T&E Outline I.

INTRODUCTION Trusts and Estates Terminology Inter vivos transfer- transfer taking effect during a grantor's life is an inter vivos transfer. Testamentary transfer- transfer taking effect upon a grantor's death is a testamentary transfer. Dying testate- When a person dies leaving a will* Testator/testatrix- the person making the will.** Devise- The transfer of real property under a will. Devisee- The recipient of a devise. Legacy- The transfer of money under a will. Legatee- The recipient of a legacy (or bequest). Bequest- The transfer of personalty (i.e. not real estate or money). Legatee- The recipient of a bequest (or legacy). (not a bequestee). Executor/executrix- The person named in the will to implement the terms of the will. Dying intestate- When a person dies without a will. Intestate- The person (now dead) who has died without a will. Statute of descent and distribution- The law determining how an intestate's property is divided. Descent-How real estate passes intestate. Heir- The recipient of the intestate's real property according to the statute of descent and distribution. Distribution- How personalty passes intestate. Distributee (or next of kin)- The recipient of personalty when passed intestate. Administrator/administratrix- the individual appointed by the court to distribute the intestate's property . Administration- the process by which the personal representative collects the assets, pays the debts and distributes the surplus (under either the terms of the will or the laws of intestacy). Probate- technically refers to proving a will before a suitable court. However, probate is commonly used to refer to everything that is done by the personal representative or the court with reference to the decedent's estate. * Originally the term "will" applied only to realty and "testament" applied to personalty. But this distinction is no longer part of the current vocabulary. ** The suffix "tor" refers to a male and the suffix "trix" refers to a female. However, the modern trend is to use the "tor" suffix to refer to both males and females. A. The Power to Transmit Property at Death: Justifications and Limitations 1. General Considerations (1-10, 16-27, 931-933 (Hodel, Irving Day (CS)) No Ind. Right to Transfer at Death Jefferson- dead have no right to transfer of property, what we own in our lifetime should pass back to society, dead have no right to enforce their will on the living Policy: Equal opportunity, democratic society, money/property comes back to government and is redistributed. Policy: don't want to waste wealth on crazy things at death, social waste Blackstone- not a natural right, but civil right created by society, by custom Locke- two naturalish rights to provide for posterity Complete Control over Transfer at Death No theorist really took this extreme side of the argument in terms of natural rights government construction

Policy: incentive argument- people more likely to favor accumulations of property if you can pass on after our own lifetime. Policy: in terms of individual freedom, autonomy

Policy: we don't want money to just sit, tied up with families, no transfer at death would force that money back into the economy

Policy: could lead to less state involvement, fewer resources devoted by state

Irving Trust v. Day- (forced elective share) States can constitutionally condition, abolish or limit power of testamentary disposition Hodell- Native American trustNative Americans could have gotten around statute by takings clause prevents state from wiping out the power to pass by will and intestate, been around since feudal times, trusts too complex (may be decided differently today) There are constitutional limits to states limits on testamentary freedom Prodigenitor- intestate property used to pass to eldest male heir, abolished heirs to act badly, was abolished in England and US 2. Limitations on "dead hand" control (27-38 (Shapira); Liebermann (CS)) Testators enjoy NEARLY unrestricted right to dispose of property as they please, but not if in violation of law or public policy. Emphasis of freedom of disposition despite all the restrictions incentivizes working hard to pass on wealth, Ex: can't violate spousal rights, creditors' rights, unreasonable restraints on alienation or marriage, provisions promoting separation or divorce, impermissible racial or other categorical restrictions, provisions encouraging illegal activity, rules against perpetuities and accumulations (can't do it so your heirs on and on will be rich and won't have to worry!) Shapira v. Union National Bank- will conditioning inheritance on marrying Jewish girl is upheld not about constitutional right to marry, its about right to inherit, could completely disinherit opportunity for lawyer to use counseling skills to encourage flexibility (courts going other way cite public policy and unreasonable restriction) Lieberman- Be careful who you make your administrator: he knew me when he made me executor, knew I wouldnt disinherit my cousin Behavior testator may encourage through use of will/trust: -education/work ethic -prohibiting bad behavior, encouraging model behavior -trying to encourage you to stay in the place, run family farm, etc., keep some part of identity of testator going over time -controlling who you marry or don't marry, ages to marry we live overtime in our bloodline, descendents of your children is why marriage matters -to encourage kids to take care of you, using inheritance as a bargaining tool, if you take care of me, I will take care of you -third party providers today- SS, Medicaid, the only person back then to take care of parents were their children, spouses, substitute children/spouse -Incentives of ways to act when the person in dead and also incentives of ways to act when alive -Age-based restrictions in wills: 25- responsible, 18 if for college, 35established career, Dominant planning technique: stages, some at 18 for college, some at 25, some at 35 incentivizing certain behavior B. Transfer of the Decedent's Estate 1. Probate and Nonprobate Property (38-39, Documents (CS)) Assets: Birth Certificate- Citizenship matters for tax consequences, favorable tax treatment given to citizens

Social Security Card- Makes your spouse and children eligible for social security benefits Marriage Certificate/Partnership Contract- Lots of rules give favorable treatment in terms of holding property for those who are spouses (tenancy in the entirety, forced share, etc.) Passport- irrelevant Will Trust Agreement- inter vivos (in operation during life of person who wrote them) or testamentary (come into effect at the person's death) Savings Account- Different ways to title and add ownership interest to savings account, can be held with more than one person what is relationship of two people, actual joint owners or alternative understanding of account accounts can also have POD designation (payable on death) Certificates of Deposits (CD)- Give lump sum to bank and bank agrees to pay certain interest rate on sum as long as you don't take it out for the length of certificate. Credit Cards- debt, who is liable for the credit card debt Securities (stocks- shares in companies, held through brokerage house through brokerage account like Fidelity or Schwab; bond- loaning money to a corporation or governmental entity (municipal bond), state gov (special purpose bond), federal government; Mutual funds- portfolio of stocks, buying shares in the mutual fund that owns the stock; Bond funds- don't own the bond, own share of bond) -Many brokerage accounts can also have POD or TOD (transfer on designation, technically switching names on accounts) Retirement Accounts- (IRA, 401K, pensions) pool of money that you've paid into (sometimes employer match). Usually can go to anybody, state and federal rules allow you to give them to whoever you want, but first payout to spouse is most times required Pension- you work for a long period of time, when you retire they pay you some money (still popular in government, unionized jobs, and military) lots of rules about who they have to be paid to Life insurance- way to provide support Real Estate- joint tenancy, mortgages Property Titles Jewelry- usually depreciates over time Employee Benefits- stocks, stock sharing, stock options (most expire at death, but some have transferable rights) Non-Probate Property- doesnt go through probate court, property transfers automatically, usually on showing death certificate. Unless you have significant debt, significant family dispute, or real estate*, you probably can distribute the estate without going through probate. -Life insurance (paid by insurance company to beneficiary; contingent beneficiary if beneficiary has died) -Joint tenancy (including joint accounts and TOD/POD accounts) -Most trust interests -Annuities -Pension plan -Car (if received under will, go to DMV and provide death certificate)* Probate Property- any property that is NOT non-probate property (default category, increasingly small); Just because it is probate property does not mean that you have to go through probate process relatively few estates are actually probated WITHOUT TRUST: these would go through probate -Real Estate (Can be put into trust?) -Furniture- can probably just divide it up as long as no one disputes it 2. Administration of Decedent's Estates (39-49) -Three purpose of probate 1. To show proof of transfer of title (from decedent t heir/beneficiary so they can sell it free and clear)

2. To protect creditors (also protection to decedents estate, if creditors fail to file they are barred) 3. To distribute the assets of the estate. -Primary jurisdiction: first place you file in state where decedent is domiciled -Ancillary jurisdiction: next have to file in state where real property is -Informal Probate- overseen by court administrative staff and at the end of the day the judge stamps something (debt) -Person appointed in will as executor or in court as administrator is usually a family member (if named as executor, ask them to waive bond -Reed v. Reed: parents of decedent fighting over administrator role rule gave preference to males court justified it as just administrative ease when there are two fit candidates. Slow to shed gender stereotypes in this area, here of males financial savvy. Point is choose a administrator C. Professional Responsibility (58-63, 69-70 (Simpson)) Malpractice: Misdrafting Simpson- son sued lawyer for misdrafting will traditional rule said no privity of K between attorney and son because son is not party, only privity between attorney and decedent. -court loosens this rule to a foreseeability of harm theory limited duty to intended beneficiaries (some courts don't buy this, this case is as broad as you're going to get) -Once you can possibly be sued by the intended beneficiary, lawyer is going to want to correct it before death or convince court after death to reform the will, expansion of courts to rewrite wills to decedent's intent Conflicts of InterestEx. Attorney often is attorney for husband and wife (hidden assets, hidden family, hidden debt, hidden mistresses) tell them you will keep no secrets. Ex. Kid is asked to help with will, kid says leave all money to me, but mom is client Misuse of Trust Funds- lawyers in this field move money for clients using lawyers trust fund IF A CHECK BOUNCES, the first thing the bank does is notify the bar DONT TOUCH THE TRUST FUND II. INTESTACY: AN ESTATE PLAN BY DEFAULT Intestacy- set of default rules if you fail to contract around them (using will or trust) Partial Intestacy- when will doesnt cover all the property (especially if people do will themselves) Standing- being an intestate heir gives you standing to challenge the will. Old Common Law- engendered; women got dower (1/3 LE in real property and often 1/3 of personal property, no real property in fee simple). If woman owned property, man took care of it during life and got curtesy; 100% LE in real property. Same assumption that property should descend to issue. As long as wife lived long enough for kid to cry, you got curtesy. If wife died and child was ripped from womb after death, husband got nothing, kid got everything under an appointed guardian) Only time spouse got everything is if D had no relative If issue, spouse gets 50%, issue gets 50% If at least on kindred, Sp. took first $200,000, plus of the rest assumed that descendants want to give to bloodlines first, no matter how removed. Intestacy Statutes- try to fit many (moderate to low income) peoples desires. Common scheme: -Look across to surviving spouse -Look down to issue -Look up to ancestors -Look outward to collaterals (siblings, aunts, uncles) Modern UPC-assumes that most people would prefer to leave their assets to their spouse (over the bloodline) -carves out a little money if you have a lot of money for parent -D but not SS's children -SS but not D's children- get nothing

D-Sp. (No issue, no parent) -Spouse gets 100% -other relatives are out of the game, modern UPC doesn't go looking for kindred, or even really ancestors (beyond parents) -intestate definition of spouse is uninterested with how long you were a spouse D-Surviving Spouse and issue of D and SS only -Spouse gets 100% -idea that in theory, then it will pass down to issue -most people dying intestate have moderate means, dividing to child isn't useful D-SS, no issue of D, but parents of D -SS gets $300,000 plus 3/4 of balance -Parents get 1/4 above 300K -assumption that marriage is stronger than before and is preferred to providing for parents, parents are afterthought if you're rich D-Surviving Spouse, D and SS's issue and SS's issue not by D -SS gets $225,000 plus 1/2 -Remaining 50% goes to D's issue -SS's issue not by D gets 0 VERY IMPORTANT TO HAVE WILL IF YOU WAN T TO INCLUDE STEPCHILDREN D-Surviving Spouse, D's issue (not SS's) -$150,000 plus 50% -remaining 50% goes to D's issue (not SS's) (to protect stepchild from evil stepmom, or loving stepmom who never made a will, because no intestate scheme gives to stepchildren) -MASS TREATS THIS THE SAME AS THE LAST ONE Who Counts as Spouse? In MA and other gay marriage states, any valid marriage by state law would count as spouses 8 states have civil unions that apply intestate spousal rules to those who have registered A few more states have reciprocal beneficiary laws that may or may not include intestate succession. VERY IMPORTANT FOR SAME-SEX COUPLES TO BE TESTATE Simultaneous Death Common law- Split second rule: as long as you survive spouse by split second you take property USDA- Uniform Simultaneous Death Act: assumes each spouse predeceased the other as long as there was no sufficient evidence of survival assume property never transferred and each spouses property goes to that spouses family member New notion of survival- need to survive other person by 120 hours still not ideal (not MA), done to prevent horrific litigation concerning sufficient evidence Passing Downward and Outward Once all children are dead, how do we think about grandchildren? English (strict) per stirpes- grandchildren take as representation Modern per stirpes (per capita by representation) grandchildren take equally as a class of all the grandchildren (pre-1990 UPC) Per Capita at Each Generation (MA)- at each generation you hand out the shares to living members, pool and drop down dead shares and then divide equally at next generation Rationale: if youre going to do it for one generation, why not for all problem is that its very complicated Modern UPC uses this method, but there are critiques that it is too complex Table of Consanguinity If no issue and no spouse- parents In no issue, no spouse, no parents- first-line collateral (siblings (must only share 1 parent)) and descendents of siblings If no issue, no spouse, no parents, no siblings- second-line collaterals (grandparents) and descendents of grandparents (aunts and uncles) UPC- Only goes to 2nd line collaterals, then to people who might be closer (in-laws upwards, stepchildren)

Other states- dont stop at 2nd line Degree of relationship systems: lower number of steps wins Parentelic System- nearest collateral line takes (first, second, third, fourth) MA- Degree of relationship system (but uses closer parentelic line to break ties If you run out of heirs, escheats to the state B. Transfers to Children 1. Meaning of Children a. AdoptedAdoptees can inherit from and through adoptive parents (step-parent who adopts, child can inherit from him/her) Hall v. Vallandingham- but then couldnt take from natural uncle Adoptee can inherit from and through natural parents (UPC) WHEN: -In Family Adoption: When 1 genetic parent remains in the picture (like Hall) or adoption is by a relative (aunt, uncle, grandparent), reverses Hall (UPC says dual-inheritance from genetic and adoptive is ok) Natural parent cannot inherit from or through child (UPC) Trend probably toward breaking down distinction of in-family out of family Adult adoptions- used to be a same-sex planning technique, does two things: 1. Puts someone in as an heir under another instrument 2. Creates standing to challenge will -not easiest way to ensure support (Minary adopted wife didnt take through husband/adopted dad, donors intent more important) -law could change -Adoption is permanent, unlike divorce -Stranger to the adoption rule- Wife can inherit as an heir of husband/adoptive father, but not through husband -UPC: adoptions over 18 excluded unless theres relationship, but cant be strategically motivated -Alternative: limited (special) power of appointment Virtual adoption- equitable adoption attempts to claim that even though you werent formally adopted you should be able to inherit intestate. (particularly when child gave support to parent in old age) -Courts hesitant about equitable adoption in foster care (want to encourage strong foster care relationships) -Parent cannot take from child in this scenario b. Nonm arital- children born outside of relationship of marriage Old rule: illegitimate child was child of no one (changed so you could inherit from mother) Now: Child can inherit from father if paternity is established (even post-mortem by exhuming the body) (but distinguishes sperm donor, surrogate etc.) If you raise child as own, but not bio- still a support responsibility, inheritance is starting to follow (equitable adoption) If bio parent hasnt supported the non-marital child, he/she cannot take from the non-marital child c. Stepchildren Stepchildren- not included (later remarriages & adult stepchildren makes sense not to include them) d. Posthumous- children born after the death of one of their parents Posthumously conceived kids are non-marital because marriage ends at death Uniform Marital Parentage Act- if kid is born within 300 days of dads deathlegitimate If wife remarries within 10 months of dads death- kid can inherit from both Social Security- will pay for those who qualify as children under state law Competing interests for posthumously conceived kids:

Best interest of children Best interest of state (efficient administration of estates) Intent of donor Test: 1. Prove genetic paternity 2. Consent to be conceived 3. Consent to support the child Courts dont want to make time rules for posthumously conceived kids 2. Advancements- lifetime gift given to child -We no longer think about lifetime gifts as against the estate, unless its a gift or lifetime transfer of a house (people still think of this as advancements) -Jurisdictions where advancements ran old-fashioned way, hotchpot At death, lifetime gift theoretically goes in hotchpot and then estate is evenly divided If gift is really large, A doesnt have to give anything back -To indicate that gift is advancement, most rules say it must be in writing because proof is hard 3. Managing a Minor's Property -minor does not have capacity to manage property his/herself -Guardian of person: requires support of child for medical, educational, religious decisions -Can nominate in will or in some other document, but not binding by court, have back-ups -Guardian of property: better to keep separate from guardian of person -default, very inflexible, expensive, heavy court supervision have to preserve property until 18 when it must be delivered, no use until then -Conservatorship- more flexible than guardianship, often when someone becomes incapacitated, still a lot of court supervision, expensive -Custodianship- more power to use property, like min-trust custodian like a trustee, often requires transferring property before death, age still 18, no supervision (can ask for accounting), no real flexibility cant add instructions -Uniform Gift/Transfer to Minors Act: gifts can be made to minor without guardian- custodian during life -Trust: best option C. Bars to Succession 1. Conduct-based- abandonment or non-recognition, spousal abandonment -No fault divorce basically made this a non-issue 2. Homicide- Slayers Rule Three options: a. Slayer inherits- dont want to further punish for crime, inheritance is separate (minority) b. Slayer cannot inherit- shouldnt benefit from own wrong-doing, assumption that they have disclaimed (UPC) (most common) c. Slayer is held as constructive trustee- not actual trust, equitable remedymoving the property to heirs equitably, basically goes to the child immediately (second most common) Most courts require some kind of intent to trigger rule- drunk driving wouldnt Only need preponderance of evidence, not beyond reasonable doubt, so conviction not required -With Joint tenancy 3 choices- slayer takes 100%, joint tenancy is severed (50/50), slayer takes 0% -Simultaneous death in joint-tenancy, theres a split -Assisted suicide- controversial 2. Disclaimer- originally applied to wills, now both -If you disclaim it passes as if you had predeceased the decedent -Can be used to avoid estate/gift tax, or to protect from creditors (except IRS)

CANNOT BE USED TO INCREASE SHARES IN MODERN PER STIRPES OR PER CAPITA BY EACH GENERATION 3. Note on constructive trust (214 n.2) III. FORMALITIES OF WILLS: EXECUTION, REVOCATION AND COMPONENT PARTS A. Mental Capacity, Undue Influence and Fraud- capacity to make a will comprised of related doctrines to comprise sound mind (mental capacity, insane delusion, undue influence, duress, fraud, tortuous interference)

1. Will contests (203-207) -Very small percentage, very rarely are costs outweighed by benefits -be careful when not naming obvious intestate heirs, dramatic changes at last minute, lots of money at stake, inclusion of unexpected parties, kids get different amounts -change disp to avoid contest (give em enough to keep from coming after you) 2. Mental capacity (usually linked with another claim) Requirements: -Must be 18 or older in most jurisdictions -Sound mind (fuzzy concept) -capable of knowing or knowing (not actual knowledge because of mistakes) -your property -the natural objects of your bounty -from impartial 3rd party (you understand what society expects to be your heirs) or from your perspective -imputing societal norms -the disposition of your property -general disposition -ability to relate elements to another in an orderly desire Assumption is that you are of sound mind, attorneys should heir on side of capacity -better to die testate, after the fact the will can always be challenged -supporting freedom of testation -lawyers are not trained to determine capacity -what people have determined to be mental capacity has changed over time -functional impairments (are those the type of impairments that will get in the way) -be able to come up with some of the areas that relate to capacity test: who is their family, what is their property have to be careful -Paper the file -correspondence back and forth that attempts to document reasoning, -video (people dont look as good on camera, get nervous) -psychiatrist (might look like youre covering something up and other person can get expert) -make sure the paper doesnt end up being evidence of lack of capacity -Civil system (England) does it better: notary attests to capacity Level required is low (higher than marriage but lower than inter vivos gifts (dont want people to impoverish themselves) Lot of factors at trialWhere the burden rests: -Majority rule: contestant has burden of proof and has to prove lack of capacity -Minority rule: have to prove capacity Judge or jury- juries always side with people who lost property to non-family member, no juries in MA

3. Insane DelusionTwo-pronged test -Have to prove insane delusion (not mistake of fact) -with delusion testator would adhere to it regardless of evidence to contrary -Causation between insane delusion and dispo? Alternative explanation? Set of wills in which family members is never included can help as can explanation of reasons for disinheritance Background rule about what spouse is going to get is in back of court's mind Problem: jury has to make value judgments about social norms Modern trend to constrain this doctrine Court does not want to discount all wills written by suicidal people or those with substance abuse problems for insane delusion/lack of capacity 4. Undue influence: doctrine Psychological domination- where your will has replaced testators will Four factors: (SODR), open-ended, the burden really matters 1. Susceptible- Donor susceptible to undue influence 2. Opportunity- Wrong-doer had opportunity 3. Disposition- Wrong-doer had a disposition to exert undue influence 4. Result- The result appears to be the effect of the undue influence Burden shifting- puts burden on person defending the will to prove no undue influence -Confidential relationship (fiduciary (attorney or power of attorney), reliant (doctor or medical professional or financial advisor), and dominant/subservient (caretakers- 3rd party or adult children with vulnerable parents) Suspicious circumstances- some level of vulnerability (old lady, with attractive young lawyer, once lawyer, always lawyer couldve pushed back harder) 5. Undue influence: additional issues -Tests are murky for insane delusion and undue influence, become ways of society exerting norms on testator's will -If no mental capacity, can't write will at all -If insane delusion or undue influence, can strike certain provisions, courts have constructive trust power -If you are concerned about undue influence with a client what can you do? Conversation about family Presenting the options for disposition, here's what is likely to happen if you leave it this way Seeing client's intended disposition as a problem to be solved. If family member, etc. comes with them insist on being alone Elder Protective Services -LAWYER BENEFICIARY CAN ONLY WRITE WILL IF FAMILY MEMBER -if dispo is going to differ from intestate, should always get other lawyer 6. No Contest Clauses- if you contest, you lose what you get by the will -USELESS if not baited -not all states enforce 7. Duress and Fraud -Duress- undue influence with physical violence -Fraud In the inducement- you tell someone facts with intention & purpose of misleading In the execution- please sign this its your library card, but its the will 8. Tortious Interference with Expectancy (NOT IN MA) -Only need it if you are outside statute of limitations in probate court -Remedy is damages, wont fix will -Usually only if fraud is so pervasive you could not have found out in SOL B. Execution of Wills: Formalities and Form 1. Attested wills- write will to most restrictive setting

a. Functions -Ritual function- so we know its the testators intent (finality of intention to transfer) -Evidentiary function- written proof of intent -Protective function- to protect against undue influence, with witnesses can protect presumption of no undue influence -Channeling function- easier to understand what someone meant if it is all in the same form, faster channeling of proper and improper wills b. Writing, Signature, Attestation- UPC 502 Writing Small exceptions: oral or non-cupative wills, causa mortis gifts Doesnt have to be in handwriting, can be typed Signature-distinguishes from draft -can use mark, type or stamp, or have someone else sign if you cant question is did you intend it as signature -Subscription- sign at the end of the will Attestation of witnesses Must have two witnesses(use 3) Have to be in conscious presence- maybe can sign later, but doesnt mean they can witness later Witnesses should sign at same time- (UPC says within reasonable time) Witnesses must see testator sign or hear him acknowledge signature All witnesses should be disinterested Old days: interest witness would void will Now: purging statute- interest witness does not void will, but voids bequests to interested witness (Morea- two interested witnesses, on uninterested, but one interested not getting benefit since intestate share is bigger, so two good witnesses, third guy can keep bequest) UPC: doesnt care if witnesses are interested- most undue influencers are going to make sure that there are disinterested witnesses MA: still purges bequests of interested witnesses c. Competency of witnesses Witnesses must be mentally competent and minimum age d. Recommended method of executing wills (242-246, 50-51) Attestation clause- witnesses do not have to sign attestation clause, but creates presumption of duly executed will Self-proving affidavit- separate from attestation clause, want all witnesses to sign the will says we witnessed and signed will notarized and recorded, so witnesses dont have to come to court under UPC unless allegation of fraud or coercion almost unrebuttable presumption of due execution e. Mistakes in execution of wills--curative doctrines (switched wills) Ad hoc exception for switched identical mutual wills f. Mistakes in execution of wills--curative doctrines (substantial compliance & harmless error) UPC 502 gets rid of easy problems with formal requirements Substantial Compliance (common law, Ranney)- more conservative, as long as function of formality is fulfilled by C&C evidence, you can probate the will (supposed to be wink wink to judges, they didnt get it) Harmless Error UPC 503- more radical, gives judges power to dispense formalities, looks to intent MA doesnt adopt it (not restricted to formalities) Danger of less formality- skeuomorph how do we know what counts as a will

g. Notarized wills Trend moving toward notary instead of witnesses 2. Holographic wills (about half of states adopted 503(b)) Requirements Writing- handwriting of T Signature- by T, softer signature requirements Attestation- no attestation requirement Formalities Ritual- handwriting absorbs ritual function Evidentiary function- handwriting analysis Holographic wills trickier with Channeling and Protective function. Testamentary intent- taken as a given with formal wills (except when testator is drunk) Can argue conditional, wont get you far Broad or specific- Did he intend this dispo? OR did he intend it to be will? (MT protecting own citizen in Kuralt) Problems with form wills, not attested, not handwritten Scissors approach- 10 states- ignore form, printed language, see if just the handwritten portions form a will. Old UPC- Material provisions have to be in handwriting New UPC- Material portions no real difference, but less strict with form wills. C. Revocation- wills like vampires, only specific ways to kill it (in 503 states look to intent) 1. Writing or physical act New will: even just saying I hereby revoke previous will would be considered a new will to die intestate Codicil: replaces smaller section of the will, (partial revocation by writing),any subsequent writing that alters less than entire will If you destroy codicil, you destroy codicil and underlying will stands If you destroy the will, you destroy the codicil Can have partial revocation by physical act in some states (ex. line) -Physical Act BCDOT- Burning, cancelling, destroying, obliterating (scribbling, RI says no), tearing UPC- regardless of whether it touches the words MA- must touch words Will can be destroyed by testator or by direction of testator, in conscious presence of testator If evidence that testator had possession of will before death, but will is not found among personal effects, presumption that she destroyed will (in Harrison skips intent piece, cant intend to revoke something you thought was already revoked) -Incentivizes destroying will: if you were written out and had access to property, might be enough to rebut 2. Dependent relative revocation (ignoring revocation) and revival (revoking revocation) DRR (second best doctrine)- only revoked bc testator thought new will was good If alive, testator would first choose to fix new will (could argue substantial compliance or harmless error) Second choice would be to have old will NEED A VALID SECOND WILL FOR THIS DOCTRINE DONT NEED DRR WHEN Will 2 replaces Will 1 and Will 2 is flawed- Will 2 fails, meaning revocation of 1 never existed so Will 1 is good without DRR NEED DRR Mistake of Law- Physical revocation of Will 1 and Will 2is no good Try for Will 2 (503) DRR (get Will 1s revocation reversed) Assumes people prefer will to intestate (rebuttable)

Mistake of Fact (very limited)- need proof codicil or new will is based solely on the mistake Will 1- $1000 to Neha Codicil- Nehas dead, I revoke her will with respect to her Neha is actually alive, use DRR to reverse revocation of Will 1. DRR can be used to save little gift within will (ex. codicil valid, but has witness problem, use DRR to save witness gift under Will 1 (in states where interested witnesses matter) In states that recognize partial revocation by physical act- line through language, but rewritten portion wont come in, use DRR to bring gift back Revival: Minority rule: revocation is permanent Common law (England): whatever is left standing at end of the day is a valid will, which means to revoke you need to physically revoke Majority/UPC 509-allows you to show intent to bring earlier will back to life -revocation of codicil is presumed to automatically revive original will provision that had been changed by codicil -in case of 3 wills where 3rd revokes 2nd, hard to bring back 1st unless third says I want to bring 1st will back Milwaukee willKankakee will- torn up, blown away will When she tore up Kankakee will, she thought she was reviving Milwaukee will (wouldnt have revoked K will if M will wasnt valid) First try to revive M Use DRR to reverse revocation and use K will (second choice doctrine) Today- when testator destroys will to bring first will back to life and you can prove that, first will is revived, dont need anything else. 3. Revocation by operation of law -Most states, we presume divorce revokes the will as to spouse. -UPC, expands presumption of revocation to all non-probate transfers BUT SEE Englehoff (ERISA preempted state law no automatic revocation of life insurance at divorce) -What about ex-spouses relative? -UPC says revoke all gifts to ex-spouses relative -What about marriage? If you get married with premarital will, marriage revokes the entire will (majority?) In some states, marriage carves out intestate share for spouse, which in many states would knock out the will. (pretermitted) D. Components of a Will- how do we interpret the will? Must know what the will is 1. Integration of wills Number pages 1 of 14, etc physically connect Mostly a problem in holographic situations 2. Republication by codicil- (Sandy: once youve created world by weird rules, have to follow them)- cant fix invalid execution of a will, if invalid to begin with, its never been published, cant be republished. Will 1- interested witness Codicil 1- interested witness Codicil 2- no interested witness (EVERYTHING IS VALID)

(interested witnesses dont change validity, just purge as to interested will in states with purging statute) NEVER WRITE CODICIL AFTER DIVORCE, it will reinstate ex-spouses gift in predivorce will Most powerful effect is republication updates the publishing date of the will 3. Incorporation by reference- will references document, document is incorporated into will IF -Document was in existence when the will was executed according to when the will was written or republished by codicil -Reference doesnt have to be too specific, intent rules -Doesnt need to be stapled UPC 513: authorizes separate writing identifying tangible personal property (not real property or cash) I plan to leave a separate writing, doesnt have to be written yet cannot use for money (basically will saying I plan to leave will) -Any list left is going to be a 513 list list is binding -If you dont want it to be binding, say I am dividing my stuff up as expression of my wishes but it is not binding Other ways of dividing property: -Drawing lots: divide things into equivalent lots and then draw numbers, can trade after -First, Second, Third, Third, Second, First 4. Acts of independent significance- when can you turn to extrinsic evidence? -Doctrine where you have to look outside the will to understand what to do within will -Car now or car at death? -Almost always upheld as Act of independent significance -To my employees $1000 each, hires more workers everyone gets less (sorry) -Contents of my house -potential for fraud -Contents of my safe deposit box (1 mill in there)- low concern for fraud -Contents of dresser- when something really valuable shows up where it wouldnt normally be stored, doctrine begins to collapse, worry for fraud (not rationale) -Envelopes with stock and names on envelopes- starts to look like a will that says follow my later instructions (but still probably ok) -If you dont make argument for independent significance, goes to residuary E. Contracts Relating to Wills K to make a will or revoke a will, not considered good practice any more Almost all are caretaker cases- problem because most of the Ks are oral Oral Ks to make will not generally enforceable -Not only remedy- quantum meruit Should not be part of a divorce agreement ties up money for life buy insurance policy instead IV. CONSTRUCTION OF WILLS A. Mistaken or Ambiguous Language Old rule: no reformation more malpractice means UPC push for more reformation Exceptions to that rule (reach out to mistake of fact, but not mistakes of law) Mistakes of Fact: Ambiguity Patent (obvious): traditionally not able to be interpreted with extrinsic evidence, not reformed (give my 3 cousins of the estate)the more obvious, the less we can do Latent (hidden): no problem, extrinsic evidence allowed Equivocation: (where more than one person fits the description not reforming the will just figuring out which one its referring to) more than one person by that name, nickname Description/Details (pretty big exception)- (will gave interest to 102 colborne, actually had interest in 104 colborne, fixes it by latent

ambiguity (actually reforming but wont admit it) allows you to ignore less important particulars (the number) Mistakes of Law: Scriveners Error- basically reforms mistakes of law (not in MA) UPC 805- allows you to reform for intent for mistakes of law or fact (patent or latent) (different from scriveners error, broader) -Problems: -lawyers expect court to bail them out of every problem -opens up floodgates to litigation (defending is expensive) -safe harbor problem- you want people to feel confident that the will reflects what they wanted. Can use extrinsic evidence to prove will is not a will (even in MA) -wrote a will to induce a woman to sleep with him (extrinsic evidence proves perfectly good will is not the will) In MA can reform for tax purposes B. Pre-Deceasing Beneficiaries 1. Lapse and Anti-Lapse Statutes 1. Named beneficiary not alive? (or animal if no animal trusts) 2. Wills language tell us what to do? Condition and where it goes 3. Is beneficiary covered by anti-lapse statutes? 4. If not, common law rules? Minority: No residue of a residue- residuary takers dont pick up part of residuary that had failed (when beneficiary of part of residuary is dead, other residuary takers dont get the rest) (intestate) Modern: Purpose of residuary is to cover all the residue to avoid intestate residuary taker takes the failed part of the residue Specific gift- named object, goes to residue if lapse General gift- usually named amount of cash, goes to residue if lapse No residuary takers- intestate Anti-lapse statutes- substitution statutes, tell you who to give it to UPC 603, too complicated, states adopt 605 instead Grandparent or lineal descendants of grandparent are covered (RI covers all) -Goes down to lineal descendents of the beneficiary (like giving it to a per stirpes line -a lot of states add step children LIVING means follow common law if no named backstop SURVIVING means antilapse statutes (NEVER USE SURVIVING IF YOU WANT TO AVOID ANTI-LAPSE) 2. Notes on Class Gifts One who would have been a devisee under a class gift if he had survived the testator is treated as a devisee for purposes of this section whether his death occurred before or after the execution of the will.C. Changes in Property After Execution of Will Specific- I give Joe my car General- I give Joe $10,000 Demonstrative- hybrid a general devise/particular amount out of a specific asset If not enough executor has to find more (100 shares of stock)- usually ends up being value at death of 100 shares Dangerous, usually overvalued by testator Residuary- anything not otherwise devised Must put a residuary in the will, court will not read it in, court will assume everything else goes intestate 1. Ademption by Extinction- Specific devises ONLY If you cant find it, you dont get it (testator couldnt have wanted you to have it) Old Identity theory: (used for specific devises) Exceptions: guardian sold it, involuntary act (have it on you when you die)

Durable Power of Attorney- no, since agent and testator still have power (BUT ESTATE OF ANTON FOUND IT TO BE EXCEPTION) Springing Power of Attorney- different, only comes into effect at incapacity Now: Intent Based Theory- Makes it easier to solve complicated casesbut hard for just the regular process UPC 606 (2)(3)(4)- no time to write codicil so person should GET the property (or its value) 606 (5)(6)- more controversial (NOT IN MA) (5) anything that you require as a replacement, you get for a specifically devised item. (6) permits you to write in intended value of the specific gift Nonademption- UPC pushing toward nonademption Nonademption= the gift OR its equivalent value If you only want to give specific thing, have to write that explicitly For General Devises, executor uses general estate assets to replace gift 2. Ademption by Satisfaction- General Devises This covers situations were testator gives gift in their lifetime that is similar to something given in the will. Used with respect to GENERAL gifts. It doesnt apply to specific because if I leave you the house, and gives you the housegift has been adeemed. . Exactly like ADVANCEMENT. Called something difference because advancements = intestacy while these are devises in a will. Old theory. 100,000 to children, 100,000 to AA doesnt get anything and the rest \of the children get the 100,000 New theory. NOW its parallel to the advancements Switch presumption. If its going to be counted as satisfaction IT HAS TO BE IN WRITING (sometimes even require written proof of acceptance) Practical problemasking people to write this down is very uncomfortable conversation between beneficiaries and donors The rule does encourage and accept lifetime gifts that are often uneven So the new rule, while making sense, imposes an unexpected burden on people 3. Exoneration of Liens: Question of when you give someone property thats indebted, do you mean to give them the property (sorry about the debt) OR do you mean to give them the property and have executor to pay off the debt IE: house with mortgage; car payment with lien Old rule. That testator wanted to pay it off out of the residuary The residuary takers lose out. New rule. Reverse. Debt goes with the property And it is not enough to just tell the executor to pay off all debts.you must SPECIFICALLY instruct the executor to pay the debts when giving SPECIFIC devises. Reasoningusually the residuary is almost always the KIDS and the SPOUSE. Concern to protect the residuary takers. 4. Abatement: Wrote will when rich, live long time, spend all money and die Old Order in which eliminated Residuary General Specific IF not enough (after debt, fees) for all specific gifts, abate proportionally through pro rata based on value

New Order UPC allows testator intent to change how testator abates it (to protect residuary) Gigis will had the following provisions: $500 to each of her nephews, Bart and Justin; her 1997 Toyota Corolla to her brother, Richard; $2,500 on deposit at Citibank to her niece, Joy; and her residuary estate to her sister, Lucy. Her residuary estate was insufficient by $1,000 to pay all debts and expenses of her estate. Given this deficiency and based on the order of abatement listed above, Lucy (residuary estate), Bart and Justin (general legacies) receive nothing. Joy will still receive the $2,500 (demonstrative legacy) and Richard will receive the car (specific bequest). All four rules are reflecting a difference in the way we think about property Older days, enormous valuation on the specific thing Now there is much more concern that people get a share of the estate As tempting as this is to give specific money, give a percentage to specific gifts. V. NON-PROBATE TRANSFERS A. Will Substitutes- will transfers property at death with lifetime dominion, capable of being revoked until death. The following do the same thing so why not subject them to wills act 1. The Nonprobate Revolution Life insurance, pension/retirement accounts, bank/brokerage accounts, revocable trust, joint tenancies. Rules embedded in each asset, changes must be made internally All ok regardless of Wills Act question Trust- fiduciary relationship with respect to property, cant go looking for it Settlor (aka Grantor)- person who creates trust Trustee- holds legal title Beneficiary- hold equitable title CANT BE ONLY TRUSTEE AND ONLY BENEFICIARY Revocable Inter vivos Testamentary X No Irrevocable X X

Revocable trusts are always inter vivos Testamentary trust is always irrevocable Beneficiary of revocable trust has no standing to sue, no present interest (despite Farkas: right result, wrong rationale) Beware the joint account (bank will not argue, presumption that it is joint, irrebuttable in RI) 2. The Traditional Doctrinal Problems (398-403, Farkas) 3. The Modern UTC 603 Approach (403, 407) 4. 1969 UPC and P.O.D. transfers- retirement accounts and some bank accounts POD or TOD 5. TOD for Real Property 4 or 5 states 6. Multiparty Bank and Brokerage Accounts 7. Joint Tenancies in Real Estate Gotta watch out because it gives a present interest B. The Relationship to the Subsidiary Law of Wills 1. Revocable Trusts How do you revoke? Traditionally, by terms of trust, has to be in writing can include destruction if they want Traditionally, presumption is if you cant find it, still in effect UPC- switches presumption, if lost it is revoke because you can revoke a trust by destruction unless you specify opposite in writing Creditors only have a short time to file against estate for debts but creditors against revocable trust have longer time to file because they are under regular creditor rules, as opposed to probate rules. Probably wouldnt want to use revocable trust if you have a lot of debt.

Discretionary trust (self-settled)- doesnt protect the assets, doesnt alter creditor rights? Trust created by third-party for beneficiary is different 2. The Problem of Life Insurance Creditors cant get to life insurance Whole life insurance- remains in force for entire life of person, savings component you pay in and the policy has a value at the end of the day Term life insurance- if you dont die in term (like 20 years) beneficiaries get nothing but if you have 1 million dollar life insurance and you die 15 years into term beneficiary gets a million dollars. Only really want term, while you have kids, better savings techniques elsewhere than whole If provided by employers, covered by ERISA have to change beneficiary by telling company In order to be speedy, need to be able to trust name on policy have to change through company UPC- divorce should revoke instruments like life insurance (MA) Cook: divorce doesnt revoke them, some states follow this, some follow UPC BUT ERISA PREEMPTS (englehoff) 3. The ERISA Problem: federalism, area of traditional state concern, etc. C. Modern Estate Planning (Revocable Trust = Intervivos) 1. Use of a Revocable Trust in a Pour-Over Will Will Specific- in perfect pour-over, even specific is sent to revocable trust Residue- trustee of msb rev. trust Revocable Trust MSB rev. trust Trustee- MSB Beneficiary- life- spouse, remainder, descendents Uniform Testamentary Additions to Trusts Acts (UTATA) like 2-511 Dont even have to make trust ahead of time, can have the will create the trust blows out all traditional doctrines. Doesnt matter if there is nothing in the trust, just used as a vehicle to move property at death. Need the UTATA statute Without UTATA, problems trying to apply incorporation by reference/independent significance Testamentary trusts (created by will)- go through probate (DONT WANT IT TO BE TESTAMENTARY) Despite UTATA, make sure trust is in existence prior to when person dies (sometimes means putting in a dollar) No Trust- 2 parents, minor kids Life insurance- beneficiary $1,000,000- passes through probate Will Kids money falls into court-created trust that is overseen by trust difficult to use. BAD PLAN Testamentary Trust- 2 parents, minor kids Trust created in the will that is not created as a revocable living trust Life insurance- trustee of testamentary trust Assets- trustee of testamentary trust Spouse- life estate 50% Kids- 50% Goes through probate, trust still controlled through probate process, can also see all the terms of trust because it was created from will which is public. Revocable Trust- 2 parents, minor kids Non-Probate Assets Life insurance (trustee of MSB Rev. trust Retirement account (trustee of MSB Rev. Trust

Life insurance- RT--- can pay within 30 days usually with permission of trustee Assets- RT Cant find out terms of trust unless you sue and you only have standing to sue if you were intestate heir (sometimes) Doesnt go through probate, outside jurisdiction of probate- secrecy (good for tabloids and affairs), no delay in access to the money want speedy access to money if you have mortgage payments, tuition payments, etc. If you have a wife and mistress, you want 2 trusts because beneficiaries have access to terms of trust. Funded trust- if you move all assts in your will wont really pour over anything advantages, can have a fiduciary manage money for you, trusts can keep spouses assets separately titled or separate accounts and a joint account, child custody, if you become incompetent easy to have a co-trustee rather than guardianship, can set up a lot of detailed ways to deal with incapacity. Reason people want to have a trust doesnt have to do with taxes, has to do with minor children, how they hold assets during lifetime, avoiding probate and privacy issues, incapacitation, etc. -Trusts are not needed to give you advantage of avoiding estate tax. Estate tax very high at 5,000,000 Unified credit- 5 million, credit works against and amount of money You can subtract 5 million of everything youre passing at death, everything left over is taxed. Basically can pass up to 5 million dollars untaxed Unlimited to charities And can gift $13,000 a year to one person without having to worry about that money being in your estate can drain estate over long period of time beneficiaries dont pay taxes on that and neither do you at death encourages passing down money during life. Instead of giving 5 million to kid directly, when it goes into trust, unified credit applies, so no tax but then spouse can be given certain rights to it (life estate interest, etc.)

Unlimited marital deduction- Can move money back and forth to spouse at any amount with no tax consequences (no same-sex marriage or non-citizens) In estate planning you are arguing a package- 2 wills, at least 1 trust, 2 durable powers of attorney, 2 health care proxies, instructions about disposition of the body, and HIPPA release forms (handles transfer of money and transfer of capacity) D. Planning for Incapacity 1. Powers of Attorney Regular power of attorney- agency power to act on your behalf that extinguishes on incapacity Principal cannot act, so agent cannot act basically duplicates you, You are principal, other person is attorney in fact (agent). You can do anything the principal can do. Durable power of attorney- lasts until death, more powerful, not as powerful as a trustee has power as set forth in the document usually needs to be notarized. Agent has fiduciary duties to principal. Want it to cover incapacitation to death. Springing durable power of attorney- only come into effect at moment of incapacity. Courts have begun to allow parents to use durable powers of attorney to appoint custodians for their children Trustee- can operate until the trustee dies or is replaced or the trust ends doesnt relate to settlors lifespan. Court wants to encourage people to make decisions for you when you are incapacitated instead of the court making that decision. Nowadays people want agent to have broad power if youre incapacitated. Courts are not inclined to read broad grants of power of attorney authority when there arent specific things like gifting or something related to trusts. 2. Health Care Instruments

-Instructional directive (living will)- in your will youd say what youd want to be done in certain medical situations -Proxy directive- appoint someone to make health care decisions for you, agent (health care proxy or durable power of attorney for health care) your medical decisions. -Hybrid or combined directive- incorporates both designed to indicate what I want in these situations but can be overridden by proxy. -If you dont have medical directive, family makes decision: spouse, adult children, parents, brothers or sisters (by majority). A lot of disputes between same-sex partners and families. 3. Disposition of the Body You become intestate property of yourself collision between what you want to happen to your body and what your family want to happen to your body. Can donate your organs, instructions for disposition.

VI. RESTRICTIONS ON THE POWER OF DISPOSITION: PROTECTION OF THE SPOUSE AND CHILDREN A. Rights of the Surviving Spouse 1. Rights of Surviving Spouse to Support : Support Model Old Rules: -Dower- 1/3 life estate in all land acquired by H during his lifetime, even if sold. Purchasers required wives to release dower when buying land. Want both spouses name on deed because of t his inchoate interest. Gendered towards women. -Curtesy (doesnt really exist any more ): Life estate in all of wifes property management right for H vested on birth of children, curtesy right on Ws death. Support model: doesnt matter how long youve been married 3. Rights of Surviving Spouse to a Share of Decedents Property: Partnership model: Separate Property- property belongs to whoevers name is on title a. Choices: Spouse can: Take under the will Take Elective share (1/3 if kids or if no kids of all decedents probate property and some non-probate transfers (can choose if spouse dies testate or intestatesometimes elective will be better because of inclusion of non-probate transfers) Also get: -Social Security survivor benefit- monthly benefit to surviving spouse. -Plans covered by ERISA must have spousal payments b. Same-sex marriage and Domestic Partners In same sex couples where with same-sex marriage or robust domestic partnership laws, these state rules will apply. -But federal tax benefits arent extended to same-sex marriage Under Partnership model- length of marriage can matter Money in trust is against will c. Incompetent Surviving Spouse Court decides if no agent has been chosen Usually courts will allow a guardian to elect share on behalf of an incompetent surviving spouse if that would be in the best interests of the survivor. They disagree on whether to consider all the circumstances or only whether election will produce the most economic value for the survivor. UPC 2-212(b) takes a different approach. To the extent that the elective share includes the decedents property and nonprobate property the spouse transferred to others, that property is placed in trust for an incompetent survivor. The trustee uses the money to support the survivor (and others dependent upon the survivor). Anything left after the survivors death passes under the predeceased spouses will or goes to that spouses intestate heirs. d. Massachusetts Old fashioned elective share statute: Still on the books because no idea what to do, so havent done anything

In depends on OTHER people(looks like an old intestate statute where share of surviving spouse was different depending on other people around) Spouse = anyone qualified as a spouse, including same sex couples, qualifies AND YOU GET If there are issue elective share = 25,000 + 1/3rd LIFE ESTATE of property (similar to dower right)This is a SUPPORT model If no issue but kin (anybody blood relative) = 25,000 + LIFE ESTATE of property If nobody = 25,000 + FEE SIMPLE NOW: revocable trust becomes REACHABLE by the elective share in Massachusetts: e. Property subject to elective share Fraud on the widows shareright before death you moved your assets around so that the part that elective share could be applied to had no real assets to it Many states allow non-probate transfers to be included Doesnt reach third party created-trust if you are just beneficiary UPC: when you have a general life time appointment such that you can convert it to yourself at any moment, CAN BE REACHED BY THE ELECTIVE SHARE. if at any moment you can make it all your own, that should be reachable by the elective share. OTHER APPROACHESwhen something has landed into the revocable trust during marriage: Illusory transfer: thats not a real transfer, thats just trying to take it out of estate for purposes of taking it away from elective share Intent to defraud: if youre planning to do this ONLY for purposes of defeating the elective share, not recognized whatever the type of assets Problem with all of these approaches is that you have to sort through asset-by-asset or testator-by-taker Augmented Estate (UPC pre-1990) counting assets that spouse already has against elective share probate estate + certain nonprobate assets spouse (will, intestate, will substitutes, joint property) Augmented + Vesting UPC 2-202 (1990 + 2008) (INNOVATIVE, NOT MA) ADDS UP ALL THE PROPERTY AND THEN SPLIT IT BASED ON % OF HOW LONG MARRIAGE WAS. This is PARTNERSHIPyoure vesting in time how much each partner brings to the table 15 years requires complete vesting = 50% In some ways, attempting to embed a community property notion into At end, if you already own more than 50% of the property YOURE NOT GETTING ANYTHING. Augmented Estate = $450,000 18 year marriage = $450K/50% = $225,000 Then NET OUT wife stuff = delete life insurance, joint tenancies, wifes property = $200k $225k - $200k = $25,000 So she gets 25k ADDITIONAL to stuff she is already getting (life insurance, joint tenancy) Could also do 250,000-200,000= 50,000/2 = 25,000

If worried about surviving spouse messing it up, get waiver or bundle nonquantifiable things in will that they won't want to renounce

4.

g. Waiver (done a lot in older people marriages) Can waive elective share in pre or post marital agreement (but not if you want to get Medicaid) -in writing -voluntary -conscionable -must be disclosure or waive disclosure (never waive disclosure) -most states dont require independent counsel to waive -in theory hard to waiver, but a lot of waivers upheld 4. Rights of Surviving Spouse in Community Property Exists in west (CA, FL, 25% of population) Everything acquired in marriage, each spouse has 50% ownership States differ on separate property (but usually property acquired before marriage/gifts/inheritances Split in half at death or divorce Watch for commingling of separate property to become community property Pay attention to how the state handles life insurance bought originally before marriage but paid for with community property money Migrating Couples Because of the different systems of marital property in common law and in community property jurisdictions, couples who move between the two face a variety of problems. Under traditional conflict of laws rules, different laws can apply to different aspects of marital property. The law of the situs of real property controls that property; the law of the marital domicile at the time personal property is acquired determines its character (community or separate); and the law of the marital domicile at death determines the surviving spouses rights Separate to Community: Class examples are old people retiring from separate location to a warm weathered community property Case 9 (page 513) If they stay in IL and H dies, W gets the Elective Share of his 300k earnings (however must it is) Move to Texascommunity property state: Personal property travels with you to community property state It does NOT change. It stays separate property. Then he disinherits her, she gets half of the community property BUT they have NO community property so she gets NOTHING. LOST PROTECTION OF ELECTIVE SHARE BECAUSE COMMUNITY PROPERTY STATES DONT RECOGNIZE IT. under older models of community propertybut so unfair that not usually anymore They should have re-titled everything OR put it in a trust OR give her half. No one thinks about this. Move to Californiacommunity property statebut has QUASICOMMUNITY PROPERTY Quasi-community property acts as an elective share.

So if he died, she would get EITHER the amount of the elective share or one half. (check this) But if she dies first, she has nothing to leave Only community property IF outlives him and has NO protection If its a real property situationthe law of the state of the property, remains so the elective share can apply to the house The problem depends on SELLING the house and converting the property in one persons name or holding it all as one persons nameTHE PROPERTY LITERALLY HAS TO MOVE OUT OF STATE

Community to Separate: Case 10 (page 514) Community property to separate property in theory can keep community property designation even though you have assets in community property, sell it and buy something else in separate property stateas in once its community property it STAYS as community property even if it CHANGES FORM Ie: sell Californian house, move north and buy a new one in separate state Person has community property assetBE CAREFUL WHEN SHIFT PROPERTY BECAUSE YOU LOSE A BIG TAX ADVANTAGE: If you buy a house for 100k, that is your BASIS And you sell your house for 300k You pay tax on the GAIN = 200k When get property from someone at death, the system gives you stepped-up basisyou get the value of the house at the time of death = 300k Then if you sell it for 400k = only pay a gain of 100k HERE: If you buy the house together for 100k, on the day spouse dies property = 300k Each of you, in the original property had a basis of 50k When person dies, you think that each would have 150k valueBUT community property gives you the entire property stepped-up basis even though only getting the other half when they leave the other share to you Entire property resets at the basis! = $300,000 So when the surviving spouse sells it for $325,000you only pay $25k GAIN. HUGE ADVANTAGE!!! PROBLEM: If you move to separate state after purchase in community property When one spouse dies, only their basis is stepped upand surviving spouse keeps their basis = 50,000 + 150,000 (deceased spouses stepped-up basis) = 200k so when sells it for $325,000, you have to pay tax on $125k!!! DO NOT RETITLE COMMUNITY PROPERTY UNLESS YOU KNOW EXACTLY WHAT YOURE DOING. 6. Spouse Omitted from Premarital Will Pretermitted- usually unintentional disinheritance

Most common way is making a premarital will that gets revoked on marriage Spouse dies with premarital will- State revoke will to intestate share unless (list of issues, like in contemplation of marriage, or provided for elsewhere) (Only applies to property not taken by stepchildren) OR Elective Share (in Separate Property state)---> spouse usually takes ES in this situation B. Rights of Descendants Omitted from the Will 1. Protection from Intentional Omission You can disinherit your kids (we trust SS to take care of children), may have provided for children outside the will through other means (education) Doesnt mesh with protection of children of divorces, forced to support regardless Dont have to make it explicit but it will solve silence problem if you do If you dont you open up possibility that child was intended to be in will but omitted 2. Protection from Unintentional Omission Statutes divide on the group of children or descendents who can bring a claim (standing issue) -Any child---> any descendant -Afterborn children (only children born after execution of will)-What about republication by codicil? -Usually does not change who is afterborn Modern trend is afterborn children because it vastly limits who can file suit Exceptions to silence Intentional- intrinsic or extrinsic evidence? Married and everything is going to other parent You've been provided for somewhere else in lieu of being left out of will Under UPC- still has to be spouse and spouse had to survive and spouse has to take -protects afterborn children, but you get what other kids are getting in this situation other kids were getting nothing testator would've wanted to treat all kids the same If you use words like children, heirs, or descendents instead of naming children, then you can avoid leaving out afterborn children. If pretermitted kids get anything, they get an equal cut into what other kids are receiving

VII. TRUSTS A. Introduction Trust is technically property transferred with the intention of benefitting someone else. Trust not a thing, but a relationship. Unicef box- early example of a trust relationship Raising money for someone else is a trust relationship, can't legally take the money out can't comingle, have to keep track of it If trustee is life beneficiary, can add another trustee or specify remainder Declarations of trust- where settlor is trustee, already have property Deeds of trust- when giving to 3rd party trustee, need deed to transfer 1. Duties Duty of loyalty: must administrator trust solely in interest of the beneficiaries -Cannot self-deal (invest trust money in your mutual fund, property) -Traditional rule is no inquiry, strict liability -Commentators want to soften this up to good faith might be in best economic interest of beneficiaries but jurisdictions don't buy it Duty of impartiality- can't benefit one beneficiary over another When trust is sued (by creditors), he/she is sued in his or her capacity as a trustee on behalf of the trust. (personal property of trustee not at risk) Trustee can be sued in his/her personal capacity by beneficiary for breach of fiduciary duty at that point personal property comes into risk.

Duty to account- Trustee must keep an accounting, you have to keep contemporaneous records as a trustee. 2. Prudence Objective standard of care -Traditionally it was the Prudent Man standard (later Prudent Person standard) -cases started standing for large sweeps of assets you couldn't invest in ended up turning into a situation where the only thing you could invest in were government bonds, CDs, occasionally very conservative stocks. The problem with these types of portfolios is that inflation devalues the principle. You think you're standing in place, but you're actually slipping behind. Experts figured out that diversifying assets is a better way to invest. Look at risk and return. A good prudent portfolio diversifies high risk and low risk When experts figured this out, it became much more difficult for regular people to be a prudent investor professional management companies became more common, especially for large trusts. Tended to encourage risk in exchange for large gains. Since the crash, trends are moving back towards conservative investment for trusts. B. Creation of a Trust 1. Intent to Create Just have to have intent to benefit someone else 2. Trust vs. Gift I desire/hope/wish you would use this money for education, etc. -technically a gift, but sometimes called a precatory trust (not a real trust), means its a trust with a desire desire/hope/wish language non-enforceable as a trust. -easiest way to make this a gift is to say I wish, but don't legally require -Can you call something as a trust that really is a gift because of no delivery? -No, trustee must be getting some kind of duties to make it a trust -In order to have a good gift, you need delivery (actual, constructive, or symbolic) -Found symbolic delivery (after lawyers went back and "found" a list of book Modern trend is to call it gift and soften delivery Custodian- has expanded powers, more discretion allowed statute of limitation runs on custodial accounts (doesn't run on trust until call for accounting has been made) 3. Necessity of Trust Property -Property (Res)- calling it res gives courts a little bit of flexibility about what constitutes property. -Money, life insurance, contingent remainders (something that hasn't yet come into being, but will, ex. Spouse LE, remainder to descendents (can be res of trust) if recognized property interest can count at res. -There are statutes that allow a pour-over will to create a trust without any property in it, but lawyers often put in $1 just in case. IRS decides whether or not you owe taxes on things depending on dominion and control (property) decoupled from state trust law after Brainard Future profits on existing contract more likely to exist than contingent remainders so why can't they be res been pushed back a lot, starting to be allowed can't be highly speculative (mere expectancy) but courts don't care as much about what you put in (just not mere speculation) 4. Necessity of Trust Beneficiaries At least one ascertainable beneficiary- doesnt have to be alive (created so you could pass to future generations) Beneficiary needs to be able to enforce trust Problems- indefinite descriptions or non-human trustees -Relatives ok, but not friends (courts cant figure out who a legit enforcer was -Instead create power of appointment trustee cant make choices about limiting indefinite class, but power of appointment could. 5. Pet Trusts

Trust is every other way is ok but dog does not have power to enforce the trust -Why can't we appoint a guardian for the dog? -Human-centric law -Law not willing to change trust doctrine (ascertainable beneficiaries must be people) -Today, can solve this problem by creating an honorary trust (says trust is voidable not void) if trustee wants to undertake that, they are allowed to if they don't want to, trust fails -OR special purpose trust (48/50 states)- allowed to create pet trusts by statute statute also necessary because of rule against perpetuities Pet trusts don't care about rule against perpetuities as long as its for the life of the animal Should we allow people to give enormous amounts of money to animals? In MA, judge can reduce to reasonable amount for animals Trust needs to be inter vivos so you can trigger at incapacity of the owner (springing inter vivos trust 6. Necessity of a Written Instrument Can be oral but need clear and convincing evidence to prove existence of oral trust (UTC 407, not advisable to have oral trust fournier) If not trustee often will end up keeping property, unjustly enriched Problem: lot of potential for fraud Has to be in writing if: -It conveys land -They are testamentary trusts (trusts created by will) Important for facilitating transfer for families and charities If you don't tell court there's a trust you win If you do tell the court about the semi-secret you lose (gives money to Rev to distribute in a manner they talked about) Most semi-secret trusts are trying to take care of secret families or interracial families a long time ago. Courts continue to follow Oliffe. Huge problem. No reason to follow it any longer Court can't make power of appointment, because there at least needs to be a word to interpret a. Oral Trusts for Dispositions at Death b. Oral Inter Vivos Trusts of Land Might orally transfer land when its intended to be given back, person doesnt give it back, courts create a constructive trust because otherwise there would be unjust enrichment (clean hands, not trying to avoid probate) C. Rights of Beneficiaries D. Rights of Beneficiarys Creditors 1. Classifications Mandatory Trustee must distribute income of trust to beneficiaries (people tend not to use a lot of mandatory provisions) Allow creditors to attach, gives creditors complete rights Protective trust Looks like mandatory trust until creditors come Give you protection that ordinary non-trust beneficiary doesnt have Discretionary Trustee can have discretion over when, who and how much to make payments Not arbitrariness standard even when it seems like you're giving absolute discretion (still assumes reasonableness) Exculpatory clauses can protect lawyer, but shouldnt rely on them Dont agree to be trustee without exculpatory clause Job as trustee is not preserve trust for remainder Creditors cant attach unless Hamilton Order

-If you pay in person, you have to pay me, trustee will just not pay and try to wait it out -If they dont go away eventually, settle Child support/alimony/taxes can often pierce discretionary trust If beneficiary wants to pay creditor, trustee has discretion to pay from trust Spray trust/provision Trustee must disperse income of trust but can decide who needs what money when Sprinkle trust/provision Trustee can sprinkle some income along beneficiaries but can also put income back into principle Support trustAscertainable standard is applied to trustee (health, maintenance, lifestyle, education) that has tax consequences Spendthrift trust Super protection; protects the trust from creditors, trustee has no discretion to pay creditors, cannot pay Extra layer in addition to any of these provisions Even tort creditors blocked from spendthrift trusts Majority- piercable for child support Substantial minority says no Fed taxes can pierce What about self-settled asset protection trust? Not enough cases to know 2. Trusts for the State Supported Government creditors are the ones who are mostly concerned with self-settled asset protection trusts Medicare doesn't care about state-law interpretation of the law is basically, like IRS, they've decoupled the issue

E. Modification and Termination of Trusts How do we get rid of (irrevocable) trust? 1. Under the terms of the trust- can't skip this in drafting, in a revocable trust (you don't have to worry about this, just revoke and create a new trust) (presumption is that trust is revocable, unless specified irrevocable (traditionally the presumption was reversed)) In the terms, you can give power to beneficiary or trustee to modify allow for decanting. You could use special power of appointment 2. Settlor alive/beneficiaries agree- trust can be gotten rid of 3. Settlor dead- Court? US- in certain circumstances you can US courts are going to keep the intent of the dead settlor alive (same decisions as wills cases) we worry about individual right of the dead person to control money forever Upholding intent of testator and upholding intent of the settlor are 2 different thingsintent of testator is not going to last that long, for settlor much longer durationally Modification 1. Beneficiaries just want to modify/ Claflin- beneficiaries agree on it and modifications are not against material purpose of trust (settlor's intent) Claflin trust cannot be prematurely terminated by the beneficiary if it contravenes the wishes settlor. Claflin doctrine prohibits any modification or termination of the trust if such change contravenes the clear intent of the settler. (Hard to modify trusts under this argument you're gonna have a problem with all of these: Age based trusts Spendthrift trusts Discretionary trusts Support trusts

Trusts with Life Interest That's almost of all trusts made UTC and Restatement don't like this, want to make it easier to terminate UTC- soften Claflin standard, not inconsistent with material purposes (NOT GETTING LOT OF TRACTION) Claflin governs both modification and termination still in many jurisdictions

Beneficiaries argue for equitable deviation- in order to fulfill purposes of trust, something needs to be changed (almost always arguing changed circumstances) --> TAX SJC has power of equitable deviation in TAX purposes Stuchell- Trust created to avoid reimbursement of medicare want to decant from one trust into another trust. Court says only reason to modify would be to benefit the beneficiary (which ironically is purpose of a trust) In reality, if settlor had known, he would've made supplemental needs trust (didn't exist at the time) Court protecting the state, would benefit beneficiaries at expense of taxpayer Riddell- Settlor left money in trust to children and grandchildren one of the grandchildren had special needs taking that money not necessarily to benefit (money will go to medicare and can't take care of money on own) Court said change could be allowed if condition was something grandparent didn't know about and wouldn't substantially impair purposes of trust (hard standard to prove, hard to prove negative) both of those found here. New standard for ED- that modification furthers the purposes of the trust Special Needs Trusts- Omnibus bill in 1993- to encourage special needs trusts, willing to take hit families will be better off and be able to provide higher level of care than state can afford VERY IMPORTANT PLANNING DEVICE With respect to Modification, there has been a push towards equitable deviation 3. Note on Removal of Trustees F. Using Powers of Appointment 1. Concept and Terminology Donor: person who grants power of appointment Donee-: person who receives power of appointment, completely discretionary whether reasonable or not Object: beneficiary Power can move property without property passing through you passes from donor to the object without the donee having the property pass through them General Power of Appointment- A general power of appointment is one which allows the holder of the power to appoint to himself, his estate, his creditors, or the creditors of his or her estate. I leave my video game collection to be distributed as my son Andrew sees fit." Special/limited Power of Appointment A special power of appointment allows the recipient to distribute the designated property among a specified group or class of people, not including donee, donee's estate, creditors of donee, or creditors of donee's estate. "I leave my cactus collection to my children, my wife Pat to choose who receives which cactus." Person who creates power can include power to give power to someone else Creditors cant get to it while in donees control (except IRS, has led to erosion of idea that creditors cant get it, now many states say you can if youve exhausted all other resources) If no backstop (if power is not exercised, then to prof bloom), then reverts to donor and estate Powers of appointment must be exercised in life or by will, donor could specify who would take over power at original POAs death 2. Tax considerations If general, part of donees estate for tax purposes G. Duration of Trusts 1. Rule Against Perpetuities No interest [in real or personal property] is good unless it must vest, if at all, not later than twenty-one years after some life in being at creation of the interest.

2.

-limits the time during which property can be made subject to a contingent interest to life in being plus 21 years. Contingent interests- Interests that have not yet vested (class interests) Vest or Fail- You have to know whether the uncertainty will become certain and happen or no it will never happen (if I don't know than it's bad) A bunch of contestants, some may win, some may lose as long as you'll know within the perpetuities period (like american idol, not LOST) Has to be totally provable within perpetuities period Three patterns of Rules Against Perpetuities problem: 1. Remote vesting To A (and heirs) if the property ever stops being used for school purposes -cannot prove for sure at end of O + 21 that schools will or will not stop being used for school purposes VOID To A (and heirs) if property stops being used for school purposes within 21 years (or after death of X alive today) VALID 2. Living person= VL To Bob Allen when he turns 50. -VALID (a living person validates the problem as long as Bob Allen is alive at time, can be proven in Bob Allen's lifetime) To A and heirs when Bob Allen turns 50 -VALID (Bob is contingency but they will take within lifetime) To A and heirs 21 years after Bob Allen's death -VALID (exact timeframe Bob is validating life when he dies you still have 21 years) 3. Afterborn (Whenever class word, think afterborn) -To A's first child to turn 25. VOID- Whenever it's a class thing (grandchildren) we do not know exactly who those people are, Someone can fulfill that description after the creation of the interest -Grandchildren at 21 in a will Testator dead VALID When testator dies all his children are born at testator's death, afterborn people will always make it to 21 within 21 years of parent's death -Granchildren to 21 in a inter vivos Deed Creator alive VOID Grantor has some kids when inter vivos deed is created, if they have kids after they are afterborn and their grandkids would be an afterborn can't have two generations of afterborns When you write a trust, you add a savings clause (no matter what happens in the trust, even if you've messed it up if the trust doesn't otherwise terminate, it will terminate within the period of perpetuities. (After X's decendants living at creation of interest +21 years) 2. Older Reform -Modify the trust to make it in under the rule- if number is too big, make it 21 -Wait and See doctrine- have to wait and see if the contingency would be proved in period problem for other people waiting for property waiting like 100 years -Uniform Statutory Rule Against Perpetuities (USRAP)- make it 90 years (but people were like why 90?) 3. Abolition In 1986, tax code changed (can give up to 5 mil tax free from generation to generation forever until state rule against perpetuities ended) -DE got rid of rule against perpetuities -Other states followed suit -Allowed trust to continue forever -Take trust money and buy a huge life insurance policy (dynasty trust) -2 solutions -IRS changes this

-ALI thinks dynasty trusts are bad trying to reinstate rule against perpetuities, have the rule against perpetuities two generations down good idea, 30 years too late

VIII. CHARITABLE TRUSTS A. Nature of Charitable Purpose -Trust set up for charitable purpose without specific ascertainable beneficiaries Emphasizes way in which rules for private trusts are waived or altered significantly when purpose of assets is to benefit public Charitable purpose -Poverty, education, religion, health, government purposes, other charitable purposes -If it doesn't count in one of these categories---> benevolent -Benevolent means not a charitable trust and the trust often fails -So it will go to intestate heirs Private 1. 2. Rule Against Perpetuities Modifiable only according to Claflin rule Charitable 1. 2. 3. Not subject to RAP Cy pres doctrine State AG (in theory) enforces

3. Beneficiaries enforce 4. Private purposes 5. Tax (in theory)

4. Charitable purposes 5. More likely to be tax exempt

If you don't have a challenger to trust, most likely no one else is gonna call you out on it (maybe IRS) B. ModificationCy Pres Cy Pres 1. Impossible, impracticable (or illegal) -Should you interpret impracticable along lines of wasteful Court refuses to give to all 5 counties, too much money not a problem case is highly criticized. In some situations may make sense that too much money is impracticable (divide money among multiple purposes) 2. Settlor must have general charitable intent Must prove that settlor cared more about giving to charitable purpose than giving to that specific thing -modify to as near as possible - courts have come to assume that charitable intent is so much of the charitable trust doctrine, that we will impute it to settlors (unless you can prove that settlor only had very specific intent) Make first preference and second preference be charitable organizations so family doesn't dispute Universities put boilerplate cy pres language C. Difficulties of Supervision AG strapped for resources