hold equitable title to property although legal title is w/ another. i. Can Only Arise in 3 Situations:

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Failure to Create Express Trust o E.g., beneficiaries not defined w/ sufficient specificity, didnt indicate a trust purpose, or failed to comply with rule against perpetuities.

For good exam review, see cases from CN_28.

Failure of Express Trust to Dispose of All Trust Property o E.g., To T in trust in F.S.A., with the income to go to B for life. When B dies, its over and theres no one to continue giving the income too. As such, the legal and equitable title are unbalanced. Purchase Money Resulting Trust o E.g., A pays money to B, and B, in accordance with the agreement b/w them, conveys certain property to C, rather than to A, even though A is the one who paid the consideration. o Such a situation triggers a presumption that C holds the property for A. c. Constructive Trust: an equitable remedy court imposes to prevent unjust enrichment. i. Typically Comes up in 3 Situations (but not an exhaustive list): Fraudulent Conduct o E.g., T promises S that if S conveys property to T, T will apply property for benefit of B. At that very moment, T has intent of reneging and using property for his own benefit. o Moment-Focused remember that fraud means you lied from the outset. It is a lie from the very beginning. Lie=Fraud. o If the lie occurs after the conveyance, it is merely a broken promise and not a lie. Therefore, there is no fraud. Abuse of Confidential Relationships (e.g., parent-child relationship) Property Obtained by Homicide o E.g., S is prospective intestate heir and murders his father. S will hold his intestate share under constructive trust for the other heirs and courts treat the situation as if S predeceased his father. d. In BOTH Cases, Trust is Merely a Misnomer with these trusts that arise by implication, there is no ongoing fiduciary relationship b/w trustee and beneficiary. i. Resulting Trust: the holder of the legal title (trustee) simply has the obligation to convey the legal title to the holder of the equitable title (beneficiary). The beneficiary of a resulting trust is the person who had the implied intent to hold equitable title and thus is also the settlor. If the settlor has already died, the beneficiaries of a resulting trust are the settlors successors in interest; that is, the settlors heirs if the settlor died intestate or, if the settlor died testate, the beneficiaries of the settlors will. ii. Constructive Trust: ct. decides that pers.w/ apparent full ownshp of prop. actually holds only legal title b/c it would be unjust for that person to retain the beneficial interest in that property. Then, the judgment of the court acts to transfer legal title from the evil property owner (trustee) to the person who would have owned the property, but for the property owners inappropriate conduct (beneficiary). ii. Oral Trusts for Disposition at Death a. Three Scenarios: common theme in each is that S chooses to have property disposed of in a particular way based in part on her reliance on Ts oral promise. i. S devises by will Blackacre to T, but does so only after T has orally promised that he will hold Blackacre in trust for B. ii. S devises Blackacre to T in a will executed one year ago. Now, T promises orally that he will hold Blackacre in trust for B.

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iii. T is Ss only intestate heir. T promises that if S dies intestate, he will hold Blackacre in trust for B. b. Generally, unenforceable b/c of either the execution requirements for wills or due to SOF b/c involves land. As such, issue that arises in these situations is whether law recognizes an exception. c. Secret Trusts Will: to T + Oral: in trust for B = Constructive Trust to B. i. General Premise: a will that purports to make an absolute gift but where there is actually an agreement b/w the beneficiary and the testator that the beneficiary will hold the property in trust for a person the testator has separately indicated. If beneficiary retained the property, he would be unjustly enriched. As such, courts will establish a constructive trust for the intended beneficiarys benefit. ii. General Rule: in this type of situation, oral beneficiaries can present evidence of that trust. Qualification? must satisfy by clear and satisfactory proof (higher standard of proof than normally required). iii. Must have a Will! If the portion that purports to make an absolute gift is not via will, the secret trust exception doesnt apply. iv. Have a higher burdon of proof b/c we are allowing a lot of outside extrinsic evidence. d. Semi-Secret Trusts Will: To T in trust + Oral: for B = Resulting Trust. i. Here, called semi-secret b/c at least we do have a writing indicating its some kind of trust. What is secret it its terms and beneficiary. ii. Here, we dont allow extrinsic evidence. Instead, we know that T isnt supposed to have it so instead of using extrinsic evidence to ID B, it goes back to S via resulting trust (in form of Ss successors in interest). C. Discretionary and Spendthrift Trusts 1. Rights of the Beneficiaries to Distributions from the Trust: a. Mandatory Trust the trustee must distribute all the income. i. E.g., O transfers property to X in trust to distribute all the income to A. This is a mandatory trust. The trustee has no discretion to choose either the persons who will receive the income or the amount to be distributed. b. Discretionary Trust the trustee has discretion over payment of either the income or the principal or both. Discretionary powers of a trustee may be drafted in limitless variety. i. Level of Discretion: even if the discretion is absolute, its always governed by the implied standard of reasonable prudence (thus, never really total absolute discretion). ii. E.g., O transfers property to X in trust to distribute all the income to one or more members of a group consisting of A, As spouse, and As children in such amounts as the trustee determines. The trustee must distribute all of the income currently, but has discretion to determine who gets it and in what amount. iii. Support Trust: where the trustees discretion is limited by an ascertainable support standard (e.g. such as amounts as are necessary to support my children in the style of living to which they are accustomed). a. Need dictates both floor and ceiling. i. Trustee is obligated to make distribution for beneficiaries needs; BUT ii. Trustee cannot made distribution beyond those needs. iv. Discretionary Support Trust combines an explicit statement of discretion with a stated support standard (e.g., such amounts as trustee shall, in his uncontrolled discretion, deem necessary to support my children in the style of living to which they are accustomed.) a. Need dictates ceiling only.

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b. However, for all purposes, same as a support trust b/c courts hold that this discretion is governed by an objective standard of reasonable prudence (rather than the trustees own, subjective discretion). Marsman v. Nasca. v. Trustees Duties under Support Clause: a. Make distributions only to extent facts meet the need; b. Authority to make those distributions, but no more! c. Duty to make a reasonable investigation as to the beneficiarys needs; d. Duty to inform beneficiary as to whats available in the trust to meet those needs. 2. Rights of the Beneficiarys Creditors a. Attachment b. Garnishment c. Assignment d. Mandatory Trusts: Creditors can always attach and get in line before other Cs. e. Discretionary Trusts: because a beneficiarys interest in a discretionary trust is a mere expectancy, although a Creditor can technically attach the interest, this can only be done when theres an exercise of the trustees discretion! Therefore, its really on a distribution by distribution basis and C must wait in line w/ other Cs. i. Because the beneficiary cant compel the trustee to make a distribution, neither can the C because he is in no better position than the beneficiary. As such, trustee can choose not to exercise discretion at all. a. Possible Exception? implied standard of reasonable prudence. b. NOTE: Here, talking exclusively about the Expressly Total and Absolute Review CN_30 discretionary trusts b/c in case of an expressly limited discretionary trust (e.g., needbased) beneficiary/creditor can compel distribution when the need is present. ii. General Rule: Discretionary Clauses Bar Creditors, Even Super Creditors! This is true even if theres a spendthrift clause on top of a discretionary clause. E.g., Shelley [p.550] iii. What Constitutes an Exercise of Discretion? a. Generally, any manifestation of intent on the part of the trustee to release control of assets in favor of the beneficiary is an exercise of discretion. b. Can also be dictated by the terms of the trust.

f. Spendthrift Trusts: one way to preempt this sort of attachment is via a spendthrift clause.
i. 3 Forms of Spendthrift Clauses: a. No Assignments Language: language in trust that prohibits the beneficiary from assigning his interest in the trust to some outside, third party. b. No Attachments Language: language in trust that prohibits a creditor from attaching the beneficiarys interest in the trust. i. NOTE: although this is conceivably possible (language prohibiting attachments, but allowing assignments), most courts hold that this language is invalid b/c it violates public police. Rationale? allows debtor/beneficiary to pick and choose which of her creditors are paid. c. Both: language that prohibits both assignments and attachments. ii. Effect of Spendthrift Clause C can only go after assets after distributions have been made (cant get in line early) distribution by distribution (post facto / never prospective). iii. General Rule: spendthrift clauses are valid and honored. iv. Exceptions Spendthrift Bars situations where spendthrift clauses are ineffective: a. Child Support and Alimony i. Income spendthrift is no bar ii. Principal discretionary clause is a bar. b. Tort Claims c. Federal and State Governments not effective to protect against tax claims (tax liens). d. Necessities

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A person furnishing necessary services or support (e.g., medical necessities and food) can penetrate a spendthrift clause. e. Exception to the Above? if the state has a statue that speaks exclusively to this so that the courts cant carve out their own exceptions. E.g., Scheffel. g. Self-Settled Asset Protection Trusts i. General Rule: cant set up a spendthrift or discretionary trust for yourself. ii. Rationale? shouldnt be able to enjoy benefits of your property while simultaneously avoiding creditors. The protective justification for allowing a donor to insulate a gift from the claims of donees Cs collapses when the donor and the donee are one in the same. iii. Net Result? Creditor can reach the maximum amount that the trustee could pay the Settlor out of his or her discretion.

i.

D. Termination of Trusts 1. General Rule: once a trust is established, it is irrevocable. 2. Exceptions: a. Consent of Settlor and ALL Beneficiaries if the settlor and all beneficiaries consent, an irrevocable trust may be modified or terminated. This is b/c no one else has any beneficial interest in the trust including the trustee. Thus, the trustee cannot object. The right to modify or terminate with consent of all beneficial parties exists notwithstanding a spendthrift clause. b. Claflin Doctrine trust can be terminated or modified if no material purpose of the trust would be undermined by termination or modification and all beneficiaries consent. [p.573] i. Here, even if Settlor is dead, can get trust terminated if other elements are met. ii. Examples of material purposes that would prevent termination/modification: a. Spendthrift clause b/c material purpose is to protect beneficiary from himself. b. Support trust c. Discretionary trust all discretionary trusts embody settlors intent to protect B. d. Age requirements e.g., if trust requires holding P from B until she reaches 21. iii. Example of things that are not a material purpose a. When a trust provides merely for successive beneficiaries, the settlors only purpose is to provide successive enjoyment. Really its just a time schedule (one interest after another) and, as such, not a material purpose that would prevent termination. E. Revocable Trusts 1. Gen. Rule: inter vivos trust is irrevocable, unless power to revoke is expressly retained by settlor. a. Must be done by express language in the trust document; b. The settlor must then follow the procedures that he himself put in the document to revoke it. 2. Potential Issue: did the settlor retain too many rights in the property? In these cases, some may argue that if theres too much power over the assets, its really an attempted will rather than a trust; however, that will fails because of failure to satisfy the states will requirements. i. General Rule: generally, courts give settlors a lot of leeway to retain many powers and still have a valid, enforceable trust. E.g., Farkas a. Farkas v. Williams [p.299] Settlor retained lifetime benefits over corp.stock, upon his death, beneficiary gets title. Settlor also retained right to vote stock in corp. decisions, right to sell, right to change beneficiary, and right to revoke. Even though settlor retained this power, court held it was an effective inter vivos trust (not attempted will). i. Rationale? under arrangement, his revocation was ineffective unless he followed certain procedures, so the settlor did give up certain elements of control. Also, his

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administrative control wasnt really determinative since those rights are subsumed by his right to revoke anyway and finally, he manifested an intent to create a trust. ii. Overall, settlor can retain a LE and power to revoke and still create effective trust. *This is also the position of the Restatement. ii. Effect of Elective Share: though gen. rule is a trust is valid, even if settlor over-retains power, will it be regarded as invalid when the surviving spouses elective share is at stake? a. Sullivan NO. Trust remains valid and wife has no rights to the assets as part of her Overall, need to husbands estate subject to her elective share, even if the settlor did this with the intent know distinction b/w to circumvent the elective share statute. 2 cases/positions. b. Newman YES. The elective share is a special factor that could tip the balance in the opposite direction. i. Kansas has followed Newman so that we could say in Kansas we have a special interest in protecting the surviving spouses interests generally (both elective share and intestate share). ii. IF the court does apply this approach, the trust is only partially invalid so that its only invalid to the extent necessary to provide for the surviving spouses interest. c. General Rule is to use the Objective test (used in Farkas and Sullivan). As such, we only look at the rights retained and whether they are too substantial, without regard to the settlors intent or motive. 3. Mechanics for Revoking a Trust: a. No Harrison Presumption w/ Trusts: if a will was last traceable to the Testator and we cant find it, the Harrison presumption assumes that the T destroyed w/ intent to revoke. No similar presumption w/ trust documents. We dont revoke trusts by physical act, unless the trust document itself provides for such revocation. b. Overall, can only revoke a trust if the document itself allows for revocation and if so, revocation may only be accomplished by the methods prescribed for in that document. 4. Spendthrift trust for yourself = over-retention. Assets will belong to your estate when you die. F. Pour-Over Trusts: In general, an inter vivos trust exists and the testator of the will wants the assets of the estate to pour-over into that trust upon his or her death. 1. General Premise: (1) Settlor sets up a revocable inter vivos trust naming X as trustee. Settlor transfers to X, as trustee, his stocks/bonds. (2) Settlor executes will devising residue of his estate to X, as trustee, to hold under terms of inter vivos trust (i.e., pour-over from probate estate into trust) 2. Methodology of Pour-Over Trusts Validity: a. Incorporation by Reference (Minority/Old View): a will can incorporate by reference a trust instrument in existence at the time the will is executed. i. Strictly applied, which limits its application (may read to result less reflective of Ts intent) ii. Document must be in existence at time will is executed. iii. Will must refer to trust document with reasonable specificity. iv. Also problematic b/c it allows the original assets of the trust to become fair game for Cs. b. Independent Legal Significance (Majority/Modern View): a will may dispose of property by referring to an inter vivos trust that disposes of assets transferred to the trust during life (an act that has significance apart from disposing of trust assets). More flexible. i. More flexible, so likely more reflective of Ts intent. ii. One advantage is that the instrument doesnt have to be in existence when the will is executed; however, the trust must have some assets in it before T dies. iii. No possibility of pulling in original trust assets, so they wont become open to elective share and/or creditors claims. c. UPC 2-511: validates a pour-over of probate assets into an inter vivos trust executed before, concurrently, or after execution of the will. Doesnt make original trust testamentary (thus, follows doctrine of independent legal significance); as such, doesnt subject original assets to Cs (however, the new assets do go through probate and are subject to their claims) i. Statute negates incorporation by reference.

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ii. Can pour-over into an unfunded trust (unlike at common law). See Clymer v. Mayo.
G. Charitable Trusts 1. Advantages Over Private Trusts: a. Doesnt have to comply w/ Rule Against Perpetuities. b. Cy Pres Doctrine if settlors exact charitable purpose cannot be carried out, court may step in and continue trust by directing the application of the trust property to another charitable purpose that approximates the settlors intent. Whereas a private trust terminates once the purpose ends. c. Dont need ascertainable beneficiaries. In fact, if the beneficiaries are too precise, it fails as a charitable trust and instead is a general trust. Instead, beneficiaries must be general. 2. Validity: a. Charitable Purpose: a charitable trust must have a valid, charitable purpose. Purposes include: i. Health (e.g., to set up a hospital); ii. Religion (e.g., to build a church); iii. Advancement of education (e.g., scholarships); iv. For the relief of poverty; a. Rule: when a gift is mere financial enrichment, its only charitable if restricted to the poor. Shenandoah Valley Natl Bank v. Taylor. [p.729] v. Government of municipal purposes; vi. Other purposes, the accomplishment of which are beneficial to the community. b. HYPOS: i. Trust to pay law professor Charitable, b/c advances education. ii. Trust to build church for wealthy residents of Mission Hills Charitable, b/c it promotes religion (doesnt matter if theyre rich). iii. Trust for general benefit of lawyers not charitable. iv. Trust to benefic a particular political party not charitable. v. Trust to promote socialism Charitable, b/c its educational by exposing people to new ideas and it improves the government by encouraging the exchange of ideas. c. A trust may be a valid charitable trust, even though the persons who ultimately benefit are limited in number. The key is that the selection pool must be large enough so that were considering that community as a whole. Thus, a trust awarding scholarships for educational achievement is charitable, even if only one or two students will receive them, provided that the class of eligible recipients is broad. But a trust to educate one, particular person is not charitable b/c it doesnt benefit the general public. 3. Modification of Charitable Trusts: Cy Pres: KSA 59-22a01. a. Premise: Settlor sets up a trust for a general purpose, but w/ a specific beneficiary. Later, the intended purpose becomes either obsolete or impossible/impracticable to perform. b. Rule: under the doctrine of cy pres the court is empowered to step in as a court of equity and selective an alternative that is as close as possible to the Settlors original intent (cy pres means as near as possible). i. Qualification All or Nothing Intent if its be found that the Settlors intent was that this charitable entity/purpose and only this one be the recipients, we wont apply cy pres. ii. for this purposes only; or gift over: if charity gone, then gift to X; or no cy pres. c. General Charitable Purpose: There must be a general charitable purpose for cy pres to even apply b/c otherwise, might indicate Settlors intent that cy pres not be available. i. E.g., Settlor sets up trust to be used as hospital in memory of her husband. This was held general. It didnt specify any specific type of medicine. Result? court applied cy pres to hold that the building could be used for administrative purposes (not even a hospital) so long as the administrative building was medical in some way. In re Nehr [p.738] d. Cy Pres is not available merely b/c the assets could be put to better or more efficient/worthy uses. See e.g., The Buck Trust [p.743].

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e. Discriminatory Trusts: i. Premise: have a charitable trust that limits use of assets on, for example, gender or race.
a. Public Entity: If it calls on a public entity to administer the trust, courts have held it violates the equal protection clause (in case of race). As such, most courts use cy pres. b. Private Entity: might still have an issue if there are state statutes that prohibit private entities from discriminating. If so, courts would use cy pres. Evans v. Abney (774). Settlor set up trust for an integrated park. The court held it was illegal and the assets went back to his estate. ii. Exception? again, if settlor expresses all or nothing intent, no cy pres, trust fails, and wed have a resulting trust back to Settlor or Settlors estate. 4. Enforcement and Supervision of Charitable Trusts a. Traditional (General) Rule: the Attorney General has the power to enforce a charitable trust or a co-trustee has power to enforce against a fellow co-trustee. b. Special Category / Exception persons who have a special interest in the administration of the trust. Someone who is entitled to receive a benefit under the trust in a way thats not available to the public as a whole has standing in many courts. E.g., Smithers v. St. LukesRoosevelt Hospital Center (see p.751 and CN_34) c. Herzog case: Trust set up for nursing program. The school got rid of their nursing program and was using the funds as general funds. Can the donor enforce the purpose of the trust? General rule: the donor of a charitable gift or trust does not have standing to enforce the terms of the gift or trust unless they have reserved the right to do so. d. If trust states: Settlor has standing, maybe then settlor will have standing w/out exception. e. UTC 405(c) allows the Settlor to enforce a charitable trust.

H. Powers of Appointment 1. Defined: a power given by the original property owner (donor) that gives the recipient of that power (the donee) the power to determine who is entitled to receive the final interest in the prop. 2. The Players to a Power of Appointment: a. Donor: original property owner b. Donee: person who receives the power, has power to decide who ultimately will receive the property and usually the power to determine the extent that party will receive (amount). c. Objects: the people in whose favor the power could be exercised (candidates). d. Appointees: People in whose favor the power is actually exercised. Chosen from objects. e. Taker in Default: named in doc. as those who will take prop. if donee fails to exercise POA. i. Note that you dont have to have a taker in default. As such, if the donee fails to exercise the power, the property would merely go back to the donor or donors estate. 3. General versus Special Powers: a. General Powers: a power that is exercisable in favor of others, but also in favor of the donee himself, his estate, his creditors, or even the creditors of his estate. i. Fall-Back Presumption: if doc. doesnt specify, presume its a general POA. ii. The donee of a general power can do anything with the assets b/c they are essentially his and he would treat them as such. Thus, could : (1) appoint in favor of someone free of trust; (2) create a new power of appointment down the chain to a donee of his choice; or (3) appoint to a trustee for the benefit of some beneficiary (appoint in further trust). b. Special Powers: a power thats only exercisable in favor of others (thus, not exercisable in favor of the donee, his estate, his creditors, or the creditors of his estate.) i. Thus, unlike a gen. power, donee of a special power wouldnt regard the assets as his own.

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4. Testamentary versus Inter Vivos Presently Exercisable: powers of appointment may be created so as to be exercisable either by deed or by will or by deed alone, or by will alone. a. Testamentary: give donee power to choose by will, and only by will. b. Inter vivos: donee can exercise power at anytime, inter vivos. Usually through a TRUST. 5. Elective Share: assets off limits/not considered part of donees. estate for purp. of elec. share. 6. If general power, but have not exercised power yet: Not donees property yet. 7. Donees creditors cannot get if donee doesnt exercise that right, if only general power (unless he goes through bankruptcy). Assets not attachable to creditors until exercises right to trust property. a. Creditors can go after asssets once exercised, even if given to a 3rd party, if donee had power to appoint. b. Some state statutes reverse this rule: if intervivos and general power = creditors can attach. But only if all of the debtors other property has been attached. c. Property that is subject to a special power is off limits. d. If debtor is donor and donee: Creditors can attach if donee has general power. 8. If trust says needs to exercise power in writing, can only exercise in writing. 9. If trust says property can only go to X, property can only go to X. 10. Will be in donees estate if general power. 11. Release of a Power of Appointment: a. As a general rule, the donee of a testamentary power of appointment can not legally contract in advance that he will in the future make that appointment in favor of a particular object; however, the donee can achieve a kind of early exercise by simply releasing his power. b. Release: a voluntary and conscious surrender by the donee of his or her rights under the power of appointment. i. Available in all jurisdictions. ii. Consequence? assets go to the TiD or, in absence of a TiD, back to donor/donors estate. c. Seidel v. Werner [p.603] i. Facts: Steven owns LE + a testamentary POA, w/ his issue as TiD. Steven & wife divorce. See CN_36 for Under the div. settlement, Steven promises to exercise POA in favor of Frank and Anna addtl detail (kids) in form of trust. When S dies, his will exercised POA in favor of new wife, Edith. ii. Issue: B/c Steven agreed to exercise POA of F and S via divorce agreement and F and A are 2 of his issue (so theyre also TiDs), was this a voluntary abandonment of his rights under the power so that it was released and the assets go to his TiDs (all of his issue, so not just Frank and Anna, but including Frank and Anna rather than his current wife Edith)? iii. Holding: Not a valid release. Although F and A cited some case law holding that if the owner of a power of appointment promises to appoint to persons who are also his takers in default, the court here found that even if they agreed with that authority, on these facts, the promise under the separation agreement was not synonymous with a release. iv. Rationale: (1) language in div. agreement didnt convey intent to be a release b/c was all in future tense; (2) effects of release diff. from effects under agreement b/c: (a) under agrmnt, prop. goes only to F & A, under release to all issue; & (b) div. agrmnt called for S to create trust for F & A but if it were a release, theyd take the property outright (free of trust). v. Net Result: B/c he never exercised the power (K to do so in future is unenforceable) and because it wasnt released, his will was the first valid exercise of the power so Edith takes. 12. Exercise of a Power of Appointment a. Exercise by Residuary Clause in a Donees Will i. Setting: issue arises in 2 situations. Theres either a clause at the top of a will I hereby devise all of my assets to . OR theres a general residuary clause at the bottom of a will. ii. Key Factors: these are the key factors to look for when dealing w/ issue of whether a residuary clause in a donees will exercises a POA: a. Whether the power is general or special; and b. Whether the residuary clause is a blanket residuary clause (e.g., all the rest and residue to X versus a specific clause that actually refers to the POA or any POA).

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iii. Majority Rule: a blanket clause does not, in and of itself, exercise a power of appointment,
irrespective of whether the power is general or special. Need to reference POA to be effective. Rebuttal presumption if show intent to contrary of donee. iv. Minority View: a blanket residuary clause does exercise a general power, but not a special power. (this is the rule in Massachusetts): B/c general power = more of donees. a. Qualification unless theres language to the contrary that its not an exercise of a general power. b. New York Variation Some states, including NY, take this minority view a step further to hold that a special power of appointment may be exercised by a general clause if the residuary devisees are also the objects of the power of appointment. v. IF DIES: POSSSIBLE THE WILL USES THE DECEASED POA AND SEND PROPERTY TO WHO DECENDENT WANTED THE PROPERTY TO GO TO. vi. UPC 2-608: a general residuary clause expresses an intention to exercise a power of appointment only if either: a. The power is a general power and the creating instrument doesnt contain a gift over clause (no takers in default); or b. Ts will manifests an intent to include the property subject to the POA (meaning, a blanket clause is insufficient). c. EXCEPTION this provision only applies if there is not a requirement that the POA be exercised by a reference or by an express or specific reference to the power. vii. Beals v. State Street Bank & Trust [p. 813] a. Facts: Ts will established a trust for his wife. At her death, trust to be divided into 3 portions for each daughter, giving them a general testamentary POA, with the TiDs as their intestate heirs. One of the daughters partially released her power by limiting the objects to the testators descendants (instead of any of her intestate heirs). As such, it became a special POA. She later died without issue and her will contains a blanket residuary clause leaving the rest and residue to her sisters issue. Note that b/c her sisters kids would be the Ts grandkids, they are also objects. b. Issue: Did the residuary clause of her will effectively exercise her POA? Note that if it does, her sisters kids would take the entire share. However, if it did not, theyd only take 1/2 b/c would have to share with the other TiDs (descendants of T). c. Holding: Although this case was tried in N.Y., the court held that the donors domicile applies and, as such, Mass. law applied. Mass. follows the minority view that a general residuary clause can exercise a general POA; however, her power had changed to a special POA. Yet, the court found that this was a special case where the residuary clause should still be held to exercise her power. d. Rationale? was once a gen. power & her track record of dealing w/ power indicated that she regarded these assets as her own (whereas w/ a special power, you would not). viii. Donor May Require Specific Reference: the donor can always include provisions that require the donee to exercise the power in a certain way so as to prevent an unintentional exercise of the power. For example, the donor can provide that the power can be exercised only by an instrument that refers specifically to the power. If this is the case, courts are strict in requiring such a ref. a. E.g., Estate of Hamilton: T gives wife POA in 1966 will. Later, revokes that will and creates 1982 will, which still gives wife power. In both cases, T called for a specific reference to exercise power. Wife dies. Her will refers only to the 1966 POA. Court held that it didnt exercise her POA b/c not a specific reference to the 82 will. b. Blending Clauses: a blending clause is a blanket reference to all of your assets, including those over which you have a POA. Again, can come up in clause at top of will (all of my estate, including assets to be disposed of by any POA I may have.) or with a general residuary clause at the bottom of a will (all the rest and residue of my estate, including assets over which I have a POA to .).

See p.612 of text.

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UPC 2-704 the mere use of a blending clause is ineffective to exercise the power b/c it doesnt make a specific reference. ii. Qualification if extrinsic evidence shows the donee intended to exercise the power by a blending clause, then its okay. ix. Effect of Anti-Lapse Statutes on POA a. Premise: A has a testamentary POA. A dies and in will has exercised power in favor of B; however, B predeceased A. b. Majority Rule: although antilapse statutes typically dont cover appointment, most courts will extend them to cover general powers, but not special POA. i. Only applies to general powers ii. If Clause must still be satisfied. c. Net Result: property would go to Bs issue (appointees issue), rather than TiDs. b. Limitations on Exercise of a Special Power i. Traditional Rule: OLD RULE: a. Maybe Cant Appoint in Further Trust: donee of a special power cant appoint in further trust, even if the beneficiary is an object, unless the creating instrument expressly permits appointment to a trust for the benefit of the objects of the power. As such, could only appoint the property outright to objects. b. Maybe Cant Create a New POA Down the Chain: Assume T gives A a power to appoint among As issue. Can A exercise the power by creating in his daughter, B, a LE + a special POA to appoint among Bs children (who are also objects of the original power)? Because A could appoint outright to B, seems he could; however; the older cases are split on this point. ii. Restatement (Second) Property: Donative Transfers 19.4 a. Donee of a special power can create a general power down the chain to someone who is an object of the special power. See handout b. Donee of a special power can also create a special power in any person (even nonobject), giving that person the power to appoint to an object of the original special power. (thus, the donee is essentially delegating the POA). c. Donee of a special power can create a special power in a trustee (appoint in further trust), with the trustee having the power to appoint to objects of the original special power (thus, the donee is essentially delegating the POA). d. NOT DONATIVE TRANSFER: May just give property to object of special power. iii. Special Powers only: Exclusive versus Non-Exclusive Powers: Within the category of special powers, special powers can be further broken down as either exclusive or nonexclusive powers. Look to language of the creating instrument to ascertain Ts intent as to whether exclusive or not. a. Exclusive: donee can exclude entirely one or more objects of the power. i. Restatement 21.1 fallback presumption, special powers presumed exclusive. b. Non-Exclusive: donee must appoint some amount to each of the permissible objects. i. Premise: donee of a non-exclusive power gives only a nominal amount ($1) to A and the rest to B, so that hes not technically excluding A, but essentially is. Majority Rule: donee of a non-exclusive special POA has the right, in essence, to exclude an object by giving them only a nominal amount. Minority Rule = Illusory Appointment Rule: each potential object must receive a substantial or at least a significant amount so as to avoid a constructive exclusion.

i.

c. Fraud on a Special Power: the general rule is that an appointment in favor of a person who is
not an object of the power is invalid. Similarly, an appointment to an object for the purpose of circumventing this limitation on the power is a fraud on the power and is void to the extent it

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was motivated by such purpose. Ex: If pass $ to object who then agreed to pass that $ on to a non-object = void b/c of purpose and intent. d. Ineffective Exercises of Power i. Allocation of Assets [Special Powers] under this doctrine, if the donee blends both the appointive property and the donees own property under a common dispositive instrument See CN_37 and (usually, donees will), the blended property is allocated to the various interests in such a Allocation of way as to increase the effectiveness of the disposition w/ the goal of coming as close as we Assets handout can to the devises that T intended (in terms of amount). for examples. a. Cant BLEND IF: If language says: $ to A from appoointive property; and $ from my sesparate assets to B, cant give A separate assets because demaractes which source the funds come from = CANT USE THIS. b. BLEND: All of my proprety, including appointment powers, goes to A and B. B/C DOESNT QUALIFY WHAT SOURCE $ COMES FROM. c. Typically applies in cases involving an ineffective appointment to a non-object of a power or an appointment that violates the Rule against Perpetuities. ii. Capture [General Powers]: Try to appoint to 3rd party but appointment = ineffective but have blending language. a. General Rule: if the donee of a power makes an ineffective appointment, and the donees intent cant be given effect through allocation of assets, the general rule is that the property passes to TAKER In Default or, if none, to the donors estate Not the donee or the donees estate. However, Capture is an exception to this general rule. b. If violate rule against perpetuities; donee = dead; ect. See Case 10 on p.826 for a c. Requirements: capture is triggered when the following 2 things are true: good example. i. Donee has a general power (doesnt apply to special powers); and ii. Donee used language that indicates an intent to assume control of the appointive assets for all purposes (meaning, not merely to exercise the power, but in a way that claims ownership as if the assets were her own). d. Net Effect of Capture: if the donee fails to exercise the general POA properly, but theres been blending, the assets go to the donees estate rather than back to the donor or to the taker in default. e. Seidel v. Werner i. General rule: the donee of a testamentary power cannot legally contract in advance that he will in the future exercise this particular power in the future in favor of a particular object. ii. This makes the contract not enforceable. iii. Qualification: can achieve an early exercise by releasing the power. When you release your assets, they go to the taker in default. 13. Failure to Exercise a Power of Appointment a. Failure to Exercise General POA: if the donee of a general POA fails to exercise the power: b. If violate rule against perpetuities; donee = dead; ect => fail to exercise general power properly. i. Takers in Default (this is the general rule); or, if no takers in default ii. Donors Estate. c. Failure to Exercise Special POA: if the donee of a special POA fails to exercise the power: i. Takes in Default (again, the general rule); or, if no taker in default ii. Potential Objects in equal shares (almost a sort of implied TiD); or, as a last resort iii. Donors estate. I. Duties of the Trustee 1. Loyalty: trustee obligated to act primarily and only for the benefit of the beneficiaries of the trust. a. Self-Dealing: one consequence of this rule is that the trustee cant transact w/ the trust.

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i. Voidable: If trustee does engage in self-dealing, its voidable meaning, the beneficiaries
have the option of allowing the self-dealing transaction to stand or to reject it.

ii. No Further Inquiry Rule: If T self-deals, no further inq. into fair, reasonable, good faith
a. Qualifications: there are 2 exceptions to this, however, even if the below situations apply, the trustee is always subject to the general standard of reasonable prudence. i. Express Terms Authorize Self-Dealing: if terms of the trust authorize self-dealing, the no further inquiry rule wont apply; ii. Informed Consent by Beneficiaries: not voidable if beneficiaries consented to the transaction, provided they were given full and fair disclosure prior to transaction. iii. Types of Self-Dealing: a. Trustee selling his own personal assets to the trust; b. Trustee purchases assets from the trust; c. Conflict of Interest a generic category b/c self-dealing is one type of conflict of interest and is the most extreme example of a conflict of interest. i. In re Rothko. Not technically self-dealing b/c not selling own assets to estate or buying from it, but transaction ultimately harmed the estate. Duty of loyalty imposed on fiduciary prevents him from accepting employment from a third party who is entering into a business transaction with the trust. ii. No Further Inquiry Rule Doesnt Apply to Mere Conflict of Interest. Instead, court must look further to asses the various interests at stake. iii. If property sold to BFP who doesnt know that property was trust property, sold by trustee: Beneficiaries cannot get property back. Can only get $ back from trustee. iv. Parties that are Synonymous w/ Trustee: if the trustee sells property from the trust to the trustees attorney or even employee, most courts hold it constitutes self-dealing and, as such, a breach of the duty of loyalty. 2. Prudence a. Concern?issues usually arise in cases where T makes investments that are unreasonably risky. b. Reasonable Prudent Investor Rule: trustee is under a duty to make the kinds of investments that a reasonably prudent investor would make in dealing with his own property and assets. c. Must strike proper balance b/w risk and return (modern view). d. Duty to Diversify [the portfolio rule]w/in duty of prudence, T must diversify investments. i. There are some qualifications / exceptions see CN_40. e. Note that, notwithstanding express language that gives the trustee absolute discretion, T is always subject to the duty of reasonable prudence. f. Duty not to Delegate: cant delegate, but can seek advice T must still make ultimate decision. 3. Impartiality: Remember that, in the standard trust, there are split beneficiaries A gets income for life, principal to B. As such, issue that arises is that trustee must make decisions that generate income for the life estate beneficiary, but simultaneously needs to preserve principal for benefit of the remainder person beneficiary. 4. Subrules Relating to the Trust Property a. Duty to Collect and Protect Trust Property T has duty of obtaining possession of the trust assets w/o unnecessary delay. In the case of a testamentary trust, the trustee should collect the assets from the executor as promptly as circumstances permit. In addition, T has a duty thereafter to examine the property tendered by the executor to make sure its what the trustee ought to receive. b. Duty to Earmark Trust Property T has duty to earmark trust property. To earmark property is to designate it as trust property rather than Ts own. i. Rationale? IDs the assets as against other Creditors of the trustee; prevents unauthorized transfers by providing notice to would-be buyers (if earmarked, buyer charged w/ notice so as to not qualify as a BFP); makes it impossible for T to later claim the asset as her own. ii. Traditional Rule: if T fails to earmark and theres later a loss of any kind, T strictly liable. iii. Mod. Rule: strictly liable only if causal connect.b/w failure to earmark & loss is established

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c. Duty Not to Mingle Trust Funds w/ Others T has affirmative duty to segregate trust assets.
i. Traditional Rule: failure to do so results in strict liability for any loss. ii. Modern View: only strictly liable if causal connection is established. 5. Inform and Account to the Beneficiaries a. Must keep beneficiaries reasonably informed so that in a position to protect their interests. b. Must respond to beneficiaries request for info (subject to limitation of reasonableness). c. No general duty to provide beneficiaries notice pre-sale, but post-sale must account! d. Duty to Account and Keep Records must keep records of all transactions. Has hearing where T will give accounting and court will approve or reject. Beneficiaries can object. Effect of court approval? res ipsa effect (T not liable from that point past). Gets a clean slate.

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