WILLS AND TRUSTS - WENDEL
Terms in this set (104)
Nonprobate property (generally)
(1) Joint tenancy (2) life insurance (3) legal life estate and remainder (4) intervivos trust
Nonprobate property (CA)
(1) joint tenancy & comm prop w/right of survivorship (2) every contract w/POD clause (3) legal life estate and remainder but NO TODD (transfer on death deed), (4) inter vivos trust
Recapture doctrine 6402.5
property returns to first spouses family under certain circumstances
What real property qualifies for recapture doctrine?
2nd spouse must die within 15 years of first spouse
What personal property qualifies for recapture doctrine?
(1) 2nd spouse must die within 5 years (2) written record of ownership and (3) aggregate of #2 must be greater than $10k
Who gets what and how much under CA intestate scheme? [entire list]
(1) Surviving spouse, (2) if no surviving spouse, then issue - equally, (3) if no surviving spouse or issue then parents - equally, (4) issue of parent - equally, (5) grandparents - equally, (6) issue of grandparents - equally, (7) issue of predeceased spouse - equally, (8) next of kin - by degree of relationship, (9) surviving parents or issue of predeceased spouse, (10) escheats to the state - 100%
intestate scheme: if community property, how much does surviving spouse get?
surviving spouse gets his/her 50% outright if intestate (testate can devise however)
deceased spouse 50% goes to probate
statute devises 100% of deceased spouses 50% of comm prop
intestate scheme: if sep prop how much to surviving spouse?
100% - if no surviving issue, parents, or issue of parents; or
50% if one child, or issue of one deceased child, or no child but parents or issue of parents; or
33% if more than 1 child (alive or deceased with issue)
Recapture doctrine: assuming there is qualifying property - who gets it and in what order?
(1) issue of predeceased spouse, (2) parents of predeceased spouse, (3) issue of parents of predeceased spouse
If none of those three then "next of kin" (i.e., don't apply the doctrine)
equitable adoption burden of proof in CA
clear and convincing evidence
equitable adoption - traditional approach
contract based - must have agreement between adoptive and natural parents
equitable adoption - CA
traditional statement with a little more leeway for courts
Estate of Ford - clear and convincing evidence of intent to adopt, evidence of conduct consistent with that intent (long and enduring familial relationship). Rejected O'Neal dissent estoppel based approach - not on child's intent but focus on decedent's intent. Ford is arguably in between O'Neal majority and dissent approaches
So arguably don't need the agreement anymore - it would just be the clearest evidence of intent (think about traditional famous opinion where no agreement and under traditional no equitable adoption)
attempted adoption in CA
(a) relationship began in childhood and cont'd throughout joint lifetimes, and
(b) established by clear and convincing evidence that the foster parent/step-parent would've adopted but for a legal barrier
Attempted Adoption case (Estate of Joseph) rule
legal barrier must have cont'd until death
dissent: should've left determination to probate court
Who can challenge the status of a child in CA?
Only husband/wife can challenge status of child (who's child is it?)
e.g., If Gerri has an affair w/Fred can Fred challenge? No - only Gerri or Wendel can
what is the default parent-child inheritance?
children can inherit from and through natural parent
parents can inherit from and through child
How do children born out of wedlock inherit?
traditionally = child born out of wedlock used to have no inheritance rights
now = they have the same inheritance rights as children born to married couple; just need to establish paternity/maternity
can parents to children born out of wedlock inherit from and through the child?
Yes, so long as the parents acknowledge and support the child, then they can inherit from and through the child
NOTE that CA 6452 allows relative to acknowledge and support (which would then maybe allow natural parent to take) - statute is unclear and there is no case law on point
Equitable adoption - O'Neal Traditional Approach
Under majority rule, must show: 1) agreement by NP and AP and full performance by 2) parents and 3) child and 4) partial performance of FP (since didnt follow through with adoption) and 5) FP dies intestate
What must be established to qualify as an "issue"?
Establish parent-child relationship
what are the artificially (created by law) ways to establish a parent-child relationship?
(2) equitable adoption (no biological, no adoption, so must be based on INTENT) (O'Neal case = contract approach; Ford = CA approach)
(3) attempted adoption
What did the dissent in O'Neal argue re: equitable adoption?
Dissent argued that the court should take equitable approach and even went further: anytime child led to believe s/he was adopted should count (called estoppel based argument in Ford - CA did NOT take this approach)
Posthumously born child
child conceived before death but born after H's death (statute says within 300 days)
child born to married couple presumed to be child of NP/H
Posthumously conceived child
child conceived and born after death of NP (gender neutral)
policy concerns with posthumously conceived child
(1) best interest of the child (2) state's interest in orderly administration of estates (i.e., other heirs want their stuff - how long do they wait?), (3) decedent's reproductive rights (i.e., worst case is stealing of sperm after decedent's death; did s/he give permission? did he want to have children (w/you)?)
CA Statute re posthumously conceived child
clear and convincing evidence, child must establish the following:
(1) decedent must have expressed intent in writing
(2) W must give notice of intent to use sperm within 4 months
(3) child must be in utero within 2 years (NOT born within 2 years)
What constitutes a writing for posthumously conceived child statute?
writing must be signed and dated - no witness requirement
can be revoked by signing and dating
Advancement - common law
inter vivos gifts counted towards time of death shares
creates incentive for siblings to sue each other when parents die
Advancement - modern trend
inter vivos gifts do not count towards time of death shares
decedent can expressly write differently though
who can write that inter vivos gift counts towards time of death shares? (advancement)
donor decedent OR donee heir
If donor creates advancement writing must it be contemporaneous with gift?
Yes - BUT could still express intent, just needs to be in will (then we're talking about the doctrine of satisfaction)
If donee creates advancement writing must it be contemporaneous with gift?
NO - does not need to be contemporaneous
what language needs to be used in writing for advancement?
no magic language required - just need to adequately express intent for intervivos to count as advancements
Hotchpot under common law advancement
Assuming the presumption is not rebutted, all inter vivos gifts to the child are added back (on paper - the child is not forced to give the gift back) into the parent's probate intestate estate to create the "hotchpot." Then the hotchpot is divided equally among the decedent's heirs. Any advancement rec'd by a child is counted against that child's share of the hotchpot. The child actually receives from the parent's intestate estate only his or her share of the hotchpot minus any advancement the child has rec'd.
EX: James rec'd $400k and estate has $600k, so hotchpot is $1mil. James and Jeff get $500k each, but since James already rec'd $400k, he would $100k and Jeff would get $500k
where a party who otherwise is entitled to take from a decedent kills the decedent, the equitable principle that one should not profit from one's own wrongdoing argues against permitting the killer from taking any type of property from the decedent.
How does CA treat homicide?
CA says if intentional and felonious killing then killer gets nothing (doesn't matter whether testate or intestate, probate or nonprobate) - treat the killer as if they predeceased the decedent
Burden of proof in homicide doctrine?
Whether a killer should be able to take from his or her victim is a civil issue, not a criminal issue. A criminal conviction will have res judicata effect upon the civil issue, but an acquittal will not be the final word bc the burden of proof in a criminal case is proof beyond a reasonable doubt, while the burden of proof in a civil case is merely preponderance of the evidence. If the D is acquitted on homicide charges, but civilly found liable for the decedent's intentional and felonious wrongful death, the killer will be barred from participating in the distribution of the victim's estate.
Remedy in homicide case
General rule: treat the killer as if they predeceased the victim.
Also ask court to impose a constructive trust
Does CA punish the children for the sins of the parents in homicide doctrine?
Yes and no - s. 21110 (anti-lapse doctrine) doesn't apply so we punish the children for the sins of parents if a will is written, but we do NOT punish the children if victim dies intestate [which makes no sense]
what is a disclaimer?
a disclaimer is simply a way of expressing one's intent that he or she declines to accept a testamentary gift
how do you treat a party if they disclaim?
if a party disclaims, as a general rule, the legal significance is that the party disclaiming is treated as if she or he predeceased the decedent. The property is distributed to the next eligible taker under the various rules governing who takes in the event a taker predeceases the decedent.
benefits of disclaiming?
1. Redistribute property - disclaimers are often called a form of "post-mortem estate planning" - e.g., children disclaim so mother gets most or all of decedent's property
2. Avoid tax consequences - if one disclaims and the legal effect is simply to pass the property in question to the next taker in line, the disclaimer has no gift tax consequences
3. Avoid creditors - if the taker never held the property interest in the property, the taker's creditors never had a right to reach it (w/the exception of the federal gov't)
CA Approach to disclaimer (where does CA make division if party disclaims?)
CA treats the parties who disclaimed as alive for purposes of where to make the division (tx as predeceased for purposes of distributing shares)
Under intestate scheme, how is real property distributed?
decedent's real property is distributed according to the descent and distribution statute of the state where the real property is located
Under intestate scheme, how is personal property distributed?
decedent's personal property is distributed according to the descent and distribution statute of the state where the decedent was domiciled at the time of death
Per stirpes approach to calculating shares
(1) always make 1st division at first generation, regardless of whether there's a live taker, (2) 1 share for each person who's alive and 1 share for each person who's dead but survived by issue, (3) drop by bloodline
criticism: results in unequal shares to relatives of equal degree of descent (i.e., grandchildren with fewer siblings will end up with larger share than grandchildren with many siblings)
Per capita by representation
CA Approach - lead with this
(1) first division at 1st generation with live taker, (2) same as per stirpes (1 share for each party who's dead but survived by issue), (3) Drop by bloodline
So only difference between per capita and per stirpes is #1. Same criticism as per stirpes (unequal shares for equal degree of descent)
Per capita by generation
(1) 1st generation with live taker, (2) same as per stirpes (1 share for each person who's alive, 1 share for each person who's dead but survived by issue), (3) drop by pooling
Addresses the unequal shares issue with other two approaches - pooling results in those of equal descent taking equally. 1 and 3 different than per stirpes and 3 different than per capita
Goes out by collateral lines until the probate court finds a line in which there is a live taker
Degree of relationship approach
one simply counts the degrees of relationship between the decedent and the relative, and those relatives of the closest degree (lower degree) take to the exclusion of those of a more remote degree (higher degree)
Degree of relationship with parentelic tiebreaker
First, determine the degree of relationship of the possible takers.
Second, if there are multiple takers sharing the lowest degree of relationship, under the parentelic tiebreaker, those in the closer parentelic/collateral lines take to the exclusion of those in the more remote parentelic/collateral lines.
Posthumously conceived children and written instruments - UPC approach
a posthumously conceived child is included in a class gift in a trust or will of a third party (someone other than the predeceased done parent) so long as (1) the predeceased parent authx the posthumous use of the genetic material in a signed writing or there is clear and convincing evidence of such consent, and (2) the child is living on the distribution date or is in utero within 36 months of or is born within 45 months of the distribution date
survival requirement for probate intestate property
120 hours in CA
Determining time of death - modern trend
where circulatory or respiratory functions are artificially maintained, death occurs when there is irreversible cessation of total brain activity.
Testamentary capacity in CA
18yrs old and of "sound mind"
what is "sound mind" under CA testamentary capacity statute?
CA Statute/Andersen case:
1. Understand the nature/extent of property ("what")
2. Natural objects of your bounty ("who")
3. understand nature of the act (will)
4. understand 1-3 together (sometimes included)
NOTE: Just need to have the ABILITY to understand the nature/extent of bounty - don't need to ACTUALLY know
Presumption of testamentary capacity?
very strong presumption of testamentary capacity
when must testator have testamentary capacity?
just at time of execution of the will
Testamentary capacity and revocation?
act of revoking the will is also a testamentary act so must have testamentary capacity then as well
What are the three defects in capacity?
1. Insane delusions, 2. undue influence, and 3. fraud
anytime you have a defect, you must show causation - in CA it's "but for" causation (more protective approach) - other approach is "might have affected"
what is an insane delusion in CA?
Not insane if any factual basis to support the belief (then its just a mistake and generally do not correct will bc of mistake)
test of insane delusion?
if you laugh, it's probably insane ---> it has to be that extreme to rise to level of insane delusion; very fact sensitive
to show undue influence (common law approach)
1. opportunity (acting party)
2. susceptibility (decedent/testator)
3. motive/disposition (acting party)
4. causation -- must show substituted intent; legal inquiry/conclusion
CA burden shifting approach to undue influence
1. confidential relationship (lines up with CL #2)
2. active in procurement or execution of instrument (lines up with CL #1)
3. unduly benefit (lines up with #3 above) (subjective approach; what was relationship between decedent and beneficiary?)
Presumption of causation if all three then shifts to D
what is a no contest clause?
if you sue, you lose your right to take under the will
Dependent relative revocation (DRR)
1. valid revocation
2. based on mistake
3. but for mistake T would not have revoked
DRR: What evidence of mistake will court accept?
depends on whether revoked by act or by writing:
writing - evidence must be in writing in the new will
act - evidence of a failed alternative plan of disposition (so they want to see the failed will)
even if will validly revoked, will can still be probated - how?
1. revival (must have at least 2 wills) or 2. DRR (do not need multiple wills)
Needed to create a trust:
1. Intent to create a trust
3. ascertainable beneficiaries (objective standard)
4. writing - maybe - not function of trust law (testamentary trust - in writing, personal property - can be oral, real property - must be in writing)
Key to funding a trust
depends on who is trustee - if trustee is 3rd party, must be delivered; if trustee is also the settlor, personal property does not need to be delivered, but must be used for trust (think Hatch Lallo stock case)
when do you use a constructive trust?
to prevent unjust enrichment (typically involving some wrongful conduct)
which "way" does the constructive trust look?
forward to party with equitable claim
when do you use a resulting trust?
when trust fails for any reason
which "way" does a resulting trust look?
backwards - "trustee" gives to estate and then falls into will/intestacy or back to settlor if still alive
what is an honorary trust and when would you use it?
honorary trust is a honorable trust (not capricious or illegal) - up to honor of trustee or trust for honorable purpose
honorary trust could be used to give to pets in trust (since cannot give outright gifts in will - Roxy Russell)
modern trend: states recognize these through statute (generally, no though)
how will an honorary trust fail?
for want of a trustee - once trustee is unwilling to honor trust then trust fails and court could impose resulting trust
"I give the rest residue and remainder to Esteban to use the way we discussed" - what does this create?
"semi-secret trust" - seems to evidence a fiduciary relationship but no ascertainable beneficiaries and don't know when they get it
fails at attempted creation and becomes a resulting trust (and falls to intestacy since it was the residuary clause
what is a "secret" trust?
"I give rest residue and remainder to Esteban" then Esteban comes into court and says he was getting the stuff to use for another purpose. HELD invalid and imposed constructive trust
what must be true before you can ask for resulting or constructive trust?
must have "clean hands" (unclean hands doctrine)
Trust says "distribute to H quarterly" - what power does the T have?
mandatory requirement on trustee
trust says "T may distribute as T sees appropriate for H's comfort, maintenance , and support" What power does the trustee have?
discretionary requirement on trustee - duty to act reasonably and in good faith (objective and subjective standard)
if the trustee has sole and absolute discretion, how must the trustee act?
in good faith (but courts dont give them sole discretion)
discretionary trust - trustee's duty
trustee has a fiduciary duty, including the duty to inquire.
duty to inquire is a high bar - e.g. sending one letter with no response would not be sufficient
Constitutes abuse of discretion of trustee to refuse to give benefits when standard of living drops
Once a trust is created, a B can transfer their interest. Can creditors force this?
generally, yes bc it's freely transferable interest
How can settlor avoid B being forced to transfer interest to creditor?
spendthrift clause (B cannot voluntarily or involuntarily transfer their interest)
so creditors could not go after in trust (but could reach it after B gets the benefits)
What are the exceptions to the spendthrift clause?
1. Child support (they can pierce through spendthrift clause)
2. Gov't (i.e., IRS)
3. Spousal support (alimony)
4. Creditors who provide basic necessities
NOTE Tort creditors do NOT get any special tx and do not fall into exceptions above
Pour over will
clause in will that pours over into trust
used as incentive for people to create these trusts (think people who lived through depression)
incorporation by reference - just need to incorporate the trust instrument
acts of independent significance - refers to the funding of the trust (so much be some property in trust at time of execution of will and after death)
to validate pour over clause in will
UTATA (we're going with CA)
1. As long as terms of the trust are in separate written instrument,
2. Which is signed by testator/settlor
3. Prior to/concurrently with
Trust will be treated as I.V. trust not subject to probate court supervision, and any subsequent amendments are valid.
CA Interested drafter statute:
if you draft and take under it, presumption of wrongdoing and you dont get to take (irrebuttable)
two ways to avoid presumption:
(1) a.relative (by blood or marriage) of decedent; or b. co-habitant of decedent/testator
(2) certificate of independent review
to be a care custodian
decedent must be 1. dependent adult and must provide 2. substantial and ongoing health services - does not need to be professional (care custodians cannot take)
fraud in the execution
goes to content of the will
i.e., you tell the testator the will says something else, or assistant brings in stack of letters to be signed and one of those is the last pg of your will
can be part or all of will invalidated for fraud in the execution
fraud in the inducement
knowing, intentional misrepresentation with causation
e.g., Baccher's case (mother disinherits all but 1 kid, court found no fraud)
Elder statute: 4 elements
1. abuse or neglect
2. bad faith
3. reckless or fraudulent
4. unable to resist fraud or undue influence
NOTE significant overlaps with requirements for fraud or undue influence or insane delusions (any of the 3 defects) bc you can get more damages
tortious interference with an expectancy
3. intentional and tortious (interfering act must be separately tortious), and
benefits of tortious interference with expectancy statute
1. longer statute of limitations
2. punitive damages
3. doesnt trigger no contest clause
NOTE jrx split and within CA split
requirements for will
3 types of gifts in testamentary instrument
1. specific gift (only 1 of a kind, e.g. my vanagan)
2. general gift (e.g. $10k)
3. residuary clause (anything not specific or general - residue of prop) NOTE simple will could just have a residuary clause (e.g. young couple with no prop)
paragraph where witnesses attest to basically validity of will (it was his last will and testament and we witnessed the testator sign it)
2 variables in interpreting will
1. number of formalities (i.e., wills act)
2. open to diff alternatives - how will the court interpret? (strict vs substantial compliance)
substantial compliance (general definition)
1. clear and convincing evidence of testamentary intent (that decedent intended writing to be will)
2. clear and convincing evidence that you substantially complied with execution formalities (Wills Act)
If both then accept will as valid
CA approach to interpreting will
more like harmless error (focusing on intent) but doesn't go as far as UPC
CA HE doctrine only applies to witnessing requirement
everything else = strict compliance (signature, writing, etc.)
general rule using strict compliance
Do NOT look for a way to validate the will, look for a way to invalidate the will
CA Harmless error doctrine
- temporal component ("at the time" the will was signed) - no other jrx with this component
- burden = clear and convincing evidence
Is CA a line of sight or conscious presence state?
conscious presence - from totality of circumstances, if W understands T was signing doc, that's okay, even if cannot/didn't see T sign
conscious presence is more like harmless error/substantial compliance