WILLS & TRUSTS PROFESSOR BEGLEITER

Intestate Succession
I. General Patterns of Intestate Succession a. The law of the decedents domicile at death governs questions of succession to personal property b. The law of where the property is located (situs) governs such questions in relation to land or immovables c. Decedents property is administered where it is located d. Iowa II. Share of Surviving Spouse (SS) a. This differences from state to state b. Iowa i. Share of SS if no issue (633.211) 1. SS gets everything ii. Share of SS if there are issue from previous marriage (633.212) 1. SS gets half of real property and all personal property, or at least $50,000 Share of Issue (Whatever remains after SS takes passes to the descendents of the intestator) Counting roots: add # of living members and deceased members in a generation that have descendents that survive 1. Per stirpes (by stocks) Count roots at first level living, or dead with living kids. Take by representation the share their parents would take if living. Exception: Some statutes state that all the surviving issue of the same generation gets the same amount (no exemption in Iowa). Creates uneven distribution 2. Strict Per Capita (by head): Count heads of survivors and split equally, regardless of generation 3. Per capita with representation (Modified per Stirpes) The roots are not counted until a generation is reached with at least one living member and is then done per stirpes. Argument against this is that all the Gs are equal to I, but they all get different amounts. 4. New UPC: Per Capita at each Generation (New UPC 2-106) Count roots at first generation with a living member. Remainder comes down as a whole to the next generation and roots are counted again. This is very popular because members of the same generation will have the same share. 5. Old UPC Roots not counted until a generation with at least one living member. Per capita and skip any generation in a line where all are dead Non-Marital Children Adoption: The tendency is to treat the adopted child as if he or she had been born into the adopting family. Equitable adoption: Virtual adoption the paper work did not get done but everyone still acts as though the child is still adopted. Likely to be treated as a child because intent to adopt was there Illegitimate children: Estate of Stern v. Stern - In order for a child to inherit from their father when parents are not married, there must be a court acknowledged paternity test. This goes both ways, the father cannot inherit from the child unless there is paternity test.

WILLS & TRUSTS PROFESSOR BEGLEITER Laughing Heir: When someone shows up at the funeral, claims they are relative, and gets to inherit. Estate of Martignacco - Parentage Act dictates that a claim to establish a parent-child relationship is barred if brought more than one year after a child reaches the age of majority Disqualification for Misconduct Slayer Statute: If you kill someone then you forfeit your rights to inherit from them Uniform Simultaneous Death Act: If there is no sufficient evidence of the order of deaths, the decedents property passes as if he survived the beneficiary Advancement: A gift from a parent to a child, when parent is still alive, which represents a part of the whole of the donors estate that the child would be entitled to on the death of the parent intestate. Example: Parent makes a gift of $50,000 to start a business the argument is that this is an advancement on the childs part of the intestate. We focus on intention here did the intestate parent mean for it to be an advancement, or maybe a gift. In Iowa, we reversed the presumption and now a gift is presumed not to be an advancement unless there is a writing (by parent or child) saying that it is an advancement

Family Protection and Limits on Testation

Homestead exception: house that you live in for spouse. Iowa: you can live there for life if you give up your elected share. You own the life estate; you cannot sell. Exempt from creditors. Family and Support allowance: You get support for 12 months the allowance depends on how many dependents there are, how much you are likely to get, standard of living, etc. Dower: widow gets life estate in 1/3 land owned by decedent during marriage. Cannot be defeated by will, creditors, or inter vivos conveyances in absence of wifes consent. Curtesy: similar for Husband, but gets life interest only if there are kids. Forced Share: non-community property states. A testator can require the spouse to choose between the spouses statutory rights and whatever provision is made for the spouse in the will (elect against the will). Abatement: The order in which things are reduced to make up for lacks in the estate. Ratable abatement decreasing everyones share by a certain amount. General order for abatement: 1. Residuary legacies legacy of the estate remaining after the satisfaction of all claims and all specific, general, and demonstrative legs 2. General legacies gift of personal property that D intends to come from the general assets of the estate 3. Specific and demonstrative legacies paid from particular source if that source ahs enough money Protection of Issue from Disinheritance Pretermitted heir Statutes: Designed to avoid unintentional failure of a testators natural and probable intention. Typical statute gives an intestate share to the child who is born after the will is executed, unless the child was anticipated and clearly disinherited in the will or otherwise provided for. If you want to disinherit someone, you must do it specifically and intentionally. Intent of the testator means the intent of the testator as expressed in the writing (Estate of Glomset).

WILLS & TRUSTS PROFESSOR BEGLEITER Pretermitted Spouse: Protects form will executed before marriage. Doesnt apply if will executed in contemplation of marriage or intent to exclude her is present. Nor if the will or something else provides for her as spouse.

Execution of Wills and Grounds of Contest

Execution of Will Need writing, attestation by 3 (at least 2) witnesses, signature, and testamentary intent Requirement of Writing: Can be any reasonably permanent writing Testators Signature and Acknowledgment: Can have proxy signature, may have initials, nickname, etc. Attempt to sign but no actual signature can hold a will invalid (Allen v. Dalk) Attestation by Witness: Two or more person. Timing can be tricky - Usually witnesses must sign after testator signs, but order has been held to be not as important. Witnesses must be credible or competent. 1. Conscious presence test: If witnesses are not in physical presence, but are in conscious presence of the testator, then attestation is ok (Cunningham v. Cunningham) 2. Interested Witnesses: MPC Section 46(b) says that no shall be invalidated because it is attested by an interested witness, but there needs to be disinterested witnesses who sign as well Testamentary Intent: The most fundamental requisite of a valid will is testamentary intent Attestation Clauses and Procedures for Execution: Include an attestation clause, certified by the witnesses and reciting the events of execution and other facts to which it is desired that the witnesses attest. Attesting witnesses do not necessarily have to remember the events of the signing (Matter of Estate of Collins). 1. Unattested wills if certain minimum requirements are met, then it may be valid (like holographic wills) Statute of Frauds in order to have a valid will, it must be (1) in writing, (2) signed by testator, (3) attested and subscribed by witnesses (here, 3 or 4) Self-proving wills only by statute (In Iowa, all should be self-proving). Execute affidavit excusing witnesses for present in court. Holographic Will - A will that does not comply with the requirements above is valid as a holographic will if the signature and material portions of the document are in the testators handwriting (no witnesses required). Intent that this document is the will can be established by extrinsic evidence Harmless Error - The document will still be treated as if it satisfies if the proponent of the will establishes, by clear and convincing evidence, the decedent intended the document to constitute, the decedents will, a partial or complete revocation or the will, an addition to or an alteration of the will, a partial or complete revival of their formerly revoked will or revoked portion of a will Gratuitous Transfers: The courts should favor giving effect to an intentional exercise of this power. The courts must: 1. Be convinced that the statements of the transferor were deliberately intended to effectuate a transfer 2. The requirements of transfer may increase the reliability of the proof presented to the court

WILLS & TRUSTS PROFESSOR BEGLEITER 3. Protective function (free from undue influences) 4. Contest Grounds of contest 1. Lack of testamentary Capacity a. Metnal deficiency lack of capacity b. Mental derangement insane delusion 2. Fraud 3. Undue Influence 4. Lack of due execution Testamentary Capacity: Burden of proof on proponent, however, burden of going forward on contestant b/c presumption of capacity from showing of due execution. 1. Mental deficiency: lack of sufficient memory or understanding to execute a valid will; persons must be able to understand: a. Nature and extent of his property b. Persons who are natural objects of his bounty c. Disposition which he makes d. Appreciate those elements in relation to each other e. Form orderly desire to dispose of his property 2. Mental derangement: insane delusion that prevents an otherwise competent testator from making valid will; irrational beliefs that dont affect the will dont render the will invalid. Holding beliefs contrary to fact & reason = some evidence of mental deficiency. Only invalidates those portions that are affected by the delusion. a. Paranoia/beliefs that effect your ability to do certain things i. Pendarvis v. Gibb crazy bachelor who believed people were living in trees, but his will was fine ii. Brighteyes case gives money to spiritual church fine will Fraud False representation designed to deceive T and actually did deceive T into making a will different in terms from that which he would have made had he not been misled. Must be intentional. Remedy: the portion of the will procured by fraud is void the rest stands. Nondisclosure can constitute fraud. Elements: 1. A false statement of a material fact 2. With the knowledge of its falsity 3. In order to induce the to act 4. Together with a reliance by the on the false statement 5. To the s detriment Undue Influence must destroy the free agency of the testator at the time when the instrument is made; substitutes the will of another for that of the testator. 2 ways of proving undue influence: 1. 4 Element Test (establishing 3 with slight evidence as to the 4th may compel the inference of existence of undue influence) a. Susceptibility to undue influence

WILLS & TRUSTS PROFESSOR BEGLEITER i. Age, personality, physical and mental health, ability to handle business affairs b. Opportunity to influence c. Disposition to influence i. Willingness to do something wrong or unfair d. Coveted result i. Was this a natural bequest? Someone you just met? Secrecy or hast surrounding the change? 2. By presumption: confidential relationship + suspicious circumstances = presumption of undue influence Lack of due execution: It wasnt signed, no witnesses, etc.

Integration, Extrinsic Evidence, and Related Matters

Integration: Attach every page permanently and then sign at end. Republication by Codicil: used to add, modify, republish or revoke an existing will. It updates the will to the date of the codicil also updated references in the will to the time of codicil. Must be executed with will formalities. Problems can be raised re updating the will did the testator really mean to update everything in the will? Arguments can be made that he did not. Incorporation by Reference: doctrine allows will to refer to a letter/memo to incorporate nonexecuted documents. Common law elements: 1. Extrinsic writing must be in existence when will is executed 2. Will must refer to it as such 3. Intent to incorporate must appear in will, AND 4. Extrinsic writing must be identified with reasonable certainty and must conform to the description in will **Under UPC, you can add to a memorandum, under common law, you cannot Facts of Independent Significance: The identity of persons and property may be determined by reference to events and acts of the T and others, provided that these events and acts have independent significance. Must have substantial significance apart form their impact on the will. They would occur without regard to effect on will. Permits reference to writings not in existence at execution. Extrinsic Evidence: The will must be an ambiguity before you allow extrinsic evidence Interpretation is the process of looking for the particular testators intent by use of admissible extrinsic evidence and the terms of the will Construction is a process of presumptions that will supply a meaning to an ambiguous will where the extrinsic evidence does not reveal the testators intent 1. Look at intent first, and if you cannot find it, look at construction 2. Technical words in a will are to be taken in their technical sense, unless the context clearly indicates a contrary intention, or unless it satisfactorily appears that the will was drawn solely by the testator, and that he was unacquainted with such technical terms Patent Ambiguity appears on the face of the will Latent Ambiguity doesnt appear until extrinsic evidence is introduced. Because extrinsic evidence revealed it, extrinsic evidence can resolve it.

WILLS & TRUSTS PROFESSOR BEGLEITER Mistake in the Inducement : Although the document was as intended, the motivation underlying the will or provision in question was based on a mistaken belief. You must establish (1) that the testator was laboring under a mistake as to the fact and (2) that if the truth had been known he would have made a different disposition. These facts should appear in the will itself.

Revocation and Revival

Revocation Two requirements 1. An authorized act or instrument of revocation, and 2. An accompanying intent to revoke By Physical Act: dangerous b/c hard to determine present intent, whether the act was actually done by or in the presence of the testator, or whether the act itself revokes By Subsequent Instrument: Will or codicil. Need testamentary formalities. Intent to revoke must be clearly stated. By operation of law: generally, nothing revokes by operation of law. Revival Ways to revive a will: 1. Do a new will with the provisions in it with all formalities 2. Re-execute a will Doctrine of dependent relative revocation: a will that was assumed to have been revoked may be held not to have lost its validity. A fictional process which consists of disregarding revocation brought about by mistake on the ground that the revocation was conditional. The will that was revoked is probated. Elements: 1. Mistake of law 2. The will whose revocation is being ignored is closer to testators intent than intestacy If you have two wills, the first one was revoked and you created the second one, and now you revoke the second one, in American jurisdictions, will no. 1 cannot be revived by the mere revocation of will no. 2, depending upon construction of the statute, republication of will no. 1 may be necessary to revive the first will (New York Rule)

WILLS & TRUSTS PROFESSOR BEGLEITER

Will Contracts
The attempts of persons to contract with regard to the disposition of property on the death of one or both of the parties. These are valid as contracts! Not as wills. Not very good dont use them if you can avoid it Two types of contracts are common Contract to bequeath: One person wishes to induce another to provide care and agrees to compensate the latter by bequeathing all or part of the promisors estate. Joint and mutual wills: Typically husband and wife wish the survivor to receive the property of the first to die and then wish to assure by contract that on the survivors death, the property will pass in a certain fashion. If you accept the benefits of your significant others will, you must fulfill your end of the contract and bequeath it appropriately

Will Substitutes and Introduction to Estate Planning

I. Will substitutes a. Techniques used to substitute a will but are usually for people with fewer assets (poor mans will) b. Things like joint tenancy, joint bank accounts, etc. i. Make sure the bank accounts provide for survivorship rights because that is the only way you are getting the money outright II. Gifts to Minors a. Uniform Transfer to Minors Act (UTMA accounts) b. It creates a trust, with a set of statutory provisions, as to what a custodian can do in regards to that money III. Living Wills and Elder Law a. Living Will i. If you are competent to make decisions ii. Right to die declarations iii. What you want done to you iv. This cannot be challenged b. Durable power of attorney for health care i. Durable means it goes past competency ii. Power of Attorney means someone else gets to make the decisions iii. This can be challenged c. Power of Attorney i. Gives you the right to make decisions for others

Introduction to Trusts: Their Nature, Classification, and Use

I. Definitions: a. Trust: a device under which property is held by one or more persons for the benefit of others, the management powers and the beneficial interests being separated b. Trustee: The one who hold the property i. This is the fiduciary and must act in a manner that benefits the beneficiaries 7

WILLS & TRUSTS PROFESSOR BEGLEITER c. d. e. f. g. Beneficiary: The one for whose benefit the property is held Settlor/Trustor/Grantor: the one who creates the trust Inter Vivos (living trust): done while the settlor is alive Testamentary trust: done via will Declaration of trust: the owner of property may declare that henceforth the property is held in trust for another, and by so doing the owner or settlor becomes a trustee without a transfer to another h. Power of appointment: a person who can take actions in designation who can take the property from somebody else i. Presently exercisable power of appointment: allows you to say you want the funds Creation By will: nothing additional just valid will and trust elements: clear intent, definite beneficiaries, trust property, and trustee By transfer: transfer $ to trustee during lifetime By declaration: declare myself lifetime trustee; need present intent, but dont need delivery Classification of Trust Express trust: a trust created, either by declaration or through inter vivos or testamentary disposition, by the express and intended direction of the settlor Constructive trust: a remedial or restitutionary device under which a person who has obtained the title to property by reason of fraud or overreaching or some other unlawful or improper means is considered as holding the property for the person who has been wrongfully deprived of its ownership Resulting Trusts: When the facts and the circumstances show that a person had the intent to hold equitable title to property although legal title is in the hands of another. A resulting trust exists when the persons conduct demonstrates that the person anticipated holding a beneficial interest in the property. The holder of the legal title (trustee) simply has the obligation to convey that legal title to the holder of the equitable title (beneficiary). The return to the grantor or his/her heirs of real property after all interest in the property given to others have terminated Constructive Trusts: This is an equitable remedy. The people who currently have the land are supposed to pay it over to the person who should have received the land. Intent does not matter here this is a pure remedial device. Elements of a Trust 1. Intention to Create a Trust: I request, I wish, I desire doesnt create a legal obligation merely precatory language. Use shall 2. Trustee: A trust will not fail for want of a trustee, but a trustee must exist upon creation of a trust 3. Trust Property: The trust property may consist of virtually any property interests, whether real or personal, tangible or intangible, legal equitable 4. Beneficiaries: A valid trust requires a definite beneficiary or beneficiaries who have a right to enforce it. Nichols v. Allen - held the will was invalid because the beneficiaries are not definite enough (trust was to be distributed to such persons, societies or institutions as [the trustee] may think most deserving.). A trust for a definite class, such as children, issue, or nieces and nephews is valid

WILLS & TRUSTS PROFESSOR BEGLEITER 5. Trust Purposes: It is generally said that a trust may be created for any purpose that is not contrary to public policy. A trust is invalid if it tends to encourage disruption of a family relationship or to discourage formation or resumption of such a relationship. You only get the money if you divorce no good bum. Active v. Passive Trusts Active: Trustee actually needs legal title to the property to perform a power or duty relating to the property for the beneficiarys benefit Passive: An attempted slit of title where the trustee is merely holding legal title without any power or duties with respect to the property

Constructional Problems in Estate and Trust Distribution

I. Classes of bequests a. Specific Devises i. A gift of some particular thing or parcel of land ii. Example: Black Gucci clutch to Kendra b. General Devises i. One that is payable out of the general estate rather than one requiring distribution of or payment from particular assets ii. Example: I leave $25,000 to my sister c. Demonstrative Devises i. A gift, typically of an amount of money, payable primarily from a particular source and then from the general assets of the estate if that source fails or is inadequate ii. Example: I leave $25,000 from bank account # XXXXX at Wells Fargo to my sister d. Residuary Disposition i. A gift of whatever remains of the estate after the payment of all obligations and after all other devises have been satisfied II. Distributive Problems: Changes in the Estate a. Subsequent to the execution of a will but prior to the time an estate is distributed, many events occur that affect the operation of the will and the rights of the beneficiaries b. Changes in form are usually ok (stock splits, mergers, etc), changes in substances are usually problems Ademption: Applies only to specific gifts! Occurs when the particular property devised is not a part of the testators estate at the time of death, and the gift thereby fails. If it is a specific devise, and its not there, you dont get it To avoid ademption: Intent: Courts are split on this. Iowa is an intent state they do take intent into account when deciding if something was adeemed Construction: Classify the gift as general rather than specific, if permitted by language, or construe to refer to property that is in the estate at death Mere change in form: stock left in will was sold or traded Look to see if you classify it as specific

WILLS & TRUSTS PROFESSOR BEGLEITER If change in form (such as stock split) that is beyond testators control and does not create an ademption If specific, you get what it changed into, but if general, then you only get the original

Satisfaction: The idea is that you get property that you would have gotten in a testators will before the testator dies. A general or residuary devise (not a specific devise) may be satisfied in whole or in part by testators inter vivos gift to the devisee. Most of the time, the doctrine of satisfaction does not apply to devises of land Abatement: Not enough money in the estate to satisfy everything in the will. Pretermitted heirs/spouse couse this to happen. If no intent as to abatement is obvious from will, assumed intended to abate in the following order: 1. Intestate property 2. Residuary estate 3. General bequests 4. Specific bequest Class Gifts: Number of persons having common characteristics, the share of each is determined by the number in the class. T was group minded and the group and increase or decrease in membership after wills execution. Estate is divided proportionately: # of person and amounts to be determined later. The class will be closed at the time when any member of the class is entitled to immediate possession and enjoyment of his share (T dies) If members of class are specifically named in will, probably not a class gift If the share they shall receive is specifically mentioned, probably not class gift Lapse: When a devisee dies between the execution of the will and the death of the testator, the bequest or devise lapses that is, it fails in the absence of testamentary or statutory provision to the contrary Anti-lapse Statutes: Most states save the devise if its for a certain person, or the beneficiary is survived by issue. Nearly all anti-lapse statutes apply to the shares of the described devisees only if they leave issue alive at the testators death absent some manifestation of contrary intention, the issue are then substituted for the named beneficiary Names prevail over class description Lapsed residuary legacies become part of the residue (not intestacy) and pass with the balance of it, being content to let a general residuary clause perform its dragnet function unless a contrary disposition is demonstrably applicable (In re Slack Trust)

Creation of Trusts
I. In Iowa Requirements for Validity (633A.2102) a. A trust is created only if all of the following elements are satisfied: i. The settlor was competent and indicated an intention to create a trust ii. The same person is not the sole trustee and sole beneficiary

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WILLS & TRUSTS PROFESSOR BEGLEITER iii. The trust has a definite beneficiary or a beneficiary who will be definitely ascertained within the period of the applicable rule against perpetuities, unless the trust is a charitable trust, an honorary trust, or a trust for pets iv. The trustee has duties to perform II. The settlor must have capacity to make a valid transfer and their intent must be documented by written instrument Testamentary Trusts: The will should clearly evidence the trust intention and the other terms needed to create the trust (the trustee, the trust property, the beneficiaries, and the trust purpose). A precondition of the validity of a testamentary trust is that the will itself must be valid - but the trust is not automatically valid just because the will is valid. Semi-secret trust: Reveals in trust but doesnt reveal who the beneficiaries are. Court says that it is a resulting trust for the secret person. Secret: A bequest of devise, absolute on its face, is made to someone who has either expressly or impliedly agreed to administer the property for a specific purpose or to transfer it inter vivos or by will to another person. Court says it is a constructive trust for the secret person. Inter Vivos Trusts Requires: 1. Present intent to transfer, not a promise to create a trust 2. Delivery: Need to deliver the property into something 3. Acceptance Two basic methods used to create an inter vivos trust: Declaration (or self-declaration of trust): The settlor declares himself to be the trustee of specific property and then transfer some or all of the propertys equitable title to one or more beneficiaries. The settlor retains the legal title and is subject to self-imposed fiduciary duties Transfer (or conveyance) in trust: The settlor transfers legal title to another person as trustee and imposes fiduciary duties on that person. The settlor may retain some or all of the equitable title or transfer all of the equitable title to other persons. Special Problems of Revocable Trusts: The settlor has the power to modify, amend, or revoke the trust only if the trust instrument specifically reserves those powers to the settlor. This is the Indian Giver trust where is the transfer is they can just take it all back? Two main problems with revocable trusts: 1. Formalities a. Problems in creation of revocable trusts b. Does the power to revoke make the trust illusory? 2. Substantive a. Spousal share, rights of creditor, etc. b. Is it part of the estate at death for purposes of pretermitted heirs or spousal election? Tentative (Totten or Bank Account) Trusts: Totten trust bank account labeled X in Trust for Y. A deposit by one person of his own money, in his own name as trustee for another, standing alone, does not establish an irrevocable trust during the lifetime of the depositor (Matter of Totten).

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WILLS & TRUSTS PROFESSOR BEGLEITER Life Insurance Trusts: Trust that contains insurance policy. Unfunded: Doesnt have money in trust until life insurance matures (T dies). Upheld as a transfer of promissory right to receive assets at death as long as nothing substantive is at stake. T has transferred his promissory rights to a 3rd party. The owner of the life insurance may transfer the policy to the trustee and execute a trust agreement. This is an assignment of ownership of the life insurance policy to the trustee. The other way is to designate the trustee as beneficiary under the life insurance policy and have a trust agreement Will Substitutes and Policies Restricting Testation When will substitutes are employed to circumvent or at least may have the effect of circumventing what might be called substantive policies governing testamentary disposition Elective Share of Surviving Spouse: A major problem has long been the use of living trusts to circumvent statutes intended to prevent disinheritance of a surviving spouse. Test re whether a revocable trust is going to be included for spousal election: Real v. Illusory? Real testator divested ownership of property. Illusory the testator has not divested himself of ownership. What is not enough to make it illusory - Retaining right to revoke, Right to income, Right to control investments. What does make it illusory - Not giving up any power and testator still controls everything. Modern Rule: Assets are available for right of election if decedent had any power of appointment (revoke, amend, etc.) a. Choice of Law: More and more of the courts are focusing on the choice of law clause in the trust instrument if the choice of law clause says x law will govern and as long as there is some significant relationship to the trust, that law will govern b. Creditors: Common Law Rule creditors get nothing after death. However, some courts have said that you first must try to satisfy debts with the estate, and if the estate is insufficient, then creditors can reach into the trust to the extent that the testator could have done the same if he was still alive. This only cover lifetime creditors. Pour Over Trusts: Where a will contains a testamentary disposition for the purpose of adding property to an irrevocable or revocable inter vivos trust, or for the purpose of funding a trust pursuant to the terms of an instrument of trust executed but not funded during the testators lifetime, the intended disposition is effective. Problem 12-M in Book Who gets what? Son arguments 1. Limited incorporation by reference: cant incorporate the amendment b/c not in existence when will was executed. (Will must ID the trust, trust must be in existence, will must refer to its existence, and intent to incorporate). a. Result: $50,000 goes to D b/c amended trust is still valid; $100,000 goes to both b/c incorporation of amendment failed. 2. Invalid Pour-Over b/c violates statute of wills: Will was valid, but amendment changing the disposition of property wasnt executed with will formalities. a. Result: $50,000 to D b/c valid as amended; $100,000 passes intestate b/c will invalid. 3. Insurance Trust is void as inherently testamentary b/c no property to transfer: very weak argument today. Today all states allow insurance trusts.

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WILLS & TRUSTS PROFESSOR BEGLEITER a. Result: All passes intestate. Daughter arguments 1. Facts of Independent Significance: Persons and property that are independently significant from the will. The trust amendment is independently significant b/c insurance proceeds would be distributed through trust even if will didnt exist. The purpose for which the thing exists substitutes for will formalities. a. If it works, all property distributed through trust amendment. b. Because this trust is unfunded, maybe different. c. Chapman says that it should be independent of the will (unfounded trust ok) Janowitz says independent of bounty-giving process (amended trust isnt independent of bounty-giving process). 2. Integration of amendment: after amendment, the amendment becomes integrated with trust one document you dont look at original trust. There is only one trust instrument and it was in existence at time of will execution (though prior form). 3. Full Incorporation by Reference: Courts arent very strict about the requirements notebook = memorandum; In existence requirement includes trust + amendment; look at intent of T.

The Nature of the Beneficiaries Interests

A beneficiary can compel the trustee to carry out the terms of the trust and to administer the trust in accordance with fiduciary standards Discretionary Trust: When the trustee is given power to decide certain matters relating to the benefits to be received by beneficiaries. If trustee has simple discretion there is a standard of reasonableness. The court is permitted to control the trustee only if it can say that no reasonable person vested with the power which was conferred upon the trustee in this case could have exercised that power in the manner in which it was exercised If there is sole and absolute discretion there is no reasonableness, but they cannot act in dishonesty, bad faith, or improper motive. The trustee cannot refuse to make a decision, but other than that they have free reign. When an absolute gift is made of the sum which is compounded from the elements going into the computation of support and maintenance, it assumes the nature of any other absolute gift and is not subject to defeat by extraneous condition (Support is like a gold watch you get another even if you already have one). There are arguments the other way as well if you dont need it, why should you get it? Look at other resources available to beneficiary, Testators intent balance the needs between the beneficiary and the desire to leave funds for remaindermen. Support Trust: Restricts use for food, clothing, medical expenses, education. May be mandatory or discretionary (similar to spendthrift trusts). Beneficiaries cannot assign and creditors cant reach except for necessities (still cant be forced if discretionary). Public Benefits: There are arguments that the beneficiary should not receive so much money from trust that would negate his/her availability to public benefits (such as Medicaid, social security, etc.)

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WILLS & TRUSTS PROFESSOR BEGLEITER If it is a discretionary trust Medicaid would not be able to count it because the beneficiary has no right to demand it If it is a support trust then it is considered in Medicaid because the beneficiary has a right to it Spendthrift Trusts: It protects the beneficiary from overspending provides protections so that the beneficiary cannot assign it and prevents the creditors from reaching it. Provides a steady source of income to beneficiary. Some states limit spendthrift trusts by statutes and other restrictions. Exceptions: o The Government tax claims o Necessities food, clothing, shelter o Two more which are controversial Spouse or former spouse for alimony Most states say no! Child support Common law is about half and half re states Spendthrift Restriction is a provision of a trust that does two things: (1) prohibits the beneficiary from selling, giving away, or otherwise transferring the beneficiarys interest and (2) it prevents the beneficiarys creditors from reaching the beneficiarys interest in the trust There are public policy arguments re this type of trust: Arguments against o Deprives property of its legal incidents and attributes o Encourages irresponsible spending Arguments for: o Settlor has a right to dispose of property as he wishes o Prevents beneficiaries from becoming public burdens o Creditors have responsibility to investigate

Modification and Termination of Trusts

By Settlor: Power to revoke includes power to amend b/c you could just revoke and re-create. In most states the settled rule is that, in the absence of grounds for reformation or rescission, a trust created or declared by a written instrument is irrevocable unless a power of revocation is expressly reserved or may be implied form language contained in the instrument. Common law: If you say nothing, the trust is irrevocable. A settlor may create revocability with regards to certain matters. By Trustee: The trustee has power to terminate or modify a trust only to the extent expressly or impliedly granted by the terms of the trust. By Beneficiaries: The Claflin doctrine o Consent of all the beneficiaries This can be tricky because not all the beneficiaries may be known yet (some might not be born) Hatch case

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WILLS & TRUSTS PROFESSOR BEGLEITER So you get a GAL or someone to speak on their behalf (needs a statute) o No material purpose remaining to be accomplished Such as spendthrift clause, discretionary purpose, inter vivos trust documents, etc. Some court will look at the extrinsic evidence on something like this Doctrine or worthier title: More beneficial for the feudal overlord if heir took intestate instead of as a gift income to me for life, remainder to heirs interpreted as reversion to settlor. Applies inter vivos ONLY! Makes a trust very easy to revoke b/c only consent needed is that of the settlor. Rejected b/c no predicatability Judicial power to modify or terminate Administrative Provisions: what portion is interest/principal, where it comes from. Restatement (Second) of Trusts: The trustee can deviate from a term of the trust if circumstances change and it is necessary to deviate to carry out the purpose of the trust. Doctrine of Deviation - The deviation from the administrative provisions of a trust will be permitted by a court of equity, if (1) owing to circumstances not know to the grantor and not anticipated by him, (2)compliance would defeat or substantially impair the accomplishment of the purposes of the trust. Distributive Provisions: This is when there are changes to who gets what and are generally unfavored.

Charitable Trusts
I. In order to have a charitable trust, we need: a. A charitable purpose: i. The relief of poverty ii. The advancement of knowledge or education iii. The advancement of religion iv. The promotion of health v. Governmental or municipal purposes; and vi. Other purposes that are beneficial to the community b. It must benefit a significant amount of people and not a specific individual c. We need a public purpose d. Elements: i. Public purpose ii. Public interest is substantial not narrow/restricted iii. Benefits indefinite number of persons II. Cy Pres a. We have a valid trust and it is possible to carry out the particular trust specified by the settlor, however, it is impracticable, impossible, or illegal to do so so we execute it so as to carry out the donors intention as nearly as possible i. Impracticable means that the settlors intention would not be fulfilled by adhering to his specified purpose

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WILLS & TRUSTS PROFESSOR BEGLEITER b. For Example: left all money to a church hospital, but that particular hospital is no longer run by the church so now where does the money go? III. Probate in the sense of validating the will a. Two forms: i. Solemn form 1. Proceedings first, administration after ii. Common Form 1. Validation first, contest after

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