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Estates and Trusts Outline 2011—Dawson Introduction: The Living and the Dead: Whose Money is it?

FREEDOM OF TESTATOR TO DEVISE HOW SHE WISHES Shapira v. Union National Bank: devisee must marry a Jewish girl within 7 years Devisee makes 3 failing arguments: 1. Unconstitutional: right to marry protected by 14th Amendement—state Action by enforcing the will-COURT—no state action; ct only giving power to executor to carry out will. Not enforcing son’s right to marry, just enforcing the restriction on inheritance (will is not constitutionally protected right—testator may legally disinherit his children) 2. Public Policy Challenge: against public policy to allow a total or general restraint on marriage—COURT: only a partial restraint on marriage (imposes only reasonable restrictions) Not like Maddox v. Maddox where there was noone to marry in small town 3. Did not encourage divorce bc we shouldn’t assume son would get married just to get divorced—a gift effective on condition of divorce would have been illegal The POLICY CONSIDERATIONS at work here is how much leeway we give to the testator—Shapira stands for the proposition that courts are willing to give quite a bit of leeway to testators. SLAYER’S RULE 1. A person who kills another may not inherit if killing is felonious and intentional. 2. If killer is insane, then intent is negated. If killing was accidental or caused by negligence, no intent. 3. Fla. Stat. § 732.802: even if there is an acquittal, an interested party can petition for a determination of guilt—determined by the greater weight of the evidence 4. If killer did kill, property passes as if the killer predeceased the decedant 5. If joint tenant, property interests severs 6. Named beneficiary on life insurance, etc…--killer not entitled (passes as if killer predeceased decedant—dead people can’t inherit) 7. Person who purchases from killer rights before killing adjudicated not responsible for the loss, but killer is liable. LAWYER’S ROLE: FIDUCIARY RESPONSIBILITY 1. A lawyer does not owe fid duty to intended beneficiaries of a will 2. A fid relationship exists when one has a special confidence in another so that the latter, in equity and good conscience, is bound to act in good faith. 3. Hotz. v. Minyard—father drafted will and included daughter in the will. Then, father drafted will without the lawyer. Lawyer misrepresented to daughter that

4. you are talking about who gets property donatively through will/intestate. Rule 4-1. Convenience accounts Fla. when you use the word probate. Stat. Whole Life: the premium the person pays is leveled—when you are younger it is relatively higher.80 f. there is a process known as informal jurisdiction. distributed to creditors.6 – 4-1. (have to be just before you are generous) 2. Lawyer also represented daughter in other business matters. 655.13 i. 222. Joint bank accounts Fla. gift is simplest way to avoid probate (intent/delivery/acceptance) 3. lawyers and then distributed according to will/intestate. 755. POD accounts Fla. Insurance is a quick payout vehicle—usually get the money within 30 days ii. In a few jurisdictions. Joint tenancies with right of survivorship/tenancies by the entirety Fla. Stat. draft valid will or 2. Gifts b. But the second part of property is administration: property collected. then don't have to go through probate. see Gruen v. (give it all away. In most jurisdictions. property pass by intestate succession 3. has no investment/cash build up—costs you pay is based on probability that you will die during . non-probate transfers (will substitutes) Probate and Administrative System: 1.15 (have to express right of survivorship) d. Held that lawyer had fid rel with daughter.82 (“trust” accounts 655. Life insurance (term or whole) Fla. gifts causus mortis (gifts made in contemplation of death/donor must fear that death is impending and immenent c. administration/probate only operates on property you own at time of death—if you don't have property in estate at death.825) g. the insured gets no wealth benefit from it.8 Confidentiality of Information/Conflict of Interest PROBATE AND NON-PROBATE TRANSFERS One can transfer property by: 1. Insurance is contract based whereas joint bank accounts and gifts are property based. Functions as an investment vehicle—build cash value—forced savings vehicle—can borrow against cash value (lock in cost of premium) iii. taxing authorities. For the most part. Administration is typically slow and expensive (need personal rep/lawyer) 3. when you are older it is relatively lower. Fla. 655. Gruen) 2. Term Life Insurance: pure insurance. Stat.she was in second will. doesn't involve probate ct unless someone chooses to go to ct—BUT NOT IN FL How do you avoid probate? 1. Stat. Stat. WILL SUBSTITUTES a. Operates very differently from other will substitutes: in most cases decedent has a property interest in the policy.79 e. 689.

2. but has legal restricts on how can be used (can't use for other child. child gets money.103 Priority Scheme: If there is anything in (1) then people in (2). Property that passes through insurance is really not property—isn't property that decedent is passing on 2. even if other child has health problems) b. ONLY way you can avoid intestate succession is to give it all away in will to someone else.…are excluded from inheriting 5. decedent dies never having executed a will b.101(1) when any part of the estate is not effectively disposed of by will. 732. 732. In FLORIDA. ins proceeds for minor children should be payable to trustee (create trust) rather than to a guardian be guardian is a cumbersome legal device and is legally controlled Elective share takes into account wealth that was in will substitute form INTESTATE SUCCESSION (STATUTES) When does intestate succession apply? 1.104 Per Stirpes (strict per stirpes) a. If child is an adult.the term. Why have intestate succession? Heaven forbid property should go to the state! It is an extension of testamentary freedom. Beneficiary has the right to receive the proceeds v. Often people are insured in the workplace—that insurance is always term iv. then most likely spouse is older and may need money more to support him/herself 4. then assumed they will be taken care of by surviving spouse (care argument is a social engineering argument) Florida statute does not give everything to spouse (UPC does) this can create some problems: a.D (even if dead) . Why don’t we worry about formalities? 1. In good estate planning. it passes to the heirs in the following ways: a. 732.(3). split A. If property owner forgot to make will. will is effective but fails to dispose of all d’s property (note: need residuary clause in well-drafted will) d. If child is minor. Insurance companies have a lot of power in state legislatures 3. it is a waste of ink to say “I hereby direct that none of my heirs in intestate succession take any of my property” disinheritance by fiat is utterly ineffective in Florida. decedent dies and will is invalid c. 732. Beneficiary has a vested interest subject ot defeasance (Dawson thinks that.C. e. spouse most likely becomes guardian of that money.s wrong) 4. 3. IS allows state to disperse it how decedent would have wanted it to be dispersed (in theory) state exercises your freedom for you.B.102 is there a surviving spouse: Why do we give surviving spouse off the top? Assumption: if all lineal descendants are same line H-W.

3 F and G get 16 k each (33. D’s line: Q=15k.103(5) last deceased spouse answer to escheat! 7. If the parties rely on the agreement.B. in Florida 732. N=5k.108 Adoption (look at statute—very complex) 9. Ford: When a caretaker takes a child inter her home. Florida recognizes equitable adoption—usually comes up when person dies and equitable adoptee arrives and says I am entitled to inherit. J=10k.107 Escheat (viewed as a bad solution by all legislatures/last resort) If everyone in family is dead when X dies. split A. O=5k 3. The doctrine is used to adjust equities between putative parent and person who was supposed to be adopted. 732.105 Halfblood only inherit half as much as those of whole blood. the child is entitled to benefits as the caretaker’s child. 732. (only applies to parent not gparents. but if all are half-blood. F=10k.105 Halfbloods (half as much) D=1 C=2 1+2=3 100/3=33. A’s line: E =10k.3/2) E gets (66k) 8. she impliedly agrees wit the child’s natural parents that she will adopt the child. 732.C. K=10k 5.X E M A F N B G O P H I C J D K Q L U 120k estate: divided strict per stirpes 1. Should the child also be entitled to inherit from the natural parent’s family members? a. X-----------------------------------------------H------------------------------------------W D A C B F G E B dies w 100k 732. they should have whole parts.103: B’s descendants = E 732. U=15k Property passes to descendants of decdent (NOT in-laws) Dead people can’t inherit 6. C’s line: I=10k. Equitable Adoption: Bean v. then estate goes to the state. siblings) 10.D 120/4 = 30k 2. Reproductive Technology: Woodward conception occurred two years after death of father—can child inherit? At some pt estate should be closed and we ought to . The parties to the contract have to have the authority to contract. BUT. B’s line: H=30k 4.

person can disclaim will or intestate) disclaimer can be a planning device/avoid taxes. Then divide remainder by # of children 125/3=42. Before death. but hub had created an inter vivos trust. If you can’t figure it out. Make hotchpotch: 190+50+10=250 Two countervailing advancement policies: a. 12. Ct responds that inter vivos trust is a valid transfer. but the next case we get. but born after then inherit. Not just theory of equalization. so B and C split except B gets 10k less because already got 10k before G dies.B. the trust will be part of elective share (notice) FLORIDA increases the value of the base for elective share purposes. so wife was entitled to elective share. 733. but impact of gifts in probate estate (effectively giving property away to punish spouse) i. use hotchpotch to equalize share of children (not spouse) i.(invites litigation. In Florida. then divide rest by 3. survived by H(spouse) and A. then same admin fees. but statute written in 1974 before the issue really came up. so and so lived a nanosecond longer)—sub issue: if N and R die at same time and N inherits from R.601 Simultaneous Death: this statute will rarely be applied bc with technology.move on.106. get ~42. 732. but not enough left in estate. says that if conceived before death. treat each person as if that person survived. but never divorced. Burkin: couple ha been separated for years. we can almost always figure out who died first. 190+10=200 H=100.2035 is the base—primarily non-probate transfers—essentially a bookkeeping/paper exercise . 739. B=40.203 Disclaimer (In Florida. CL way(a. Since there is not enough money in the estate now (only 190-125=65). W argued that the trust wasn’t a transfer out of the estate. b. Ex: G dies with 190k. if it then passes to N. R’s money has been administered. so it was hub’s when he died. Then W said I should be able to assert elective share over trust and court says no not this time. H gets ½=125.401 Baird case—statute in Q in this case did not provide for disclaimer before decedent had died (but this wouldn't work in Florida bc disclaimer can be made at any time) 14. drop A50k out. H gets ½= 125 ii. the statute is unclear ELECTIVE SHARE Sullivan v. property that the decedent gave during lifetime to an heir is treated as an advancement if declared in a contemporaneous writing by the decedent or acknowledged in writing by heir. C=50 Not sure how we do it in Florida.806 Advancement: If person dies intestate. 190+60=250 ii. 732.C (kids). so there is essentially double taxation before it gets to heirs. 739. 11.) or THIS was. 13. gives A 50k and B 10k. what hotchpotch is doing is taking account of gifts that have depleted the money that the heirs should have gotten—including the amount spouse gets intestate. 732.

etc. paralegals as witnesses. IN florida all witness is doing is witnessing the signature.. if testator is blind—exception to sight test rule v. testator had to say “this is my will”. 732.) and ask hard questions: children out of wedlock (explain potential conflict of interest) 3.402 Exempt Property 732.403 Family Allowance WILLS-FORMALITIES What steps do you follow to make a will? 1. vi.2075 where to get $ for elective share (priority statute) FAMILY PROTECTION 732. In older statutes. in interview ask what she wants to accomplish (tax. Can use “no undue influence” i.503 Self-proof of will g. testator must sign OR (do not have to be in presence of witnesses when signing—just need acknowledgement of signature) ii. then this would cover you if decedent moves before she dies)—have to worry about requirements in other jurisdictions and extras don’t hurt b. Choose secretaries. 732. meet to execute the will—statute kicks in (formalities are an issue) a. s. not family members bc that can raise questions of undue influence NO ONE who takes a gift under the will c. 732.o. 732. Testator must ask witnesses to sign in some states f. Attorney shouldn’t witness because rules of professional conduct 4-3. 2 disinterested witnesses to attest [w/ self-proving affidavit](3 witnesses to be safe if in another state they require 3 signatures. creates a presumption of valid execution. else writes testator’s name at end iii. testator must see the witnesses sign and witnesses must see each other sign (sight test for presence) iv. but can be used to impeach . Attestation clause: can use “of sound mind” to deal with mental issues.7: can’t represent client if you have to testify and wills are cheap.502 Execute will: i. but can't if you have to testify about the validity of the will d. what you want to be is the lawyer for the estate. develop a questionnaire to send to client before interview 2. Boilerplate language stating that all formalities were abided by in execution.732.2065 Elective Share = 30% of the ELECTIVE estate 732.504 any competent person can witness e. send prelim draft to client 4.4015 Homestead 732. (elective share estate is almost always larger than the probate estate).2045 are the exclusions. but still better for witnesses to know that it is a will.

5105 Republication of wills by codicil a. All of stocks in safety deposit box to people whose names are on the envelope would not qualify bc not independent of testamentary intent. X would qualify. Internally connect will (clause 5 refers to clause 1) 2. 3. then not integrated b. 3/10. 732. identification—sufficient description of the will c. 732. 732.512(2) Facts of Independent Legal Significance a. 732. 732. Staple pages together iv. Codicils are documents that are executed with the formalities of the will that change provisions in the will—codicil incorporates the underlying will by reference b. If page inadvertently left in. 732.ii.511 Republication of wills by reexecution: can reexecute using formalities 9. All the cash in my kitchen drawer would not qualify if cash was put there just to give to Charles. “in existence when will is executed” c. make sure you put on each page 1/10. “intent to incorporate” d. c. “a writing” b. Devise to all my children alive at my time of death would qualify. a. Initial each page before signing (testator and witnesses) just to show pages were there at execution) iii. intent to validate or revive. If page was left out accidentally. then no intent so not integrated i.515 Separate writing indentifying devises of tangible property 4. 2/10.508 revival by revocation 7. 6. 90. d. b. 732. Integration doctrine: a paper is integrated into the will if it was present at the time the will was executed and the testator intended to include it in the will. permits a court to give effect to events which would change the disposition of testator’s estate after execution—so long as those events have independent significance. 732.608 who may impeach iii.509 Revocation of a codicil 8.512 Incorporation be reference a. Nothing in Florida statute says you have to have attestation clause and it can be used to impeach WHAT CONSTITUTES THE WILL 1. doc must be sufficiently indentified in the will 5. etc… ii. So. Elements: physical existence of a will. Effect: restoration of the underlying will plus all prior valid codicils that are not inconsistent with the reviving codicil and all invalid or inconsistent codicils that are specifically identified by the reviving codicil.513 devise to trustee: CHANGES OF PEOPLE AND PROPERTY AFTER EXECUTION . Devise to “all employees of co.

6005 Rules of Construction and intention: there is no bright line rule here a.805: i. specifically devised property (gift of only that property. patent: ambiguity obvious on the face of the provision: 1. Four categories of will gifts 1. 732. property passing by intestacy ii. Lapse: When a devisee named in the will dies before the testator’s death. b. In Florida INTENT does matter—specific gift is adeemed only if testator had intent to adeem when she disposed of property during her lifetime. BUT FLORIDA doesn’t follow that rule. ex: to my children. Intent doesn’t matter if property is not there. devisee takes nothing b. General Rule: Where property is specifically devised and not in estate. then rest due becomes a general gift. Ademption: doctrine for what happens when specifically devised property is no longer in estate.604 Failure of a Testamentary Provision CONSTRUCTION OF WILLS 1. then extrinsic evidence may be used to clarify those terms i. general gift 3. 732. Children should be interpreted in the normal sense unless language from the will itself indicates otherwise. Abatement: determines the priority order among various devisees when the value of the estate is insufficient to satisfy all of the devisees in the will a. to entent not enough $ out of proceeds of demonstrative gift. no substitute or proceeds from) AND demonstrative gift (payment of $ from a specific source—30k from Ford Explorer) a. courts less willing to admit extrinsic evidence 2. 733. 732.806) 3. then devise generally lapses unless the jurisdiction’s anti-lapse statute preserves the devise. Later in will T leaves residuary to Jane and June and states . the court will look to the rest of the will to resolve the ambiguity. plain meaning rule (whose plain meaning?) i.603 Anti-Lapse Statute b. Ambiguity: if the terms of the will are ambiguous. Ex. 2. June and Mary. (think about devising car and then car crash) c. 732. To my daughters Jane and Jane. words should be given their ordinary. plain meaning ii. 732. a.606 Nonademption of specific devises in certain cases d. When a will provision creates an ambiguity obvious on the face of the provision (patent). a. residual gift 2.1.609 Ademption by satisfaction (parallel to doctrine of advancement 733. T has 3 daughters: Jane.

so DRR asks. but Dawson not sure. Evidence can be used for interpreting the will but may not add something new to the will REVOCATION 1. would T have revoked will #2 if he would have realized that will #1 was not valid/revived? If yes. then the revocation of .505) c. People who have executed wills are entitled to get rid of them—wills are donative docs. 732. and the revocation of the old will was so related to the making of the new as to be dependent on it.507 Operation of law (Effect of subsequent marriage. 732. mistake: wrong name used. 732.505 Revocation by Writing: Subsequent Instrument (including codicils) 3.302) ii.1105) b. should be given effect. and it must also be clear what the will would have said but for the mistake. or if made is invalid. Ex: T has will #1 and will # 2. b. Any provision of the will executed by a married person that affects the spouse of the person shall become void upon divorce/dissolution (comparable provision in trust code 732.301/732.508(1) strict no revival of old will if newer will is revoked b. then T dies intestate. Id we have a codicil with an express revocation clause. Will #1 is not in force. 506 Revocation by Physical Act: can't partially revoke by physical act (but can with codicil 732. 4. 732. DRR: Dependant Relevant Revocation or Didn’t Really Revoke a. Three types of revocation a. then the old will.nothing shall be left for Mary. Revokes will # 2 thinking that will # 1 has been revived/is in force.508 Revival by revocation: If I have revoked a first will by a second will and I revoke the 2nd will. Evidence in the form of declarations of intent are not allowed c. 732. c. adoption or dissolution of marriage) i. 732. what happens? It would probably be interpreted as a will. though cancelled. like donative promises. then if the new will be not made. misdescription: the mistake must appear on the face of the will. courts more willing to admit extrinsic evidence iii. is the 1st will operation again? (no) a. ii. If no. If it is clear that the cancellation and the making of the new will were parts of one scheme. Two things exactly measuring up to terms of will OR no person exactly matching 1.508(2) revocation of codicil does not revoke will and provisions that codicil amended/revoked are revived. they can be revoked. Will becomes operation at testator’s death. Ct interprets Jane and Jane to mean Jane and June. it is obvious that there is an ambiguity. birth. latent: not in will but when you look outside will. 2. None of these things revoke the will but the child/spouse shall inherit under pretermission (732.

it was to be distributed. divide into 7ths for each child/issue. will #2 not revoked. it will be a breach of contract and devisees that don’t take under wife’s will have a contract claim as creditors under first will. the memory enfeebled. L remarried. LIMITS ON THE POWER TO REVOKE Joint Wills and Will Contracts 1.501 “A person who is of sound mind” b. The testator must understand the nature of the business in which he is engaged and ii. BUT 732. Huff: L and C got married and executed a joint will which stated that the will could not be altered by either party except by the party’s consent. CONTESTING THE WILL/MENTAL STATE ISSUES 1. There is an implicit assumption that the survivor will use as little as possible to give $ to children. Garrett v. you don’t give the spouse any leeway. the understanding weak. The mind may be debilitated. Wife may revoke the will. then when the other dies. Whether the 2nd spouse had notice of the contract when they married b. b. Since will #1 invalid. Reed: couple comes to lawyer to make a will—agreement is that they will leave a clock to the daughter and all the rest to the surviving spouse. second wife claimed elective share and court held for 2nd wife over devisees but took into consideration: a. C died. Hub dies W inherits. Shimp v.will #2 was conditioned upon the validity of will #1. If one spouse predeceases. How he wishes to dispose of the property iv. but if she does. Lesson: when you enter into a contract with a (now) deceased spouse. the character may be peculiar and eccentric. a. RULE: A contract that purports to prevent revocation of a will does not work. When making a will has a recollection of the property of which he means to dispose and iii. Sound Mind/Capacity Doctrine/Testamentary Capacity a. Public policy concerning the marriage relationship and the rights of the surviving spouse. Whether the 2nd spouse would be deprived of the entirety of the estate by enforcement of the contract d. . Lack of capacity voids the entire will c. Wills law allows revocation. she comes back to the same lawyer and says she wants to change the will. Elements: i. After L died. Length of the marriage c. 3.701: this will would not have been held to be a contract in Florida because there is no presumption of contract in joint wills and must be signed in front of two witnesses (but witnesses need not be in presence of each other) 2. Property was to go to surviving spouse and then after survivor died. 732.

and he may want capacity to transact many of the business affairs of life d. Before a lay witness will be permitted to give his opinion that the testator is of unsound mind. Fraud in the inducement i. 4. Insane delusion a. Entire will or part may be void b. There is a confidential relationship between the testator and the beneficiary 1. The question in insane delusion is whether there is ANY rational basis. 3. Insane delusion may go to a portion of the will and not the entire will c. he must first detail the facts upon which he bases his opinion. Fraudulent statements or conduct relates to statements made around the will ii. which have no real existence except in his perverted imagination and against all evidence and probability. Unnatural result c. Independent advice of counsel will correct for the effects of undue influence. Fraud: Testator acted on fraudulent information—cts concerned with person who perpetrated the fraud. d. Presence of suspicious circumstances which will shift the burden of proof to the proponent iii. Delusion is insanity where one persistently believes supposed facts. upon the assumption of their existence. T changes will in response b. 2. however logically. he is not required to detail all the facts on which he bases his opinion. Undue Influence (wrongdoing doctrine): focus on person doing the wrong—just as concerned with punishing the wrongdoer as getting to testator’s intent a. If gift is product of insane delusion. for the belief. then gift is not admissible to probate b. Elements: i. Elements: . T is misled as to the nature of the instrument he is signing (child tells parent it is a power of atty when it is really a will) ii. however slight. and conducts himself. Where the atty represents both the testator and the beneficiary overcome by clear and convincing evidence iv. Overcome presumption of undue influence by a preponderance of the evidence 1. Introducing evidence of unsound mind i. but if he expresses an opinion that the person is of sound mind. Fraud in the execution i. Trust is reposed by reason of testator’s weakness or parties had relationship in which the reliance was natural ii. a. Where the atty draws the will and is the beneficiary = overcome by substantial trustworthy evidence 2.

5. Made with the intent of effecting a will 4. presumption of undue influence a. Have to have a trustee (3rd party or owner of property. Inter Vivos trust: transfer of property to another person as trustee during the settlor’s lifetime b. Merger: if legal and equitable title is merged. T is deceived 5. 732. 736. 1. Remedies: constructive trust c. What happens when a trustee refuses/can no longer serve “A trust will not fail for want of a trustee” ct has inherent power to appoint trustee.0402 Requirements for Creation a. burden on proponent to establish prima facie validity (usually by selfproving affidavit). 736. unless the trustee must perform duties of a personal nature (give $ in trust to who you see fit) 2. duress. but the remainder of the will not so procured shall be valid if it is not invalid for other reasons.107 Burden of proof in contests. CREATION OF TRUSTS Trust law was historically CL until 2006 when ET Code went into effect. Person making the statement knows it is false 3. the burden shifts to contestant to establish grounds on which the probate of the will is opposed or revocation is sought b.0106: CL of trusts is still in effect as long as not modified by this Code 2. Testamentary Trust: transfer property by will or other disposition taking effect on settlor’s death c. or undue influence. Person accused of fraud benefits iii. 732. 736.1. Inter vivos self-declared trust: Declaration by the owner of property that the owner holds identifiable property as trustee d. A will is void if the execution is procured by fraud.0401: Methods of Creating Trusts a. there is no longer a trust ii. Statement made is false 2. Series of requirements: i. usually institutional) usually this is not an issue 1. mistake. 733. A provision in the will purporting to penalize any interested person for contesting the will or instituting other proceedings to the estate is unenforceable. Have to have beneficiaries 1. the presumption of undue influence shifts the burden to the proponent to prove no undue influence. Definite beneficiaries: definite and identifiable before rule of perpetuities .517 Penalty Clause for Contest (no contest clauses) i.5165 Effect of fraud. Exercise a power of appointment in favor of a trustee 3. duress. BUT. mistake and undue influence a. Any part is void if so procured. 6.

Secret trusts: arise when a devise that appears on its face to be outright to one person is made subject to a separate. v. If testamentary trust. then capacity=capacity to make a will 2. problem with inter vivos trusts: ex: I create a trust the corpus of which is the $ I will receive from my mom’s estate” No trust bc no property—have to get legal title to trustee. usually oral agreement that the recipient will hold the property for the benefit of another a. Precatory language: a. 2.iii. a. If language does bind. If language does not binds.808: Death benefits. not a property interest. but the beneficiaries of the trust/other terms are not stated. the transferee gets the property outright b. No trust is created by precatory language directed to a legatee unless there is a testamentary intent to impose a legal obligation upon him to make a particular disposition of property . Settlor must express an intent to impose an enforceable duty on the trustee—precatory language in these contexts leaves doubt as to intent Problems 1. 736. 733. 736. 736. disposition of proceeds: can set up a full-blown trust that will be funded when you die by life insurance policy (right to receive life insurance proceeds is an expectancy. then trust created.0601 Capacity of settlor of revocable trust= a. so this is weird) 2. c. Have to have capacity to create a trust 1. vi. Semi-secret trust: it is clear from the devise that the taker it to receive it in trust. Irrevocable: not viewed as a will substitute— present and irrevocable (like gift—does the settlor have capacity to make a gift?) Have to have intent 1.0408 trust for care of animal 3. Precatory language is prima facie construed to create a trust when they are directed to the executir d. Semi-secret trust/gift fails 3. Are ENFORCED by way of a constructive trust for the intended beneficiary 2. Revocable: essentially treated like a will bc it’s a will substitute b.0409 noncharitable trust without ascertainable beneficiary have to have property 1. iv.

Inter vivos Trusts a. instead of creating testamentary trust. Hard to combine inter vivos and testamentary b. has been amended/revoked in part iii. “pour over trust” 1. b. 732. These people could have created a testamentary trust. More expensive to have testamentary trust d. When settlor transfers the property in trust to someone else as trustee.0403 Formalities for revocable trusts e. If pour over effective. Revocable 2. so information became public iii. If inter vivos trust was revocable.075: inter vivos trusts.REVOCABLE TRUSTS 1. Pour over trusts a. Terms of the trust were in the will. get the property into a trust that is already created. Revocable inter vivos trust ii. d. all declaration and creations of trust must be manifested and proved by some writing. . 736. Testamentary trust still subject to probate c. trust was not testamentary bc set up as inter vivos—at death irrevocable iv. But there were problems: 1. but then cound’t be amended b. but there were downsides: a. in trust for the named beneficiarys. but doubtful if not funded before death.05 how declarations of trust proved: revocable trust prior to dissolution of marriage 2. it was also amendable— so what does this do to will? Invalid testamentary transfer? a. i. Combine assets from estate and trust 3. powers retained by settlor i. So. Trust could be incorporated by reference. as trustee. Combine trust assets and estate assets 1. Trust could have independent legal significance. because the only res of the trust is a possible expectancy of receiving life insurance… c. signed by the party authorized by law to declare such a trust. 689. the settlor must deliver the property to the named trustee. Legal history: 2 objectives for people who started trying to do this: i.513 : Devises to trustee: devise won’t be invalid because i. trust is amendable or revocable ii. or by transferring the property to someone else as the trustee for the benefit of the named beneficiaries. A settlor may create an inter vivos trust by declaring that she holds the trust property. 689.

Young couple with minor child concerned about $ for child if both die-0create an inter vivos trust that is not funded except with proceeds from life insurance policy 1. what are the beneficiary’s rights? iii. a devise under a inter vivos trustis valid as long as trust in existence at time will was created and 1. which is cheaper to create. Imposes mandatory duty on the trustee to ascertain what the beneficiary needs for support and supply that support—typical standard is reasonableness—did the trustee act reasonably in dispersing the funds iv. Bad faith or with reckless indifference is standard applied to trustee who is accused of not giving enough support to beneficiary b. The real beauty of trusts is their flexibility a. If settlor uses standards. 736. strong presumption that trust is revocable (must expressly provide otherwise) 4. 736. powers of withdrawal 5. It won’t be invalid just bc it is amendable/revocable 2. maintenance) ii.513: statutorily. also worried about the leftovers that are not in trust ii. 736. Could also use a testamentary trust. When words “necessary for support” are used in a support trust. 736. Standards Trust or Support Trust i. a new doctrine was created 732.0603: Settlor’s powers. vi.0103(3) articulates most of the standards (health. There can also be a hybrid trust—where beneficiary gets income but settlor gives trustee discretion to invade principle for certain reasons. So. but more expensive to maintain bc stays under ct control 3. Revocation a.v. Older rich people who have assets in hand and want to put assets into trust so that money doesn’t go through probate.0604 Limitation on action contesting the validity of revocable trusts DISCRETIONARY AND SUPPORT TRUSTS 1. When words are “support and maintenance” trustee has a duty to inquire about the financial resources of the beneficiary and recognize the need. It won’t be invalid bc only thing trust holds is expectance interest b. the terms are construed to support the beneficiary regardless of the beneficiary’s own assets. education. support. v. Discretionary trust . vii. Who creates pour over trusts? i.0602: Revocation or amendment of revocable trust i.

anticipation or seizure by legal process” ii. but if the trustee has notice that the beneficiary owes money and chooses to give money to the beneficiary. the payment must be made to the creditor unless it is a spendthrift trust.0501 Unless trust subject to spendthrift provisions.0502 i. in trustee’s discretion” ii.i. Settlor imposes no mandatory obligation on the trustee and gives trustee discretion to pay the income for the benefit for one or more described beneficiaries “So much of the income and principle to A as trustee shall determine. T may not act dishonestly. CREDITORS: trustee is not forced to make payment to creditors. Spendthrift Clause/trust 736. c. Settlor may not create a spendthrift trust for his own benefit . Bad faith or improper motive iii.. d. i. Creditors’ Rights 736. arbitrarily. court can award the INCOME from trust to creditor e. Spray trust: the trustee has discretion to pay money to one or more beneficiaries. Clause: the interests of my beneficiary shall not be capable of assignment. iii. Designed to prevent voluntary assignment and garnishment by creditors.e. or refuse to exercise judgment because he wants money for himself 1. once the trustee has notice of the debt and chooses to make a payment on behalf of the beneficiary. then the trustee is held liable.