WILLS AND TRUSTProfessor Guzman

TWR 11-11:50Fall 1999

I. Property: legal relationship between and among persons with respect to a thingRights can include:

1. destruction2. transfer3. use4. exclude5. possess6. enjoy (profit)

II. Course concerns the right to transfer propertyA. Two points when you can transfer property

1. during life2. at death

III. Introductory Stuff

An heir is the person who takes property if you die without a will.

A will is revocable until you die. The title of property transfers at death.

Transfer in life or at death?1. person may use property2. tax consequences3. control your family (no property if your children are bad)

Reasons for not leaving a will1. amount you own not sufficient2. young3. single4. childless5. uneducated6. healthy/immortal outlook on life7. no relatives8. like the way succession statutes are.

Intestacy statutes are drafted by legislatures. There attempt is to make everyone happy.Early on in history, King got everything back after you died. Even Thomas Jefferson said that earth belongs to living and there are no rights at death.

Why did we adopt intestacy statutes?Keeps land movingEasier to let it pass/descend than argue over ownership

Intestate succession and Testate succession are civil rights, not natural rights. No constitutionally protected rights.

However there are “backdoors” to argue in favor of them being a natural right:

Hodel v. Irving: Congress passes allotment act and splits up reservation lands. Gives pieces to members. When they die it passes to heirs. Got to be too much to control. Congress in the Consolidation Act declared some lands would escheat back to the tribe.Members of the tribe argued constitutionality. SC found it was a fifth amendment takings violation. Can’t take lands without compensation. Because there is a private property interest being restricted: right to transfer, must give something. As a result, some theorists argue that transfers at death are a natural right.

There are restrictions: public policy considerations (if it involves state action)debt collectors come knockin’ firstcapacity of testatorcan’t place constitutional limits on wills: marriage/state involvement. For example: can’t give property to city foruse as a white only park.

TERMS

without a will with a will

nature of transfer: intestate testate succession

dead person intestate testator

property of decedent estate estate

RP transfer descends devises

RP recipient heir devisee

PP transfer distribution bequest/legacy (cash)

PP taker distributee/next of kin legatee

probate (overseer) administrator executor

generic terms: decedent (dead person); property taker (beneficiary); probate (personal rep)

IV. INTESTACY

1990 UPC 2-102 Rulespouse only spouse gets it allspouse plus only joint issue spouse gets it allspouse plus any issue of decedent only (surviving spouse’s stepchild)

spouse gets 100k plus ½ balance of estate

spouse plus any issue of surviving spouse only (decedent’s stepchild) and joint issue

spouse gets 150k plus ½ balance of the estate

spouse plus parents spouse gets 200k plus ¾ of any balanceOklahoma title 84 Rulespouse only spouse gets it allspouse plus any issue of surviving spouse only (decedent’s stepchild) and joint issue

equal shares only to spouse and joint issueif no joint issue spouse gets it all

spouse plus only joint issue equal sharesspouse plus any issue of decedent only (surviving spouse’s stepchild)

spouse gets ½ the joint industry and equal shares of non joint industry property

spouse plus parents/siblings 100% of joint industry to spouse and 1/3 remainder of non joint industry to spouse, the rest to parents/siblings

A. joint industry property/coverture: any property acquired during marriageThings not joint industry (even during marrige):

gifts received separatelyintestate transfers to one spouse

In Oklahoma there is a presumption that all property is joint industry and you must show clear segregation

B. The UPC is the Uniform Probate Code, a model created for states to adopt or follow as states want.C. RP passes in accordance to the laws of where it is located. D. PP passes in accordance to the laws of decedent’s domicileE. Rules of Intestate Succession (Refer to Handout #1)

1. You have to be alive to take2. Usually stepchildren/in-laws don’t get property3. Spouses always get something if they survive4. Kids always trump over everyone

F. Issue of decedent can be split into two major categories1. Stock/root: vertical category that denotes lineage2. degree: horizontal category that denotes number of generations

G. What happens when descendants pre-decease decedent?1. classic pure stirpes: count the number of live roots at children generation and divide down.

For example:X

A B12345 6

A and B are dead. A’s five kids will split ½ so they get 1/10 and B would get ½. 2. modern pure stirpes: count the number of live roots at the first

generation with at least one living member, divide down.In the above example, the six kids will split the estate equally.Each will get 1/6.

3. UPC: like the modified, count the number of live roots at the first generation with at least one living member. Allocate a share to anyone alive. Combine and divide equally at next level.

Note: Oklahoma follows the modified approach.H. What happens when you die without a spouse or children. You have left behind ancestors: persons related by blood in an ascending straight line up (parents, grandparents). You have also left behind collateral heirs. Not ancestors but related by blood (cousins/siblings)YOU NEVER MESS WITH THIS AS LONG AS YOU HAVE A SPOUSE OR ISSUE.

I. The three approaches:1. parentelic: distribute the property where someone is alive in first parentella possible. YOU ARE IN THE FIRST ONE. YOUR parentsand brothers sisters/nieces and nephews in the second. Grandparents/aunts uncles and cousins are in the third. (HEAD of parentella takes it all. If you have mother and father living they get it all even if siblings exist)2. civil law approach (degree of kinship): distribute all of estate to those

who are in closest degree to decedent. You count up to common ancestor and over. For example, your brother is 2 degree. One (up to parent) and two over!! Aunts are third and cousin is 4.

3. modified: if a tie in civil, you break it by determining closest parentella. If you have a grandfather and brother alive, your brother gets it all he is in the 2nd parentella and grandpa is in the third.

OKLAHOMA follows the parentelic approach to the third one. IF no onein that start counting degrees.

Flow chart for intestacy:spouse (1990 UPC)----------descendants (1990 UPC)------------ancestors/collateral (parentelic)

spouse (Oklahoma)----------descendants (modern pure stirpes)------parentelic

I. How to change scheme of intestacy?1. write a will2. write a negative will (NO property to wife)must be very clear in drafting negative wills, be sure to include bothreal and personal because sometimes courts will allow some to pass.

J. ADVANCEMENTSany gift (inter vivos transfer) that will be deducted from your share at intestacy. Policy reason! Equality of treatment in families.\

If one is done, it must be in writing.

How its done1. Determine the hotchpot: any qualified advance plus amount in estate2. allocate the hotchpot under relative intestacy scheme.3. subtract any advance from any advancees portion*4. If any advance exceeds an advancees share, disregard advance and advancee and start over again.

Example:H-Wdead

1 2 3estate is worth 500k1: gets 75k advance2: gets 25k advance

1. the hotchpot is 600k2. determine intestacy scheme (OK)so Husband gets ½ (300k) and 1,2,3 get ½. Each get 100k.3. Subtract advance from advancees share: 1: 25k, 2: 75kand 3rd son gets 100k. The total is total of the estate, 500k

Under the 1990 UPC: Husband would get all of it!!

Another Example:H(dead)---WifeA B C \

XHusband is worth 300kA: 100kB: 20k

1. Hotchpot: 420k2. Intestacy scheme

UPC 3. Spouse gets first 150k + ½ the balance

Wife: 235k (take 320k, ignore A’s 100k, subtract 150 and divide by 2A: NOTHING (ADVANCE EXCEEDS)B: 42.5-20k=22.5C: 42.5

UPC1. must be in writing contemporaneously by donorto be qualified. 2. Any heir can be advancee3. Heirs of advancee not charged4. Value of advance is value at time of

taking possession, or at decedents death (objective)

Oklahoma1. writing by donor or donee at any time2. advancee can only be lineal descendent3. heirs of advancee are charged4. expressed value or value when given (subjective)

DISCLAIMERSan heir saying he doesn’t want property (refusal of inheritance)1. altruism2. tax consequences (creditors will come after him)3. benefits of disclaiming better: the property is worthless.4. stay on federal benefits

If you disclaim, you are treated as if you pre-deceased the decedent.Under UPC/OK: disclaim must be in writing only. In OK, must be acknowledged and witnessed.

See notes.

UNIFORM SIMULTANEOUS DEATH ACTwhat happens when two people die together (husband/wife)If no sufficient evidence as to who died first, treat it as thoughhe or she survived the other with respect to their own property.

Courts in determining who died first will examine all sorts of evidence and attorneys will call expert medical witnesses.USDA requires a five day survival period.UPC adopted USDA but must be clear/convincing evidenceOK adopted USDA but only sufficiency of evidence.

STATUS QUESTIONSWho can take as an heir?Even if you are a dead-beat parent, you are allowed to take as an heir to your child’s estate if you acknowledge them and have not altogether abandoned them.

ADOPTIONIf you are adopted, the UPC allows three lines of inheritance: 1. adoptive parent*

2. natural parent*3. other natural

parent* married

In Oklahoma you get all four lines, natural and adoptive parents.

Equitable adoption: must be clearly manifested, need to have everything and

a clear intent to sign an adoption contract.

Adult adoption is allowed to fight will contests. (An old man adopting his 20 year old lover she would get money through intestacy if his natural kids fought his will) OR same-sex couples adopting each other or do it because it is a good protection for your estate.

OLD LAW: children of non-married parents could not inherit from any parent.This was harsh and overtime it was amended.

Trimble v. Gordon: non married parent’s child can only inherit from mother. Court would not allow this on EP grounds. Easier to prove who mother is, but

not right to exclude dad.

Lalli v. Lalli: nonmarital child always through mother, maybe dad if:paternity proven; signed statement; and dad treated kid as his.These things must be done during life of father. Kind of puts a burdenon issue. What happens if father dies when kid not yet born.Supreme Court has found this acceptable. Oklahoma has similarprovision.

SPOUSEmust be legally married, includes common law marriage.Can’t kill your husband/wife (state’s have adopted slayer statutes). Even these may be complicated. What about involuntary manslaughter. Isn’t person punished enough? Some states have constructive trusts, wherethe perpetrator holds legal title but equitable title goes to next of kin. Eventually,legal title passes as well. This just makes legislature feel better about intestacy statutes.

WILLS/TESTATE SUCCESSION

I. Three types of a valid will1. oral (very rare)2. attested will

validly witnessed/no special format required3. unattested will (holographic will)

not witnessed

II. The Will-making processUPC v. Oklahoma (see notes)

To be a valid will:1. Must be in writing

2. Writing must be signed (some states require subscription) by testator or proxy in presence of testator

3. presence requirements of witnesses who should be disinterested

Most jurisdictions require 2 competent witnesses able to:1. recollect2. observe3. be truthful in communicating the execution ceremony4. CAN”T BE INTERESTED

Hypothetical:Guzman gives ¼ to Ann

¼ to Bob¼ to Carl¼ to Dan

there are four witnesses (only need 2)2 witnesses are Ann and Bob, the other 2 are Sam and Matt.Doesn’t matter, the supernumerary rule kicks in. This rulewill strike Ann and Bob’s signature, but because Sam and Mattsigned, it is still okay.Even if an interested party witnesses, the will is not void.Only that witnesses/beneficiaries portion is. Courts will purge that interest.Most purging statutes give the smaller amount. Whatever is in will or what they would take intestacy. UPC doesn’t have purging statutes.Oklahoma still has one.

Must be careful when executing a will. Before it is probated, make sureceremony is valid. Add an attestation clause (the procedure). Copy thestatute for signing a will. Also for extra protection include an affidavit.This will make it self-proved and won’t require witnesses to testify.

Most important goal of wills law? Carry out the testator’s intent at death.

Rules in every jurisdiction differ:1. writing2. signature3. witnessesThe rules help carry out the goal.Written: permanency Signature: completed and testator likes itWitnesses: no fraud/competent

Rules are:Strictly complied with. However there are intermediate rules:Substantial compliance: as long as intent of testator exists. More formal rules can be neglected.THE UPC has included a dispensing power, where the courtscan do away with a rule altogether. The document must be prove to be a will with clear and convincing evidence. No statement by UPC of whichrules are effected. Perhaps all of them could be.

Oklahoma follows substantial compliance. The will must be near perfect. UPC follows dispensing power. Court has power to dispense withrules as long as clear and convincing evidence of testator’s intent is present.

What about a video will? Is it valid? Under strict it wouldn’t and probably under substantial it wouldn’t be because writing is a majorrule. Dispensing power jurisdictions may allow it.

III. HOLORGRAPHIC (UNATTESTED WILLS)

UPC signature and material portion in T’s handwriting. Needs no date.OKLA entirely handwritten, dated and signed by T.

benefits of a holographic will: cheap, saves timeproblems: may be some deathbed influence

Oklahoma requires strict compliance on all holographic wills

Approaches:strictintermediate: material provisions must be written1990 UPC: material portions handwritten

In re Estate of Johnson 1981 : required holographic will to be handwritten, material provisions. Show by T’s writing his intent to transfer property and to whom.Portions handwritten in this will: signature, what is being transferred, and to whom.But court did not find intent. It wasn’t handwritten: “I give, devise etc.” It was a form.Also, court wanted to protect his family in this case. He was giving some of it to a crazy evangelist.

Difference between material provisions and material portions

Material Provisions1. signed in T handwriting2. property being transferred and to whom in T handwriting

3. intent of T in T’s handwriting

Material Portions1. signed in T handwriting2. property being transferred and to whom in T handwriting3. intent of T need not be in T’s handwriting. It is okay if a pre-printed form.

In Kimmel’s Estate, T wrote a letter to sons. Last sentence seems to convey property to them. Instructions at the end of letter tell them to keep it.Court held that T intent is present, “if anything happens, you get…”Signature “Father” is valid. And date is written.A valid holographic will is present

CONDITIONAL WILL: “I’m going on a trip and if I die,” or “I’m having surgery and if I don’t wake up you get…” are these valid if the person comes back/wakes up? Courts generally allow these wills regardless. They will disregard the conditional language. Treat it as just an impetus to write a will. PROBLEMS: may not be in right mental capacity (may be freaked about a pending operation) Also if you do survive trip/surgery rip up the old and write a new one.

IV. CHALLENGES

Don’t challenge a will until will is VALID FIRST1. Death of T2. custodian of will takes will to appropriate probate court or to executor named

in will.3. will is offered for probate by executor or interested party (proponent). Court

looks at it “facially” to see if all requirements are met. 4. if accepted…notice to all beneficiaries and interested parties (heirs)5. Probate process begins:

inventory, distribute

Any challenge brought after acceptance by court:1. lack of formalities (rare because court accepted already)2. lack of T capacity3. undue influence/coercion4. fraud

Challenges based on lack of formalities:difficulty because:

witnesses have already sworncourt accepted it alreadyexpensive to try and prove it and family will work it out personally

Challenges based on capacity:

T must be over 18.Must have capacity (sound mind and memory)

1. ability to know nature and extent of property2. the natural objects of your bounty (your heirs)3. know transfer is being made4. appreciate all these elements in order

to form an orderly disposition of property (EQUALITY)

proving capacity:symptomatic: T acting weirdorganic: expert testifies that T has a mental diseasemoral: looking to see who gets property and makingsure nothing weird about it.

In re Strittmater: court would not allow will in probate because T leftproperty to National Woman’s Movement after evidence that she hates men and animals surfaced. Lacked capacity.

An Insane Delusion: a false conception of certain aspects of reality spouse infidelitydenying your childrenplots to kill yousupernatural beliefs

Insane Delusion:with the finding of one circumstance, T’s will shouldn’t be valid.1. Belief with no foundation in fact plus2. Belief must be product of a diseased mind3. But for that belief, the disposition in will wouldn’t have been made

If an insane delusion is found, strike transfer or if it is pervasive entirewill is void.

In re Honigman:at some point in his life T decided his wife was cheating on him.He wrote a will giving his wife a life estate and ½ of RP. If will void she’d get ½ of everything (intestacy scheme)Wife claimed that husband’s ideas are the product of aninsane delusion. Court agreed. T lacked capacity to writebecause of an insane delusion. Did his belief have any foundation?

Some evidence exists…phone calls, lettersProduct of a diseased mind?

NO evidenceBut for this belief, would he have written the will in this way?

Yes. His wife had her own money, made it clear

he wanted his sister and brother to get some money.

How do you know if “product of a diseased mind?” If you can’t talk T out of his belief and T still adheres to beliefit is the product of a diseased mind.

Undue Influencesomeone has influenced/coerced the T.attack capacity and argue undue influenceDifficult to prove:1. T is dead. Can’t ask him if he was influenced2. The party who influenced isn’t going to admit it.3. No clear evidence on the face of document

Most jurisdictions adopt a presumption of undue influence:If 2 factors are proven.This will shift the burden to the proponent of the will to disprove undue influence (person who wants to keep will).

In Oklahoma the 2 factors are:1. establish a confidential relationship between alleged undue influencerand testator2. establish stronger party assisted in the preparation of the instrumentOTHER JURISDICTIONS HAVE BROADER RULES1. confidential relationship exists PLUS2. suspicious circumstances surrounding preparation

-person who drafted will gets property-an heir driving T to execution ceremony or influencing Tto write a will

Once undue influence is proven (2 factors) the burden shifts to “influencer” to rebut the presumption

Guzman leaves ½ to lawyer and ½ to husband.Husband challenges and proves the factors.Up to lawyer to disprove them.

If a will fails property will pass either intestacy or through a priorvalid will.

Fraud2 types:

1. fraud in execution (factum)2. fraud in the inducement (motivation)

fraud in execution:misrepresent the document (what it is)“Sign this, it is just a permission slip.” It really is a will.Erasing a note, turning it into a will.

fraud in the inducementmisrepresent to infuence T’s behavior“Your son is dead.” Person trying to get son’s share.

If fraud is found, courts will deny probate to entire willor will deny certain portions (the affected clause) if thishappens this property goes to residuary clause.

V. REVOCATION OF A WILLA will takes effect at deathuntil then beneficiaries have no interest.A testator can revoke a will however many times he wants.

Requirements to revoke a will:There must be an ACT plus INTENT(the act must be correct according to state statute)

1. revocation by a later will (subsequent instrument)Always put in a revocation clause in new will(intent) the actual writing of a new will (the act)

2 revocation by a physical act: tear it, burn it, mark it outare the ACTS. The INTENT is inferred by the act itself

for a requisite act must look at statute to determine what physicalacts validly revoke wills.

Okla. 84 § 101: (1) revoke by subsequent writing or (2) by burning, tearing, canceling (writing VOID across writing or lines through it), destroy, obliterate (mark it outcompletely). This must be done by T himself or in his presence with direction

3. Operation of lawwhen law would deem it to be revoked:

husband and wife after divorce.

REVOCATION BY SUBSEQUENT WILL: ANALYSIS

1989 1999 PROBATE invalid invalid goes intestacyinvalid valid 1999valid invalid 1989valid valid pass according to intent (see below)

1989 1999House to A I revoke all prior willsBoat to B House to Cvalid Boat to D

T’s intent is to revokethe 1989 will. The clause shows intentalso look at the changes, totally new

Always draft a revocation clause up-front to notify court the newest will is thevalid will.

1989 1999House to A House to CBoat to B Boat to Dvalid valid

1999 wins. The newerwill should prevail. Conveyances are different.Always date the will to help prove latest intent

1989 1999House to A Car to CBoat to B Cash to Dvalid valid

Probate both!!!No inconsistencies.

1989 1999House to A Car to CBoat to B Cash to Dvalid (residuary clause): Rest to X

validX will argue rest is the house and boatX could be right if T intended this. A and B willargue rest is stocks, other real property. if 1999 supplements: codicilif 1999 replaces: revocation

How do you determine this? The presumption is that a later will disposes T’s entire estate because of residuary clause. The early will is revoked.

If a court finds residuary clause it is revoked (unless valid rebuttal) if courtcan’t find a residuary clause then the new will is supplementing

1989 199920k to B 10k to Brest to A ring to C

valid car to Dvalid

1992 supplements! No residuary clausesome courts: B gets 30ksome courts: B gets 10k, A gets rest

IF you revoke a will all supplements and codicils are revoked

Revocation = Intent plus an act

subsequent will: if later will disposes of entire estate, the presumption is that the first will is revoked. If not, it is a codicil (supplement)

REVOCATION BY A PHYSICAL ACT

Harrison v. Bird:Whether T’s will is revoked by a physical act. It was ripped up.But it must be a requisite physical act (must be legal)In this case, the attorney ripped it up not in the presence of the T.Even though T had intent (told attorney to) there was no requisiteact. To revoke a will there must be strict compliance.

But court held because no one could find the will a presumptionexists after death of T that she destroyed the will (4 pieces of will neverfound). Therefore she died intestate.

If any duplicates existed, if one is revoked all duplicates are revoked.

The best thing for attorney to do is keep original and give a copyof the will to the T. That way, no problems like in the above case.

If the four pieces are found in a drawer: T died testate (never a validrevocation, had to be done in T’s presence)If can’t piece the will back together, use a copy.If no copy it will go intestate if you can’t prove contents with clear andconvincing evidence.

Thompson v. Royall9/1/32: valid will 9/15/32: valid codicil written (at this point still testate)9/19/32: wants to revoke the will. Calls attorney.Attorney wrote on back of will that “this will is void”Wrote this on codicil too. Not in T’s handwriting.So not a later will (you can always leave a holographic

will that says you want your property to go intestatcy)Writing didn’t touch the words of the will…not a revocationby a physical act.Intent is present “I want to revoke” languageThe requisite act is not present.T died testate.

Most courts require that writing must touch the words of the will.If writing VOID do so on the words of it. Not on the edges.Revocation by a physical act must be strictly complied with.

Copies have no legal effect. If you rip up a copy it doesn’t mean will revoked.It must be an original one.

CAN YOU PARTIALLY REVOKE BY A PHYSICAL ACT

House to A and BBoat to CCar to BCash to Dvalid willStrike out B’s part of houseNow A gets whole thing. Usually a codicil is required to make a change

If you have a residuary clause and you strike out certain dispositions the person named in the clause gets it. To prevent people from striking out devisees

1. Some courts don’t permit this at all. If you see a crossed out portion of a will, read the will as it is written. Problem is what happens if you can’t read it?

Look for proof. If you can’t read it, no copies exist, then the property goes intestacy.2. If jurisdictions allows partial revocation of a will, it must be one that has incidental consequence:

marked out provision is non dispositive causes property to go intestacyproperty will drop to residuary

DEPENDENT RELATIVE REVOCATIONThe law implies that revocation is conditional upon something else. If you don’tknow the true facts this doctrine will prevent revocation.Applying: must know intestacy provisons and if will is valid. DRR is 2nd best. 1. was there a revocation based on mistake of fact or law

if yes2. what would the testator prefer? Lift mistake in revocation or allow property

to pass intestate

Examples:

T has two kids A and B 1990: everything to A. valid1999: everything to B: invalid

At death in 2000, property goes to A. Doesn’t matter if 1999 has a revocation clause because later will invalid.

What if: 1990 is ripped up and validand 1999 is invalid (one witness signed it instead of 2)Property would go intestacy (without DRR)Apply it:1. was there a revocation based on a mistake of? Yes thought 1999 will valid2. Which would T prefer?Lift mistake making 1990 valid again? Giving everything to AOr let it pass through intestacy? ½ to A, ½ to B?Probably intestacy. T wanted everything to go to B, butthis way A will still only get ½. Better than lifting and A getting it all

I leave $10k to F. valid willlater found with a line drawn through it.Does jurisdiction permit partial revocation?If yes, what would T prefer?Lift: F gets it all.Intestacy: if F not an heir he gets nothing

Leave $10k to F. validCross out 10k and write in 30k.Did T make a change based on a mistake?Yes, he thought he could change the will.Lift the mistake: F gets 10kIntestacy: F gets nothingT wanted his buddy to have 30k, but not a valid changeThe second best thing is 10k.

1990: All to A. valid T has two kids: A and B1999: All to B. valid

B gets it all. A presumption that 1990 will is revoked: inconsistent.What if T rips up 1999 will and the next year T died? T died intestate.

But T believed by ripping up 1999 that 1990 would be revived. USE DRR. What would T want? Lift mistake, all to B?or let it go intestacy? ½ to A and B. Probably intestacy.

REVIVAL

will #1: All to X will #2: All to Yvalid valid

#1 is revoked because of subsequent instrumentIf T dies, Y gets property

Later on, T rips up #2 will: physical act (revoked a revoking instrument)1. let it go intestacy2. T also could’ve thought that she was reviving #1 by ripping up #2You need clear intent of this.

If you find the intent of revival, it still must be legal in jurisdictionIf it is not legal, apply DRR. You can use it because T had a mistaken beliefrevival works!

Will #1 Will #225k to A 30k to A50k to B 45k to Bring to C ring to Frest to D rest to Dvalid valid

because #2 disposes of everything all priors are revokedAfter revocation of #2 will, will #1 be revived?Without more it would be difficult to prove.Need intent. Courts presume against revival.If second one had no residuary clause, presume a revivalof #1 will. T executed an incomplete #2 will. Onlypartially killed #1. Rip up #2, #1 lives.

REVOCATION BY OPERATION OF LAWDivorce: if you are divorced, spouse will no longer be a beneficiaryH leaves all to wife. If she dies before me, to wife’s son.Oklahoma: if after will, all provisions favor wife, she’ll be wiped out. Soncould still take.

VI. COMPONENTS OF A WILLIntegration: any page present at execution and intended to be part of the will.Three ways a document or act not present at execution can still be given testamentary power:

1. incorporation by reference2. UPC 2-5133. acts with independent significance

Clark v. Greenhalge:Can a memorandum be incorporated into a will?Helen Nesmeth left a will. Also a memorandum and notebook with her wishes.In will, Article V refers to the memorandum.

In the notebook, she refers to a valuable painting that she wants to go to Clark. Greenhalge the executor won’t probate it. 1. it must exist at the time of will execution2. intent to incorporate3. a description of document (notebook) in the will

will was written in 1977notebook dates from 1979but Nesmeth wrote codicils dated 1980. This republishes will!intent found: she talked about giving painting to ClarkArticle V language about memorandum includes the notebook.

1995: All RP to A All PP to people I list in a papervalid will

paper: written 1996. Lists personal property and people who will get it.Can’t do it because memo and will must be incorporated: must exist at timeof will execution. Therefore, personal property goes intestacy

Maybe able to call paper a holographic will: still needs date/signature/reflect T intent…hard to get if just a list.

CREATE a valid codicil after 1996. This will republish the will. Gets paperin probate.

UPC 2-513rules on separate writings. TANGIBLE PERSONAL PROPERTYNeeds to be signedDoesn’t need to be in existence at time of will executionNeed to refer to list in the willThis means you can do a “shell” will. Leave RP in it and thenlist out PP on a separate paper. Make sure you sign it.Cash isn’t tangible for these purposes

ACTS OF INDEPENDENT SIGNIFICANCEThe car I own at my death to my business partner.Car and partner can change. What T does during his life may affect the will.Law allows this. Only if acts are independent of the will.It can’t be a testamentary act: I leave everything in a white envelope to X.If T goes and gets money out of the envelope, he is affecting the will.

Review of three exceptions to documents not having to be present at the time of execution:1. incorporation by reference

a. in existence at time of executionb. intent of testator provenc. reasonable identification of property

2. UPC 2-513a. tangible property (no limitation for incorporation by reference)b. signed by Tc. describe items in willd. doesn’t matter when document in existence

3. Acts having independent signifcancea. if changing T affect, can’t do itb. As long as T would do it regardless of the change in will it is okay

VII. CONTRACTSContract to make a willContract not to revoke a will

A’s will B’s willAll to B All to AIf A dies, B can then do whatever he wants but if A writes a will:All to B, if B survives, if not to A jr and B jr equally.If B survives, can he write A jr out of will? A jr is a third party beneficiary. He would argue breach of contract. NEVER EVER write joint wills. They are litigation breeders.

Shimp v. Huff:The Shimps leave a joint will.Agree that the survivor gets it allThe survivor gives entire estate to named beneficiaries.

Wife died first. Husband got it all. Lester wanted to change will. He gotremarried. Court said you can revoke a will (any one is free to revoke a will) butnamed beneficiaries may sue: breach of Kx.

Shimp basically had a life estate after wife died. Couldn’t do anything!!Lester dies with this joint will. His second wife wants an elective share. Court will give it to her. It is a statutory right.1. elective shares2. creditors3. legatees (if no breach of Kx. If there is one, legatees considered creditors)

Ambiguities in a will:extrinsic evidence may be brought in.Judges don’t like to bring it in (fraud)Instead: from the four corners of the will try and figureout the problems. If you can’t figure it out, the provision must fall.

Mistakes on will:“All to Jane. I would have given some to Jim, but he is dead.”Jim isn’t dead!1. Mistake on face of will.2. Proof of what T would have done, then extrinsic evidence can be introduced.

Courts also strike words on will. Don’t like to add them. (Modern trend is to add)All my property to my daughters: A and B, b/c they are still alive. T has a third daughter, C who is alive. Court will strike out everything but “my daughters”

I hearby revoke 5k gift to Jane, she is dead (she’s actually alive)mistake of fact: apply DRR.Lift or intestacy?T would want to lift and give her the money.

VIII. STALE WILLSThe older the will, the more problems will occurCould involve property or the people (beneficiaries)Must be alive to take property!

Good practice to tell client’s to make changes if anything changes.Property or beneficiaries change

RULES OF WHAT HAPPENS WHEN A PROVISION FAILS DUE TO BENEFICIARY DYING BEFORE TESTATOR (CHANGES IN PERSONS)1. Any gift in body of will that fails b/c beneficiary dies before T will drop to residuary clause.2. Total lapse in residuary clause: gifts will drop to intestacy3. Partial failure in residuary clause, courts are split.Majority: lapse gift goes to other taker in residuary clauseMinority: Any lapse in residuary clause means gift drops to intestacy4. Class gift named. One member dies: her share goes to other members.If class in residuary the other members will split it.

Always draft substitute takers: IF A dies to B…

ANTILAPSE STATUESEven if you have a lapse (beneficiary dies) Apply state’s antilapse statute to save devise.The Rules:1. was predeceasing beneficiary in the right degree of kinship

UPC: grandparent/descendent of a grandparent or stepchild of TOKLA: a child or any other relative excluding spouse of T

2. if so: Did predeceasing beneficiary leave surviving descendents?3. if so: they take lapsed gift unless will expresses contrary intention

T wrote a will: T (T died last)10k to A / \10k to B A B-C (a and b dead)Car to Carl / / \Rest to D 1 1 2 (dead)

apply antilapse:1. requisite degree2. leave decedents1 can take from A, unless contrary intention, the 10k

B left no decendents. Can C take? No. not right degree.10k would go to D (residuary clause)

if C died before T, the car would go to D (residuary)if D died before T then total failure in residuary and everything would go to 1 (intestacy) the heir of T.

Contrary intent: everything to Jones, if Jones survives me. J has two kids: 1, 2Jones died before T.would 1 and 2 get it?Yes, no contrary intention.

UPC requires a specific contrary intention.The majority of jurisdictions have held: “if he survives me language”is enough to preclude antilapse. It’ll go intestacy. Maybe property may go to same persons!

Class Gifts: a collective noun. If one member dies, the others get the decedent’s share.

IX. CHANGES IN PROPERTY1. ademption by extinction: property no longer there2. accessions and accretions: property increases. Leave a cow to X.Cow has calves. Stock splits.3. abatement: not enough property to pay off beneficiaries. Debt4. ademption by satisfaction: property gone because T gave it to beneficiaryalready.

Property passing under a will is one of three types:specific bequest/devise: gift of a particular identifiable property.the Monet painting; property at 222 East 2nd.“any, all or my” before property could make it specific

general bequest: gift that is usually money payable out of general estate.demonstrative bequest: gift of general property from a specific source. If it can’t be from specific source, it can possibly be paid from general estate.residuary: the leftovers

1. ADEMPTION BY EXTINCTION1989: my stamp collection to X2001: T dies with no stamps.What do you do?

Classify bequest (is it specific)Yes: it is adeemed/extinct/gone. Beneficiary is out of luck.This is the identity theory.

Intent theory: Did T act with respect to this property? If he did intendto sell it off, it is gone. If no intent, it may be saved. No intent can be found by house burning down, insane conservator etc.

To avoid ademption: Courts will reclassify bequest. Classify as a change in formand not substance.

One piece of property substitutes for another.AOL stock to X. Later, AOL merges with Ebay. X still gets it.

Time of death construction. 1990 leave a car to X. In 1999, buy a new car. Does X get the new car? Under time of death construction yes. Under identity theory, X gets nothing.

FOR ADEMPTION, the better bequest is general. If it is specific, beneficiary may be in trouble.

2. ACCESSIONS AND ACCRETIONS1990 will: 100 shares of Cisco to Joe. It is trading at $10/share. Value is $1k.After writing the will, the stock splits. $200 shares at $5/share. Value is $1k.Courts will allow beneficiary to take. If it increases substantially, the traditional rule is if it is a specific bequest then the beneficiary gets the accessions and accretions. If bequest is general, beneficiary doesn’t get the accretions.

100 shares of IBM to Jones. (general bequest) He is limited to this amount. My 100 shares of IBM to Jones. (specific) Stock splits and increases will all begiven to him.

Specific bequest: not good for ademption but great for accessions and accretions.

Ademption and accessions together: If IBM merges with Apple. Under identity approach, IBM shares are gone. If T gave general bequest of IBM shares (100)

and merger occurs, beneficiary gets something but no accretions. Good and bad results.In this case it is better to go with general. At least B gets something.

Courts will do manipulating. Find one bequest to be general for one purpose and specific for another. A new rule should be that beneficiary always get accretions.

Stock dividends: goes to residuary. UPC: any reinvestment goes to beneficiary.

3. ABATEMENTwhen T dies, he has a lot of debt. Who gets paid first? By the time all bills are paid, there may not be much left. Property must be abated to pay off debts.If you have a will: Abatement in this order:

intestate propertyresiduary general bequestspecific bequest goes last. Strongest intent. T wouldn’t want this property to leave family/friends. Heirlooms shouldn’t be used to pay the taxman.

SPECIFIC BEQUEST GOOD FOR ABATEMENT

Desk to A Tiffany lamp to A10k to B 5k to B5k to C 5k to CRest to D

both wills can be probated. Second will supplements only.The will leaves: a desk, a lamp and 25k

T only has 15k in estate.

A gets nothingB: gets 10kC: gets 5kThis is wrong!!!

B would get 9k C would get 6k

15/25 = 3/5 x 15=910/25=2/5 x 15=6

4. ADEMPTION by SATISFACTIONgive beneficiary his money while T is alive. Must have a writing. Otherwisenot satisfied. If you give specific bequest during life it is adeemed by extinction.A general bequest is adeemed by satisfaction.

X. WILL SUBSTITUTES

Life------------------------------will substitute--------------------------------------------------deathgift will1. donative intent 1. T intent2. delivery 2. formalities3. acceptance title passes valid lifetime transaction, the at deathdonee gets title. Irrevocable.

There are positive and negative aspects about each type of transfer.Lifetime transfers can be private, you can avoid taxes, gets property out of estate, cheap.Wills: you can hold on to property, have to worry about probate problems: expense, time, publicity.

Will substitutes are middle ground. It attempts to get benefits of transfers at death without the burden: probate. This is why they are called NON PROBATE TRANSFERS.

A will substitute enables the owner to control property and use it. Owner can change its mind about who gets it, but property doesn’t have to go probate.

TYPES1. life insurance: pay premiums. Beneficiary gets amount at death. It is paid outside of

proabte. You can change beneficiary designation and even revoke policy if you want.2. revocable trusts3. payable on death contracts4. pension plans5. joint tenancies (w/ROS)

There are still formalities that must be complied with in order to have a valid will substitute. Therefore just as safeguarded as wills are. To be a valid will substitute some type of lifetime transfer took place, even it most of it takes place at death.

Wihoit v. Peoples Life InsuranceInsurance company is acting like a bank. Paying Wilhoit interest only. She doesn’t have an insurance contract with the company.Her beneficiary in this arrangement was Owens. But not a valid Kx.

Her will named Robert Wilhoit beneficiary to the proceeds that People held for her. Court agreed that he should get it. Court won’t allow a POD contract on anything other than a valid Insurance contract. Ultimately her intent was carried out.

Cook v. Equitable Life:

Can you revoke a beneficiary of life insurance simply by writing a will and not change it according to policy instructions? NO. Must change policy, can’t just write a will. You’ve got to comply with insurance policy. Written notice to company. There are always exceptions: beyond the power of person to change, died before took affect, other equitable measures. NONE FOUNDED HERE. He should have known.

Will substitutes are valid because formalities are just as valid to protect against fraud and undue influence. Because some transfer at life, you don’t have to comply with wills statute, just the formalities of the substitute

Life insurance contracts are the most common type of substitute. Can you chagne a beneficiary named through a will? Usually not. You have to abide by policy guidelines. Protects the insurance company. (It shouldn’t have to pay twice) If issue is raised, the company will deposit proceed with court (interpleader) and litigants will fight it out and deplete the money

Hillowitzpartnership agreement: when one dies can the interest be paid to his widow (POD contract)this isn’t a will: no formalitiesCourt allowed interest to go to widowLike an insurance contract or third party beneficiary contractStill some states require that it meets requirements of wills (minority)

MULTIPLE PARY BANK ACCOUNTSjoint account: checkingIf more than one name on check both privileged to withdraw and use funds. The survivor gets the contents immediately

Banks allow you to set up other types of accounts:convenience/agency accounts: one person can write checks for another who is incapacitated and can’t write them (pay his bills, expenses)These funds pass intestacy/will

Intent: if only one person writing checks (the other party’s name not on checks but on account) that other person could still get money

JTWROS: another valid will substitute

REVOCABLE DEEDS OF LANDwill: Blackacre to Joedeed: BA to Joe, but I reserve a life estate in BA

in the deed, Joe has a vested remainder and grantor has present interestin the will, Joe has no interest

in the deed, Joe can sue for wastein the will, Joe doesn’t own interest yet (can’t sue)

REVOCABLE TRUSTthe most important type of will substitute

TERMSperson who sets up the trust: trustor, settlor, donor, creatorperson who holds legal title: trusteeperson who holds equitable title: beneficiarysubject matter of trust: corpus, res, bodytrust document: paper that trust is written onin the document, state that trust is revocable. In Oklahoma all trusts are revocable unless otherwise stated. In other states they are irrevocable unless stated a trust is a splitting of legal and equitable title

Legal title means you can invest/manage/sign contracts concerning the corpusequitable title means you have the benefits of using and enjoying corpus

living trust: one set up during trustor’s lifetestamentary trust: one set up in will

pour over: a living trust in life is set up and in a person’s will, the residuary clause or other funds will be placed in the trust

when a trust is revocable it means the trustor can revoke designations, change beneficiaries and do whatever he wants

self declared trust: trustor is trustee

charitable trust: beneficiaries are non profits organizationsprivate trust: people are beneficiaries

express trust: trustor creates trustconstructive trust: court created (operation of law created it)

spendthrift trust: beneficiary can’t transfer any property he receives from trsutsupport trust: trustee uses res for support of beneficiary (food, education)discretionary trust: trustee can use res any way he wants for beneficiary

the trustee has a fiduciary responsibility to beneficiary (sometimes trustor could be beneficiary)

the beneficiary can sue the trustee

VALID TRUST1. A writing usually2. res3. trust intent4. identifiable beneficiary5. trustee (can be court appointed)

As long as different legal entity OR one more beneficiary if trustee is beneficiary it is a valid trust

FARKAS v .WILLIAMS

Farkas----------------------------res (stocks)--------------------Farkas (trustee)(trustor) |/ \ Farkas (life estate)2 heirs Williams (remainder)

Heirs argued no present transfer to Williams. Farkas never severed titles: he had control as trustor/trustee/and as a beneficiary. As a result this transfer must comply with wills statutes

Court found it to be a valid intervivos trust

There was present transfer between Farkas and Williams

Did Williams acquire an interest in the stock?Court held Farkas had trust intent, even though Williams wouldn’t get anything until Farkas’s deathFarkas created a fiduciary responsibility as the named trustee. This theory let court make decision that he had obligations to WilliamsBecause a trustee is limited by fiduciary duties

Williams could’ve sued if Farkas made dumb mistakes

But Farkas as settlor could revoke anytime he wanted, so he wasn’t really limited. Court reasoned he never revoked, so he had the duty. Farkas assumed the responsibility in life so therefore he created the duty to Williams

In re Estate of Pilafas

Pilafas-----------------res was property-----------Pilafas / \

non profit family (excluding three kids)

Also wrote a will that contained a pour over clauseThree kids who were left out argued that : TRUST REVOKED BY DESTRUCTION

Couldn’t find the trust or the will. The presumption kicks in.If a will can’t be found that was in decedent’s possession it is presumed destroyedThey argued that trust should have same presumption

Court wouldn’t apply wills law to the trustPilafas had a specific provision on how trust was to be revoked: his own writingIf it didn’t say anything about revocation, presumption may have workedAnything in will: intestacyAnything in trust: beneficiary

State Street Bank v. ReiserThis case stated that creditors may come in and get property that is in the trust

Trusts are will substitutes. Don’t have to apply wills law to trusts (Farkas)You don’t apply law of will revocation to a trust (Pilafas)Creditors can go after assets in a will. Creditors can also go after assets in a will substitute (Reiser)

POUR OVER TRUSTSresiduary clause funds the trust

1/1/90 write a will with a residuary clause. RC goes towards trust1/1/90 trust is set up

Bulk going to residuary clause so bulk of property going non-probateYou can change the will by changing the trust. No formalities needed. Is this okay?YES

How established?1. incorporation by reference:

trust document must be in existence at the time of executionclear identification of document (change document, change will)

doesn’t have to be funded during life2. independent significance

trust document doesn’t have to be in existence at time will is executedas long is there is some res in trust it is valid. If nothing there it looks more like testamentary act

UNIFORM TESTAMENTARY ADDITIONS TO TRUSTS ACT (1990) validates pour-over wills

Clymer v. MayoMayo set up a will and a trust. From residuary clause most of her propertygoing to trust. In the will, she named husband as a beneficiary. Also named him as beneficiary in TRUST A: marital trust and in TRUST B. In each one he was given life interests.

The Mayos divorced.Does wills law revoke this trust?This is what her heirs argue.

Invalid trust: if invalid nothing goes through. In the will, husband gets nothingEverything goes intestacy. Heirs argue entire trust funded at death so it has to comport with wills formalities

Court held that UTATA applies. As long as trust in existence at time of will it isvalid. No res needed if will: identifies trust, trust executed at same time

Therefore even though no funds, it is proper

Second argument: because of divorce TRUST A revoked. Court agreed that TRUST A is revoked by law

Clymer: (continued)Massachusetts had adopted UTATA, therefore as long as the trust document in existence at time of will, it doesn’t matter that there is nothing in the res. A validinter vivos trust exists.

The heirs won on TRUST A because no marriage exists.

TRUST B: on its face it is valid but court applied divorce law to will substitute.The court reasoned nothing in the trust anyway. The will and trust were so

closely tied it should have effect of being one document so wills law should apply and revoke by operation of law the spouse’s interest in trust B.

So now trust goes to nieces/nephews. But she had none. They were her husband’s. Upon divorce they’re not related. Court didn’t agree with this.At time trust set up, she referring to these particular nieces/nephews (HIS).She had the intent for trust to go to them until they were 30 and then go to two schools. Court allowed this.

Oklahoma revokes interest “pro-ex” spouse favorUPC: revokes the interest for wills and will substitutes toeveryone in family.

You can apply wills law to substitutes if they are closely related

ELECTIVE SHARES/FORCED SHARES

COMMUNITY PROPERTY (9 STATES)any property that is acquired during marriage (exceptindividual gifts, inheritance) is community property

SEPARATE PROPERTY (MAJORITY)who ever has title to property before or duringmarriage is that person’s property: Title based