Table of Contents Article I...................................INTESTATE SUCCESSION 2 Section 1.01............................................Generally 2 Section 1.02..........................Spousal Intestate Succession 2 Section 1.03...................Descendants and Intestate Succession 2 Section 1.04...............Other Relatives and Intestate Succession 3 Section 1.05.........................Altering Intestate Succession 4 Section 1.06....................................Defining “spouse” 6 Section 1.07.................................Defining “descendant” 8 Article II................................................. WILLS 11 Section 2.01........................Formalities for Attested Wills 11 Section 2.02......................Formalities for Unattested Wills 13 Section 2.03.............................................. Intent 13 Section 2.04............................................Capacity 14 Section 2.05...................................... Undue Influence 15 Section 2.06............................................... Fraud 15 Section 2.07............................................Remedies 16 Section 2.08..Unattested Documents: when can a will incorporate by reference? 16 Section 2.09.................................Representation Issues 17 Section 2.10....................Revocation by Subsequent Instrument 17 Section 2.11....................................Revocation by Act 17
Transcript
Table of ContentsArticle I. INTESTATE SUCCESSION............................................................................................... 2
Section 1.01 Generally................................................................................................................................2Section 1.02 Spousal Intestate Succession..........................................................................................2Section 1.03 Descendants and Intestate Succession........................................................................2Section 1.04 Other Relatives and Intestate Succession...................................................................3Section 1.05 Altering Intestate Succession.........................................................................................4Section 1.06 Defining “spouse”................................................................................................................6Section 1.07 Defining “descendant”.......................................................................................................8
Article II. WILLS.............................................................................................................................. 11Section 2.01 Formalities for Attested Wills......................................................................................11Section 2.02 Formalities for Unattested Wills.................................................................................13Section 2.03 Intent.................................................................................................................................... 13Section 2.04 Capacity............................................................................................................................... 14Section 2.05 Undue Influence................................................................................................................15Section 2.06 Fraud.................................................................................................................................... 15Section 2.07 Remedies............................................................................................................................. 16Section 2.08 Unattested Documents: when can a will incorporate by reference?.............16Section 2.09 Representation Issues.................................................................................................... 17Section 2.10 Revocation by Subsequent Instrument.....................................................................17Section 2.11 Revocation by Act............................................................................................................. 17Section 2.12 Revocation by Changes in Circumstances................................................................18Section 2.13 Revival................................................................................................................................. 18Section 2.14 Dependent Relative Revocation..................................................................................19Section 2.15 Lapse and Anti-lapse Statutes......................................................................................20Section 2.16 Will Substitutes: Creation, Revocation, and Subsidiary Law of Wills.............22Section 2.17 Protecting Spouses.......................................................................................................... 24Section 2.18 Protecting Other Family Members.............................................................................26
Article III. TRUSTS.......................................................................................................................... 26Section 3.01 Private Trusts and their elements..............................................................................26Section 3.02 Parties to Trusts............................................................................................................... 27Section 3.03 Trustee Duties................................................................................................................... 28Section 3.04 Beneficiary Rights on a Trust.......................................................................................28Section 3.05 Trust Restraints on Alienability..................................................................................30Section 3.06 Trust Termination and Modification.........................................................................30Section 3.07 Charitable Trusts..............................................................................................................31Section 3.08 Cy Pres.................................................................................................................................. 32Section 3.09 Enforcing Charitable Trust Obligations....................................................................32
Article IV. Recap.............................................................................................................................. 33
Article I. INTESTATE SUCCESSIONSection I.01 Generally
(a) In effect when no will or an ineffective will; factors considered:(i) Fairness to family members, vulnerable parties (dependents)
(ii) Fairness to creditors(iii) Intent—fairness to the decedent’s intent
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(iv) Equity and proportionality(v) Want to keep system legitimate and instill perception of fairness
(vi) Want a productive owner of property (real property)(vii) Remember: tension between administrability of an estate from probate and the fairness
issue(b) Cases
(i) Shelley v. Kramer, p.12(ii) Shapira v. Union National Bank, p.14
1) Control of assets given to decedent v. living 2) Donative intent trumps; if restriction still leaves large pool then will prob be enforced3) Court held that restriction on will only given to sons if they married w/in7 years of
testators death to jewish women whose parents are both jewish was VALID4) Dead hand control : should states allow these types of restrictions?
a) Want to encourage people to make wills - n/ enforcing would undermine the attraction of making a will; encourage planning b/c indivs know their own business best, will have the best ideas about how to transfer their assets to achieve the best outcome
b) People try to maximize their assets more if they know that it'll stay w/in their families - encourage accumulation of property
(i) §2-102 –Intestate share taken by decedent’s surviving spouse1) Entire estate if no descendants or parents survive decedent, or decedent and spouse
share all children 2) 300k + ¾ balance if decedent’s parent survives decedent3) 225k + ½ balance if decedent and spouse share all kids and kids still living who are
not descendants of decedent4) 150k + ½ balance if one + decedent’s descendants are not spouse’s descendants
(ii) policy considerations for parent share: protect some assets if spouse remarries; no kids; if young wealth may be attributable to parents. ONCE there are DESCENDANTS, no share for parents
(b) Conduit Theory of Spousal Share: surviving spouse will be a conduit for property to eventually go to shared descendants.
Section I.03 Descendants and Intestate Succession(a) Intestate distribution regimes, p.33
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(i) STRICT PER STIRPES1) Start at next generation down even if all dead. Most traditional way to distribute
property(ii) UPC PER STIRPES [aka per capita w representation]
1) By the stock2) First cut: at next generation down w/ at least 1 living descendant. 3) Step 1: set up primary shares with ea surviving child OR predeceased with children 4) Step 2: for each primary share, keep that share within the child’s family. So if 4
grandkids, 1 c share as much as 1 grandchild from 1 c5) Step 3: fairness is divided at child level and then, like column down generations6) If one of the children survives parent, child gets 1/3 and GC gets none
(iii) PER CAPITA at Each Generation [NY]1) First cut: living generation, then even by generation. allocate primary shares at
generation with at least one surviving descendants2) Horizontal equality3) Take only when representation needed, if ancestor rep’d then descendant does not
take.(b) UPC Provisions
(i) §2-103 Share of Heirs other than Surviving Spouse1) after distributed to spouse or if no surviving spouse…2) (a)(2) if no surviving descendant, to decedent’s parents or parent3) (a)(3) if no surviving descendant, no parents, then to siblings4) (a)(4) if no surviving descendant, no parents, no siblings, then to grandparents then to
aunts/uncles/cousins a) (A):half to paternal gp or descendants taking by rep; (B): half to maternal gp or
descendants by rep.5) (a)(5) if none of the others, then to stepkids—very last resort
(ii) §2-106 1) once 103(a)(4) kicks in, use 106(c) to distribute –look for closest descendant to
deceased grandparent (iii) §2-709
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1) (b) per capita at each generation: property divided into as many equal shares as there are surviving descendants in the generation nearest the designated ancestor which contains one or more surviving descendants; and deceased descendants in same general who left surviving descendants. Each surviving descendant is allocated 1 share. Remaining shares combined and divided in same manner among descendants
2) (c) Per stirpes: property divided into as many equal shares as there are surviving children of designated ancestor and deceased children who left surviving descendants. Each surviving child is allocated 1 share. Desceased children’s share divded in the same manner w subdivision repeating at each succeeding generation until property fully allocated among descendants.
(c) Guardianship(i) What about when distributing assets and minors are in the picture? 1) Minors have a conservatorship or guardian appointed to manage their property for
them2) Problem with guardianship is that it is burdensome and creates lots of costs in name of
protecting minor (trusts are easier and better way to plan)3) Always advise clients to name a guardian for their minor child
Section I.04 Other Relatives and Intestate Succession(a) Classes of other relatives
(b) Parentelic system (i) A parentela= an ancestor and that ancestor’s surviving descendants.
(ii) Favors ancestors over collaterals—elderly parents often look to kids for support—sibling contemporary likely to have more earning potential—even if not true, intestacy assumes that if decedent wanted something specific would have written a will.
(iii) UPC goes to 3rd parentela first (GP and descendants)(c) UPC Provisions
(i) §2-103 —Share of Heirs Other than Surviving Spouse1) (a) Any part of the intestate estate not passing to a decedent’s surviving spouse under
§2-102, or the entire intestate estate if there is no surviving spouse, passes in the following order to the individuals who survive the decedent:
a) (1) to decedent’s descendants by representation;b) (2) if there is no surviving descendant, to the decedent’s parents equally if both
survive, or to the surviving parent if only one survives;c) (3) if there is no surviving descendant or parent, to the descendants of the decedent’s
parents or either of them by representation;i) Allows both full- and half-blood siblings to take as descendants of decedent's
parents - “either of them” means could be descendants of just one parentd) (4) if there is no surviving descendant, parent, or descendant of a parent, but the
decedent is survived on both the paternal and maternal sides by one or more grandparents or descendants of grandparents:
i) (A) half to the decedent’s paternal grandparents...
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ii) (B) half to the decedent’s maternal grandparents...iii) Resembles per stirpes system - b/c as long as there are any surviving descendants,
will distribute equally to each side, rather than looking at where the surviving ones are and then pushing it down through generations
iv) Concern that when dealing w/ GP’s there isn't necessarily equal representation; n/ a situation where we're looking at all the descendants of a single person but looking at two families
a. Policy preference of preserving family harmony than abandoning per stirpes system2) (b) If there is no taker under (a), but the decedent has:
a) (1) one deceased spouse who has one or more descendants who survive the decedent, the estate or part thereof passes to that spouse’s descendants by representation; OR
b) (2) more than one deceased spouse who has one or more descendants who survive the decedent, an equal share of the estate or part thereof passes to each set of descendants by representation.
c) Situation where decedent has NO blood relationship or adoption w/ this person - it's the child of ONLY the pre-deceasing spouse
i) Decedent's step-children: step-children of a marriage that ended in the death of spouse, not from divorce
(i) §2-1106 --renunciationa) (3) If the instrument doesn’t contain a provision [for how to distribute if someone
disclaims - in that case, would follow will], the following rules apply:i) (A) If disclaimant isn’t an indiv, the interest passes as if disclaimant did not exist
ii) (B) If disclaimant is an indiv, except as provided in (C) & (D), interest passes as if the disclaimant had died immediately before the time of distribution
a. Only the disclaimed interest passesiii) (C) if by law or under the instrument, the descendants of the disclaimant would
share in the disclaimed interest by any method of representation had the disclaimant died before the time of distribution, the disclaimed interest passes only to the descendants of the disclaimant who survive the time of distribution
2) NOTE: in disclaimer only the interest disclaimed passes; NOT the estate –if disclaim looks like per stirpes
(b) Contractual agreements(i) Can K around statutes provided all relevant parties agree
(ii) Policy: drafting trying to figure out what most people would want but if actual heirs think alt preferable, probate courts will allow
(iii) Problems: 1) Getting agreement from all successors can be a challenge2) Limits pot—people will put up obstacles b/c don’t want to take less
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3) Minors and incompetent persons—raise issues of guardianship. Here, K situation serious problem.
(i) In the US we do not have to take the money allocated to us. If those ‘among the living’ wish to reorganize, they can do so but there will be taxation
(ii) Qualified Disclaimer :1) We will act as if distribution never happened—then tax according to what happens
after the disclaimer (because sometimes people would try to manipulate to avoid taxation or paying creditors)
a) Requirements: i) Must be in writing;
ii) Executed quickly (w/in 9 mo); iii) Person who disclaimed cannot thereafter assert any control or enjoyment over the
property(iii) Why use a disclaimer?
1) Avoid tax; 2) Another relative may need $ more; 3) Not going to be able to enjoy it b/c of creditors; 4) Personal feuds/dislike grantor5) Avoid complications—don’t’ want to take care of property, etc.;
(d) Advancement(i) Means what it sounds like; take off the $$ received in life but there must be a clear
intent –anything unclear or implied will not be counted as advanced(ii) Advancements valued as of date of advancement (§2-109(b))
(iii) Advancement must be in writing, cealring indicating the nature of the inter vivos gift (§2-109(a))
(e) Negative Wills(i) Carries over into the intestacy system. If someone doesn’t manage to cover all assets in
will, a negative will “statement of intent not to transfer to sally jane” will carry over. Named person will be excluded from intestacy distribution
(f) Cases(i) Waring v. Loring, p.56
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1) Court holds that a negative will is not clear enough expression of intention to block intestacy going to wife
2) Stmt saying provisions go to wife instead of statutory rights is not a negative will; maj says that statutory rights do not include intestacy rights and therefore she can take from intestacy.
Section I.06 Defining “spouse” (a) Consider
(i) Donative intent(ii) Financial interdependency
(iii) Emotional support (iv) Vulnerability of surviving spouse(v) Aministrability and efficiency in the intestate system ; universal application
(b) IF a spouse, take. If not, no. Status determination under UPC(c) UPC Provisions
(i) §2-802 —effect of divorce, annulment, and decree of separation1) (a) An indiv who is divorced from the decedent or whose marriage to the decedent has
been annulled is not a surviving spouse unless, by virtue of a subsequent marriage, he [or she] is married to the decedent at the time of death. A decree of separation that does not terminate the status of H & W is not a divorce
a) An exclusion definition2) (b) A surviving spouse doesn’t include:
a) (1) an individual who obtains or consents to a final decree or judgment of divorce from the decedent or an annulment of their marriage, which decree or judgment isn’t recognized as valid in this state, unless subsequently they participate in a marriage ceremony purporting to marry each other to the other or live together as H & W;
i) Good faith idea - if people believe in good faith that they are divorced, they'll be treated as divorced in this situation
ii) Idea/intent of the statute is that if people have a decree that they believe is good & then act based on that decree, will allow people to rely on that (for both 1 & 2)
iii) Issue of remarriage arises in elective share statutes - b/c UPC elective shares are determined in part by how long the parties were married, & if there are two marriages, those periods will be added together
iv) Annulment acts in the same way as a divorcev) Need a final order/decree (Holmes case, below - had none)
b) (2) an individual who, following an invalid decree or judgment of divorce or annulment obtained by the decedent, participates in a marriage ceremony w/ a 3rd indiv; or
c) (3) an indiv who was a party to a valid proceeding concluded by an order purporting to terminate all marital rights
(ii)
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(d) Cases(i) Holmes v. Fentress, p.611) Neff left everything to Geissinger, will invalidated. Q of whether G takes under
intestacy b/c held themselves out as divorced but divorce was ineffective. G does take under intestacy;
2) Could take under UPC, too, b/c no decree. Under 2-802(b) the almost-divorce situations require having some final order or statement from the court; here, H&W made a petition to the court but there was no decree
3)(ii) In re Quarg, p.66 [contract approach to partnership]
1) Court upholds contract between deceased and second partner. K language: “I be your life partner and in return I get access to your assets”
2) Considerations: interest in marital property by virtue of mutual efforts during relationship contributing to creation, acquisition, and preservation of such property
3) Broad ruling for people in this situation4) Criticisms for using contract approach -
a) Any requirement of an express contract runs into the problem of people having to opt into it - will tilt who is protected in favor of more wealthy & more sophisticated parties (in terms of law & financial transactions) - biasing effect
b) Disrespectful to treat these relationships like business arrangements/financial transactions - family relationships have status protection b/c won’t inquire into relationships (will just get rights based on that status)
5)(e) Classifications of partnerships
(i) Putative spouse 1) Any person who has co-habited with another to whom he is not legally married in the
good faith belief that he was married to that person; there was a ceremonial marriage but something defective
(ii) Common law spouses 1) No ceremonial marriage: just decided to be married. Act married. Generally, must
hold yourself out, but cannot be common law married if you say you are not married and are just living together. [NY accepts]
(iii) Same sex partners 1) Unsettled area. Some have to rely on the K arrangement.2) Four main approaches:
a) Spousal status is the only kind of status of this type - only available to opposite-sex partners; have to rely on wills and K arrangements.
b) Spouse is the only category of this type - but available to everyone, opposite & same-sex partners
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c) Civil unions - a new status but w/ all the same rights & responsibilities of the spouse status, just called something different (trying for a middle ground)
i) Once someone achieves the status of being a member of a civil union, they will get all the same rights/responsibilities of spouses
ii) Members of a civil union - under UPC - would be treated exactly as spouses iii) get intestacy rights—various limitationsd) Reciprocal beneficiaries - adopting a new status (in other states called "domestic
partners"). Formal (n/ functional) - ie, must be formalized w/ license, state's authority, etc. - no question into the relationship
i) W/ that status, couple is entitled to a set of rights/responsibilities that are NOT exactly the same as the ones for spouses
Section I.07 Defining “descendant”(a) When interpreting a doc, look at intent first and then look at intestacy definitions(b) UPC provisions
(i) §2-114 Parent barred from inheriting in certain circumstances1) (a) A parent is barred from inheriting from or through a child of the parent if:
a) (1) the parent’s parental rights were terminated and the parent-child relationship was not judicially reestablished; or
b) (2) the child died before reaching 18 & there is clear and convincing evidence that immed before the child’s death the parental rights of the parent could have been terminated under state law on the basis of nonsupport, abandonment, abuse, neglect, or other actions or inactions of the parent towards the child
i) States differ on the grounds that will bar a parent from inhering - but always some kind of parental misconduct. High standard of proof (b/c controversial)
2)(ii) §2-117 No distinction based on marital status
(iii) §2-118 adoptee and adoptees adoptive parent or parents1) adopted children take from their adoptive parents; creates a legal parent-child
relationship(iv) §2-119 Relationship between Adoptee and Genetic Parents(v) §2-120 Child conceived by assisted reproduction other than child born to gestational
carrier1) no potential relationship between child and donor only. Egg or sperm donor is not the
relative.2) Presumptions: husband of birth mother = father; birth cert, whoever is on that is the
parent.3) Posthumous child, conceived using decedent’s frozen sperm: have to show, by clear
and convincing evidence, that decedent intended the child to be his.(vi) §2-121 Child born to gestational carrier:
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1) if surrogate who is also genetic mother of child, that person is a potential parent (of last resort)
(vii) §2-705 Class gifts construed to accord with intestate succession1) should people other than those whose assets are at stake be able to determine who are
takers? 2) (f) adoptee not considered child of adoptive parent unless
i) adoption took place before adoptee reached 18 years of age; adoptive parent was adoptee’s step or foster parent; or adoptive parent functioned as parent before adoptee reached 18
(c) Classifications(i) Clear genetic children born of wedlock -(§2-117)
(ii) Adopted children (§§2-118; 2-119)1) Once adopted, treated as biological child.2) Once adopted, can no longer inherit from or through biological parents (In re
Donnelly)a) Some wiggle room when biological parent remarries after other bio parent’s death
and new spouse adopts. (2-119)3) Equitable adoption —looks at where children are foster or step children and parents
wanted to adopt but defective somehow (not in upc)4) “stranger to the adoption” doctrine: when talking about gift to testator’s own children,
adoptive children will be included. But when talking about gift from testator to testator’s brother, what about the brother’s kids?
a) Interpretive rule: if no other info about intent of donor, going to assume if a sranger to adoption then didn’t meant to include adoptive children in class gift.
b) Generally rejected today. Overtaken by 705(f)(iii) Nonmarital children
1) All children take from and through parents under intestacy2) More about evidence than intestacy—easy to prove matrilineal but hard to prove
patrilineal if a nonmarital child3) Uniform Parentage Act:
i) Sets up a series of presumptions that can be used to conclude a person is the father, based on marriage to the mother at the time of the child's birth, married to the mother during the period of gestation/child's birth, H agrees to be named on the birth cert., etc.
ii) Can be rebutted but after some time period, the presumptions are irrebuttableiii) Relies heavily on genetic testing & refusal to submit to a genetic test can be used to
determine paternity against the person that refuses. b)
(iv) Assisted reproduction children (§§2-120; 2-121)
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1) Always ask “who intended to serve as the parent”2) Possible parents: people who raised them, genetic parent, gestational carrier3) Under UPC 2 classes:
a) Children of Assisted Repro that had a gestational carrier (2-121)i) Potential parent if all else fails
b) Children of assisted repro who did not have a gestational carrier (2-120)i) Egg donor or sperm donor never a potential parent
(v) Afterborn heirs?1) §2-1042) Must be conceived while decedent still alive but born after decedent’s death.
(d) Cases(i) Estates of Donnelly, p.74 [intestacy from birth family after adoption]1) Decedent left all to wife, who predeceased, now intestacy. Decedent’s son died and
surviving spouse remarried. New husband adopted decedent’s granddaughter. Granddaughter could not inherit through biological father because she could not inherit from her biological father either.
2) Court says: once give up ability to take from biological father, give up ability to take through bio father. A lawfully adopted child shall not be considered an heir of his natural parent
3) Takeaway: know UPC(ii) Ohio Citiens Bank v. Mills, p.89 [stranger to the adoption doctrine]
1) Stranger to the adoption doctrine says adopted kids can inherit from but not through adoptive parents b/c the stranger to the adoption did not intend for the adoptee to take
2) Stranger to the adoption doctrine applies to trusts and wills created before statute abrogating the doctrine (the statute that places adopted children on same footing with natural children)
3) Law at time of execution of trust or will is the law that applies, even if law overturned at time of disbursement.
4) Stranger to the adoption doctrine does not apply anywhere! (iii) In re Martin B, p.101 [class gift; assisted repro]
1) Grantor set up trust for his descendants. Question is whether children of grandchild who left his sperm on ice are included in the class gift? Sperm put on ice before grantor died and after trust created.
2) Court said that the controlling factor is the grantor’s intent as gleaned from a reading of the trust agreements. Grantor intended for all members of bloodline to take.
3) Considerations: a) General rule is that a posthumous child can take if conceived before disposition is
effective. Not effective here b/c child not conceived but there was a clear intent to form a p-c relationship
b) Unless circumstances indicate otherwise, if person intended to act as parent then children should be considered in the class—here clear intent was available
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Article II. WILLSSection II.01 Formalities for Attested Wills
(a) UPC provisions(i) §2-502—execution of wills [governs]1) (a)(1) in writing
i) what constitutes in writing? (email, computer doc) but probably signature and attestation requirements hard to meet. No video wills.
2) (a)(2) signed by testator or in testator’s presence and by testator’s directiona) UPC will accept unattested wills NY will not
3) (a)(3)(A) signed by at least 2 [credible] individuals each o whom signed within a reasonable time after individual witnessed either signing of will or testator’s acknowledgement of that signature
(ii) §2-503 —harmless error1) even if not in compliance w 502, will be treated as valid if est by clear and convincing
evidence that testator meant the doc to constitute will, partial revocation of will, addition/alteration of will, or partial/complete revival from formerly revoked will
(b) Elements:(i) Must be in writing
(ii) Orientation of witnesses 1) Everyone in same room and visible to each other
(iii) Disinterested witnesses 1) Only VT still requires 3, notary counts as 2.2) Treatment of breach of “disinterested” varies between states—some states invalidate
entire will, some states only void bequests to that witness3) UPC §2-505 says there is no effect if witness is an interested party
(iv) Publication 1) There is a declaration at the ceremony regarding the testator’s intent, competency, fact
that will, signature is testator’s, in the presence of the witnesses
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(v) Signature of testator 1) Dated and signed at the bottom as witnesses watch2) In NY, must be at the end of the will b/c anything after signature will be ignored
(vi) Attestation 1) Each witness should read aloud the attestation clause and sign and date
(vii) Integration 1) Staple the pages together
(viii) Self-proving affidavit 1) Affidavit witnesses signed when signed will that declare that saw all the formalities
complied with; creates presumption that formalities complied with(ix) Notarization
1) UPC says that notarization is sufficient to fulfill the attestation requirement; but notary alone does not meet attestation unless states adopted upc 2008 amendments.
(c) Reasons for formalities(i) Evidentiary; cautionary; protective; channeling
(ii) Lawyer supervising who fucks up can be liable to intended divisees(iii) Policy discussion:
1) Achieving donative intent - but in some of these cases, donative intent doesn't seem to be actuated
2) Protecting vulnerable parties3) Fairness - treating people fairly in a way that makes sense based on a lay person's view
& not undermining the legitimacy of the legal structure. Formalities may create problems for unsophisticated parties - make it seem that the law is unfair
4) Need something administrable - a system that provides good evidence of someone's intention; the formalities serve a good purpose here
(d) Regimes(i) Strict Compliance : mckellar; follows everything from 502
(ii) Substantial Compliance: convincing attempt to comply such that the will is trustworthy (small defect)
(iii) Harmless Error: upc 503. Can dispense with formalities if there is a doc and clear and convincing evidence that the decedent intended doc to be will; irrelevant whether treid to meet formalities
(e) Cases
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(i) Estate of McKellar, p.114 [signature requirement]1) Strict compliance with signature requirement2) Will not properly executed when no witnesses saw McKellar sign nor did they hear
her mention it3) Takeaways:
a) Person’s name written in his or her own handwriting is NOT necessarily a signature if testator’s name is not written in freestanding form, there should be other evidence that testator adopted doc as his will.
b) Execution of will is a statutory privilege not a constitutional or common law right. While intent of testator is most important, courts first have to look at statutory requirements.
c) Attesting witness must know document being signed is the testator’s last will and testament
4) Under Harmless Error—would be executed as valid b/c of McKellar’s intent. She wrote doc, called in witnesses, thought it was her will.
5) Under Substantial Compliance—would be executed as valid b/c knew she was supposed to sign and signed in wrong place.
(ii) Estate of Peters, p.122 [Attestation requirement]1) Strict compliance with attestation requirement2) Will not valid when Marie left all to Conrad and then to Joseph. M and C both dead,
now J appeals. Will not signed by witness who saw Conrad acknowledge will or witness who saw Conrad sign. Someone signed as notary. Witnesses signed 18 mo after Conrad.
3) Takeaways:a) Witnessing requirement means dual acts of observation and signature—both events
need to occur contemporaneously or within close succession; witnesses must sign w/in reasonable time of observation
b) Purpose of witnessing is to prevent fraud or mistakec) Court reasoned that substantial compliance ignoring formalities oversteps judiciary
(iii) Stevens v. Casdorph, p.128 [witness]1) Strict compliance with “presence” meaning witness requirement 2) Will was not valid when witnesses did not see testator sign nor did they see the other
witnesses sign. Witnesses were all employees in a bank and walked the will over to each other. Which was not in compliance with state statute.
3) The UPC does not require witnesses sign in presence of testator or presence of each other but does require witness to witness testator’s act of signing OR testator’s act of acknowledging it is his will/sig
4) 2-505 says a witness can be interested party without disqualifying the will/devises(iv) Estate of Hall, p.134 [Notary Attestation]
1) Harmless error applied to have notary satisfy attestation requirement2) Joint will was valid when no attesting witnesses and instead notarized + signature of
testator and testator’s wife.
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3) Takeaways:a) If 2 people do not properly witness doc, 2-503 allows doc to still be treated as if it
had been when clear andn convincing evidence that decedent intended as will.b) UPC auths notarized wills –in writing, signed by testator , and notarized= valid
execution b/c notary’s principal duty is to verify identity of person signing docc) Policy consideration: public thinks of notaries as “officially legal” so ease of access
Section II.02 Formalities for Unattested Wills (a) Types: Noncupative (oral) and Holographic (written)
(i) Holographic Will 1) Made in the handwriting of the testator; material provisions 2) Common issues: identity not verified; issue of thoughtfulness put in—could be hasty;
how much written in handa) Prevention of fraud - if the will is entirely in testator’s handwriting, allow it, b/c it’s
harder to forge someone's handwriting for an entire long document b) Intent - having an entire document written by the testator provides a good indication
of intent (although issues are raised b/c w/ attested wills, going through the ceremony of getting witnesses - that also evinces intent)
3) Not allowed in NY. To manage probate case load and to simplify interpretation of unsophisticated parties.
(b) UPC Provisions(i) §2-502 -holographic will and extrinsic evidence1) (b) will not satisfying execution requirements is valid as a holographic will whether or
not witness IF signature and material portions of doc are in testator’s handwriting2) (c) extrinsic evidence can come in to show intent
(ii) Requirements: handwritten and signed –issue arises around question of how much needs to be handwritten
(c) Cases(i) Estate of Black, p.141 [validity of holographic will//handwriting]1) Substantial compliance case2) Holographic will as valid when testator use a preprinted form and also handwrote
residuary devises but used designated blanks for dates etc. 3) Court said that the primary legislative purpose of holographic will was to prevent
fraud; the statute in Cali only req’d written, dated, and signed by hand of testator and printed matter no inc’d would not be considered
4) Takeaways:a) Intent was the most important thing.
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b) Favor will regime over intestacy—goal of interpretation was to avoid intestacy(ii) After Black, 2 nd gen holographic statutes required material provisions in testator’s
handwriting(iii) 3 rd gen holographic statutes allow extrinsic evidence under §2-502(c)
(d) Policy considerations(i) For:1) makes writing a will more accessible for people who can’t afford attorneys2) lack of formalities does not indicate lack of serious treatment of writing will
(ii) Against:1) don’t want people dashing of wills without evidence of clear thinking and deliberate
decision making2) Technology/legibility3) People without resources don’t need to make wills
Section II.03 Intent(a) With express statement of testamentary intent, presumption and can overcome but
only with a high evidentiary burden(b) UPC Provision
(i) §2-502(c )—extrinsic evidence.(c) Cases
(i) Estate of Kuralt, p.148 [extrinsic evidence to glean intent//Tv guy] 1) Extrinsic Evidence was considered to determine testator’s intent of codicil2) Kuralt wrote a letter in hospital to mistress stating lawyer would make sure mistress
would inherit MT property. Mistress then claims this is codicil and wife argues the letter lacks testamentary intent
3) Takeaway: extrinsic evidence admitted only where there is some ambiguity about intent
4) Can further intent to look at extrinsic evidence but intent not always captured in a document
5) If intent is left in doubt, must be arrived at by considering all circumstances HOWEVER extrinsic evidence cannot manufacture testamentary intent where doc contains no indication
6) Harmless error inapplicable b/c issue is intent and that is substance of will.Section II.04 Capacity
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(a) Age Capacity: bright line rule. Usually 18 years(b) Mental Capacity: testator must be able to (not actual knowledge, just capability;
applies to wills and revocable trusts but higher burden than irrevocable trusts/gifts)(i) Know nature/extent of property
(ii) Know natural objects of his bounty (who takes under intestacy)(iii) Know disposition he is making(iv) Understand how all the element interrelate
(c) UPC provisions(i) §2-501 —who can make a will1) 18 and of sound mind.
(ii) §5-411 —req’d court approval?(d) Types of incapacity
(i) Lucid interval : mentally incompetent part of the time with lucid intervals can make will valid if written in that interval
(ii) Insane delusion : belief testator adheres to against all evidence and reason—must have no foundation in fact
(e) Cases(i) Fletcher v. DeLoach, p.157 [capacity in unnatural bequest]1) Will invalidated (capacity is a jury q, court looked at sufficiency of evidence) based on
evidence of unnatural bequests—all went to one child and none to other 2. 2) Consider:
a) Depression, disorientation, change in appearance, reasonableness of unnatural bequest
b) Reasonableness of the testamentary scheme; no financial disparity btn kids so it was not reasonable to leave all to 1—court said this was the real problem—the unequal/unnatural distribution.
c) Prof said more frequent to invalidate will when unnatural bequest and no financial disparity—when invalidated all kids take equally.
(ii) Lucero v. Lucero, p.160 [lucid moment case]1) Child favored in previous will fought new will, citing incapacity. Evidence supported
lucid interval—she recognized people, remembered details of trade, and new will treated children equally.
(f) Patterns in capacity cases(i) More frequent that an unnatural bequest (read: not to descendant or all to one and none
to siblings) will be invalidated
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Section II.05 Undue Influence(a) If a confidential relationship and at least 1 suspicious circumstance, then
presumption of undue influence created (rebuttable by ∆)(b) UPC provisions
(i) §2-517 —Penalty Clause for Contest1) Provision cutting bene out of will if contests disbursements.
(ii) Restatement §8.3 (c) Factors
(i) Confidential relationship between testator and undue influencer 1) Fiduciary (testator and hired professional, Q of law)2) Reliant (family, special trusting relationship, confidence, Q of fact)—more about
confidences3) Dominant-subservient (testator sub to influence, Q of fact)—more about fear
(ii) Suspicious circumstances surrounding will (only need 1) 1) Donor in weakened condition—physically, mentally, or both2) Influencer heavily involved in preparation of will3) Lack of independent advice obtained4) New will prepared in secrecy and haste5) Attitude toward others has changed y reason of relationship with influencer6) Discrepancy between new and previous wills7) Continuity of purpose in former versions now departs8) Unnatural, unjust, or unfair
(d) Cases(i) Lipper v. Weslow, p.1671) Confidential relationship: fiduciary (son wrote the will) AND reliant (lives next door,
has key)2) Suspicious circumstances: change in disposition (used to give to all 3); procurement
(favors son who wrote will); unnatural bequest (leave unequally to 2 not all 3); secrecy (not read to mother after written)
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3) But for causation—but for the undue influence would she still have taken the actions she did?
(e) Vulnerability of Estate Plans(i) Unmarried cohabiters
(ii) Surviving spouse, but not spouse producing descendants(iii) In terrorem/No contest clause (if you bring a contest, you forfeit devise) (§2-517)
1) Automatically makes it look suspicious. Works best with a complex plan where parties may fight each other. Many courts find unenforceable but in NY upheld.
(f) Attorney’s Professional Responsibilities(i) Cannot name self as bene in will lawyer is drafting; unless a close, familiar relationship
existsSection II.06 Fraud
(a) Can be in execution or inducement(b) UPC provisions
(i) §2-517 —no contest clause(c) Cases
(i) Latham v. Father Divine, p.1761) Allegation that ∆ killed testator to prevent her from changing her will 2) Court says constructive trust can arise from this situation if it is true; father divine
would have to pay damages to harmed descendants.Section II.07 Remedies
(a) Constructive Trust(i) Court treats the property that defendant receives as if the defendant was holding it in
trust for the plaintiff. Prevents unjust enrichment. (usually only for fraud)(b) Tort—intentional interference with an inheritance
(i) Damage remedy. Only available if claim could not have been asserted as part of proceedings to admit will into probate
(ii) Can seek consequential and punitive damagesSection II.08 Unattested Documents: Incorporation
(a) Incorporation by Reference: when can a will refer to doc that does not have the formalities and the doc can still be used to distribute assets?
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(i) Doc must be in existence at time of will AND the will must reference the doc. Many courts will refuse to incorporate even if excellent evidence that the doc was in existence b/c not mentioned in a will.
(ii) NY does not allow at all. BUT can allow exhibits as part of will?(b) Acts of Independent Significance : all jurisdictions give effect to devises that identify
the property or the devisee by reference to acts and facts that have independent significance (§2-513)
(i) Restatement : Meaning of a dispositive or other provision in a will may be supplied or affected by an external circumstance referred to in the will, unless the external circumstance has no significance apart from its effect upon the will
1) For ex. - “devise to my partners at the time of my death” - doesn’t undermine formalities b/c those are determined independently of the will
(ii) If people are not specifically named in the will, there will be independent events that determine who can take under the devise
(iii) Don’t want the doctrine to provide a work-around will formalities - doctrine is trying to prevent writings or acts by testators that will only affect terms in the will, and nothing else in the world
(iv) Accepted by every jurisdiction(v) UPC - a statutory exception to the common law doctrine: see §2-513
(c)(d) UPC provisions
(i) §2-502 : holographic will –argument would be that the letter was intended as a will in itself. More difficult to prove than harmless error
1) will is holographic if material provisions are in testator’s handwriting and signed by testator.
(ii) §2-503 : harmless error– argument would be that letter intended b clear and convincing evidence to be an amendment/codicil
(iii) §2-510 —Incorporation by reference(iv) §2-512: independent significance
1) a will can dispose of property by reference to acts and events BUT acts must have independent significance; if no significance other than testamentary transfer, invalid.
(v) §2-513 : Separate Writing1) A will may refer to written statement or list to dispose of items of tangible personal
property not otherwise specifically disposed of by the will. The writing must be signed by testator and describe items to be distributed with particularity
2) does not need to be witness or handwritten; in practice only for less valuable things—no money
a) Older version req’d handwritten but no signature; new version reqs signature only3) The writing may be referred to as one to be in existence at the time of the testator’s
death; it may be prepared before or after the execution of the will; it may be altered by the testator after its preparation; and it may be a writing that has no significance apart from its effect on the dispositions made by the will.
4)(e) Cases
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(i) Simon v. Grayson, p.1841) Letter allowed to be included by reference because it was in existence at the time of
the execution and it was sufficiently identified in the will2) Will references a 3/25/33 letter but there is no letter. There is only a 7/3 letter. The 7/3
is in the same place and addressed to the same people but references different paragraphs in the will.
3) Codicil executed 11/25—letter in existence at time of codicil. Republication by codicil is an amendment to a will SO with the codicil and the republication, as if entire will executed 11/25!
(f) Policy considerations(i) Allows for greater privacy---do not have to spell out, can provide privacy from
witnesses, spouse, attorney(ii) Allows for convenience—if an estate plan is very complex, can be simpler for the
(a) Problem arises when one spouse has a secret from the other and they write their will together
(b)Section II.11 Revocation by Subsequent Instrument
(a) Will can revoke will. Whether holographic or traditional. (b) UPC provisions
(i) §2-507 —revocation by writing or act1) Subsequent will revokes previous will; the only instrument to revoke a will is a will; 2) New will should expressly state intent to revoke, but can also revoke by inconsistency
—in which case the later valid will takes precedence.3) (c)testator presumed to replace if complete disposition—rebutted only w clear and
convincing evidence4) (d)Subsequent will presumed to supplement rather than replace if subsequent will does
not make complete disposition of testator’s estate—presumption must be rebutted by clear and convincing evidence
(c) Cases(i) Gilbert v. Gilbert, p.201 [is new doc a codicil or a superseding will?]1) Pay stub acts as codicil when it did not contain an express revocation clause and only
distributed part of the residuary2) Card and pay stub with conflicting but complementary statements; court allowed all in
and tried to piece together. 3) Takeaway: unwilling to get rid of will when interpretation justified which “rest” meant
the money in the safe.
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4) Residuary clause (catchall) deals with a complete disposition=--incomplete disposition does not revoke prior will.
Section II.12 Revocation by Act(a) Generally, acts demonstrate a clear intent to revoke.
1) Hard to predict because courts will do strict and substantial compliance; harmless error does not apply to revocatory acts.
(b) UPC provisions(i) §2-507 —revocation by writing or by act1) (a)(2) by performing a revocatory act on the will, if testator performed act with intent
and for purpose of revoking will. 2) Revocatory act = burning, tearing, canceling, obliterating, or destroying the will or any
part of it. 3) Destruction act does not have to touch any words
(c) Cases(i) Kronauge v. Stocklein, p.205 [writing in margin]1) Strict compliance with cancellation2) Will was not revoked by act when testator wrote in the margins but her handwriting
did not touch any of the text of the document.3) The intent of the testator was not questioned, but she executed improperly.4) Departure from UPC. Not a holographic will b/c no signature.
(ii) Estate of Tolin, p.208 [destroying a copy]1) Will 1 left to Adair and will left to Broward instead of Adair. Court found that
revocatory act to a copy of a codicil was not sufficient to revoke by act, even though testator thought it was the original.
2) In this case, the court created a constructive trust for Adair’s benefit, but that is a somewhat rare outcome.
(iii) Estate of May, p.211 [revocation rebuttal]1) Ripped will is found. No one knows why it is ripped. 2) RULE Mutilated will carries the presumption that any mutilation is a revocation and
can be rebutted. 3) In this case, evidence rebutted by testimony that he wanted to uphold that will and that
he was slob 4) harmless error does not apply
Section II.13 Revocation by Changes in Circumstances
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(a) Dissolution of marriage is a change in circumstances that revokes a will whereas a marriage is not a change in circumstances that revokes a will
(b) UPC provisions(i) §2-803 : homicide—blocks a devise in an otherwise valid will
(ii) §2-804 : revocation by divorce—if you go through process to diver ce you mean to remove them from your will. (upc says all nonprobate transfers as well, NY does not)
1) can get around the presumption of disclaimer ex or ex-family by stating that “it is my intention this will survive”
(c) Cases(i) Estate of Spencer, p.2221) Example of antiquated marriage changing circumstances case – no longer the law2) Man remarried so his previous will became invalidated and his kids from 1st marriage
SOLSection II.14 Revival
(a) need valid w1, then valid w2 revokes w1, then later have w2 revoked. triggers revival question: does w1 spring back to life or remain revoked?
(b) Regimes(i) Common law : “automatic revival”—every will potentially able to go back to but not
actually auto(ii) Ecclesiatical : only concern is intent. Can’t say always or never revival.
(iii) Antirevival: revocation only by instrument(iv) NY does not allow revival
(c) UPC provisions(i) §2-509 —revival of revoked will1) only deals with will 1 revoked by instrument (will 2) and then that instrument revoked.
If will 1 was revoked by act, no presumptions in effect2) (a)—deals with 2nd will wholly revoking 1st will, then 2nd will revoked by act
a) presumption: will 1 remains revoked unless it is revived by rebuttal3) (b)—deals with 2nd will partially revoking 1st will, then 2nd will revoked by act
(codicil) a) presumption: partially revoked passages of will1 are revived unless a rebuttal made
that testator did not want to revive 4) (c)—deals with 3rd will that revoked 2nd will which revoked 1st will (in whole or part),
then 2nd will revoked by will 3 (by instrument)
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a) presumption: is against revival. Will 1 remains revoked to the extent that the revocation of the 2nd willshows revocation included revival. Most likely, instructions in 3rd will give info about what to reoke and what to revive. Won’t need to revive 1 b/c have terms in will3
(d) Cases(i) Estate of Boysen, p.2281) Will 1 leaves farm to sun but on condition he pays isster; will 2 leaves farm to son on
condition he pays ¼ worth of estate. Will 2 expressly revokes all prior wills. When testator finds will 1, tears up will 2—is will 1 revived?
a) Presumption is that it is not revived but there may be enough evidence to do so.b) Court orders lower court on remand to consider (1) did testator know will 1 in
existence? (2) did testator know nature or extent of property/disposition made by will 1? (3) did testator disclose intent to make disposition which earlier will directs? If all answers “yes” then revived.
(ii) Boysen aftermath 1) UPC 2-509 comments reject the Boysen questions—intend rebuttal to be more general
(a) Restatement says: (i) partial or complete revocation is presumptively ineffective if testator made revocation1) in connection with an attempt to achieve a dispositive objective that fails under
applicable law or 2) because of a false assumption of law, or because of a false belief about an objective
fact, that is either recited in the revoking instrument or established by clear and convincing evidence
(ii) the presumption established under (a) is rebutted if allowing the revocation to remain in effect would be more consistent w testator’s probable intention
(b) Gives court the power to say that the revocation is conditioned on revival of older will
(c) Applies where testator revokes will but fails to put substitute in place—question is whether revoked will 1 would serve intent better
(i) it’s a “second best” approach: lets court create an escape valve where better alternative of enforcing revoked will than intestacy
(d) Cases(i) Callahan’s Estate, p.233 [ineffective revocation]1) Testator revoked will 2 with intent to revive will 1 but dies before complete; court
enforces revoked will2—because its revocation was dependent on the revival of will 1, which never happened therefore will 2 never revoked
2) RULE: Where testator executes will 1, then revokes by execution of will 2 which fails to become effective, the revocation of will 1 is treated as relative and dependent on efficiency of will 2 which was intended to be substituted.
a) Revocation of will 1 dependent on validity of will 2, and will 2 invalid so will 1 stands.
(ii) Estate of Patten, p.236 [clear and convincing evidence burden//ineffective replacement]1) No immediate intent to replace the will destroyed therefore no DRR; DRR cannot
apply b/c too different
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2) Testator must intent that the destruction of the old will is dependent on validity of the new will—must be proved by substantial evidence of probative value
3) in this case, no evidence that revocation of will 2 depended on the validity of will1 therefore not DRR. Intestacy takes over.
a) Note: under UPC could have probated will 2. (iii) Schneider v. Harrington, p.239 [partial revocation]
1) f: testator wanted to make changes so marked up will crossing out a, a claims crossed-out provisions do not take effect
2) court wants to accept cross-outs as partial revocation – but filling in new info doesn’t meet formalities, so will standards as originally drawn
3) cancellations only effective if substitutions valid, which they are not4) also no residuary clause – this would result in partial intestacy
a) fiction of conditional intent closest to reality in this type of caseSection II.16 Lapse and Anti-lapse Statutes
(a) Lawyers may and possibly msut reach out to their clients to inform them of laws or circumstances changing the distribution of their estates. This is a pretty significant loophole to gen’l PR rule against solicitation.
(b) Types of devises(i) Specific : a testamentary disposition of a specifically identified asset (e.g. “family farm”
or “diamond ring”(ii) General : a testamentary disposition, usually of a specified amount of money or quantity
of property, that is payable from general assets o the estate(iii) Residuary : a testamentary disposition of property of testator’s net probate estate not
disposed y a specific, general, or demonstrative devise (aka leftovers)(c) Types of changes
(i) Ademption: specific devise “adeemed” (aka rendered ineffective) if testator no longer owns the specifically devised property at death—you cannot give away something you don’t own
(ii) Abatement: when testator dies and estate does not include enough assets to pay for all the devises—all devises except specific devises are reduced. All other devises reduced.
(iii) Accessions/Accretions : when estate of class of takers grows after testator writes will; can have enlargement of specific devise (e.g. stock splits, specific devisees gets benefits of the extra shares)
(iv) Set-off/satisfaction: similar to concept of advancement in intestacy. Provision in will providing devise to indiv was given during the life of the testator.
1) There must be a written expression of intent to satisfy devise by interv vivos gift(v) Lapse :
1) When beneficiary dies between execution and probate—dead people can’t own property so have to figure out what to do with their devise
2) Makes for a lot of complexity – you can end up having partially intestate estates, and it can also defeat testators’ intention. Think about who the takers would be – children, grandchildren, e.g. We would think, and the drafters of the UPC though, that the testator would prefer to have their predeceased takers’ descendants take than for it to go through intestacy.
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3) Antilapse statutes started to come into force to correct the harshness of the common law rule of lapse.
4) Typically, courts will look for general intent; residuary; then to intestacy(d) Advent of anti-lapse statutes
(i) Remedial in nature. Tends to preserve equality of treatment among different lines of succession.
(ii) Beneficiary Must survive testator by 120 hours(iii) Intestacy is last resort—try to save from that.(iv) Will allow predeceased’s descendants to take by representation(v) If there is language providing for a back-up, that alternative devise trumps the antilapse
provision.(e) UPC provisions
(i) §2-601 -scope. In absence of a finding of a contrary intention, rules of construction in this part control the construction of a will.
1) Policy: testator probable would have made had he thought about it/produces result closest to testator’s probable intention; applies to relatives of testator
(ii) §2-603 -Antilapse Statute1) These don’t prevent lapse – it’s still not possible to give property to dead people. 2) (b): What kind of takers will the antilapse apply to?
a) Grandparent, a descendant of a grandparent, or a stepchild of either the testator or the donor of a power of appointment.
b) “Holder of a power of appointment” is someone who gets not actual property, but the right to devise property (sometimes they may devise to themselves, sometimes they must give it to others).
c) NB: The antilapse statute does not apply to create a substitute gift for a spouse. Why?
i) Part of the rationale behind the antilapse statute is that people aren’t thinking through the possibility of predeceasing descendants. So spouses aren’t included because they likely either (a) draft their wills together, or (b) be contemplating that one of them will predecease the other. If it were to apply to spouses, it could defeat
ii) If we put in place a substitute gift to the descendants of a surviving spouse, then property could go to unshared descendants of a spouse – this could possibly defeat donative intent.
3) UPC Anti-lapse [2-603(b)(1)] a) T $40K to A, residue to B. A and B are T’s children.
i) A predeceases leaving child (A, Jr.), $40K goes to A, Jr.ii) A and B predeceases, only B with surviving descendants. Residue goes to B’s
descendants. iii) Idea: because A and B are testator’s children, the statute assumes that rather than
having all of the assets go through intestacy that the testator would rather have a substitute gift go to his or her own descendants.
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b) T $40K to A, residue to B and C. A, B and C are T’s children.i) A and B predecease, only B with surviving descendants. Under the anti-lapse rule,
B’s portion of the residue goes to B’s surviving descendants. 4) UPC Class Gifts [2-603(b)(2)]
a) T my boat, the Jupiter, to my grandchildren. (T has grandchildren: F, G, H, & I. G predeceases, leaving child K).
i) Common law: Upon G’s lapse, the Jupiter is shared by: F, H, and I. ii) UPC Anti-lapse: Upon G’s lapse, the Jupiter is shared by F, H, I, and K.
a. BUT: Multi-generational classes get no substitute gifts. 5)
(f) Cases(i) Ruotolo v. Tietjen, p.2801) Antilapse statute enacted to prevent operation of lapse and unintended disinheritance.
Statute is remedial and receive liberal construction. Any doubts recolved in favor of its operation.
2) Therefore, works of survivorship such as “if she survives me” alone do not constitute a provision in the will for the contingency of the death of a bene and are insufficient to negate operation of antilapse statute.
3) As a result, devise to dead relative does not lapse, but instead descends to her issue.Section II.17 Will Substitutes: Creation, Revocation, and Subsidiary Law of Wills
(a) Types of substitutes(i) Probate v. non probate discussion, generally.1) Non-probate assets transferred at moment of decedent’s death without assistance of
the courts (like contract)-these forms also described as will substitutes; perfect will subs also preserve power of further decedent to change distribution until death
2) Consider, to what extent do these will subs get treated like will and to what extent are they governed by their own rules
(ii) Joint accounts : bank, brokerage, retirement, pension, etc. (need to look at specifics b/c vary by state and institution)
(iii) Life insurance : transfers at death, holder has right to change bene, still 3rdP to administer and give parameters
(iv) Revocable trusts : exact service of wills. Settlor is one w assets and plans estate, upon death remainder goes to whoever.
(v) Common law joint tenancy : imperfect will sub. At least 2 owners are co-owners and have rights of survivorship; once joint tenancy created cannot rescind. Can get rid of right of survivorship but cannot take back their share.
(b) Analysis approach: I know rule for x with wills, what about with non-probate? (e.g. revocation, creation, etc.)
(c) UPC provisions
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(i) §2-804 —revocation of probate and nonprobate transfers by divorce; no revocation by other changes in circumstances
(ii) UTC §602 —revocation or amendment of revocable trust1) Sets up presumption that trsuts are revocable UNLESS settlor expressly states the trsut
is irrevocable.(iii) §2-603 --Antilapse(iv) §2-706 —Life insurance; Retirement Plan; Account w POD Designation; Transfer-on-
Death Registration; Deceased Bene1) attempts to provide best practice for intermediaries; encourages legislatures to adopt
this protection for contractual alternatives akin to antilapse(v) §2-707 —Survivorship with Respect to Future Interests under Terms of Trust; Sub
Takers1) provides for antilapse protection similar to wills in revocable trsuts;
(d) Cases(i) Mathias v. Fantine, p.290 [revocable trusts] and Farkas v. Williams, p.291 [revocable
trusts]1)2) Revocable self-declared trust and revocable 3rdP trust. There must be a present
transfer for a revocable trust to be created. Have to be valid as an inter vivos trsansfer or not valid
a) Revocable trusts do not meet formalities of wills 3) Mathias court said: idea of present transfer illusory b/c no present trust without present
transfer. 4) Farkas court said: inter vivos transfer valid when written. b/c transfer is the remainder
not the life estate. Bene did not have power to manage asset until after Settlor’s death 5) Takeaway: Today, universally, these types of trusts are valid inter vivos trusts
(ii) Estate and Trust of Pilafas, p.305 [trust revocation]1) Will and trust executed together; in order to revoke trust had to deliver in writing an
amendment or revocation to trustee, no such delivery occurred but cannot find the trust.
2) With will, when last known location in testator’s possession nand cannot be found, considered revoked (unless rebutted)—SAME FOR TRUSTS
(iii) Metlife v. Johnson, p.311 [GE life insurance case]1) Substantial compliance2) Johnson wants to change life insurance policy beneficiary from ex wife to illegitimate
kids. Johnson fills out the form wrong: Checks box for the policy he thinks he has but it is not the right one; says separated from wife even though actually divorce; listed mother’s address instead of own
3) Met Life says: when you check the wrong box, it goes to the wrong people Mildred the beneficiary, but Johnson had changed it. GE acknowledged receipt of beneficiary change but not actually reflected in records. Met Life never told him the change form was invalid
4) Things in this case:
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a) What will be sufficient to make a beneficiary changeb) Choice of law question first: state or fed law? Preemption question.c) b/c life insurance is benefit policy relevant to ERISA but does not actually address
benefitd) no choice to follow whatever state law is but must follow fed common law. e) Phoenix case rule: substantial compliance. Intent articulated + attempt to undertake
change by taking similar positive action5) How substantial does compliance need to be? positive action v. similar positive action.
a) Test applied here is substantial compliance, even though the state rule is strict compliance. b/c employee benefit discussed.
6) The new beneficiaries get the life insurance policy7) I know what the rule is for wills, what about will substitutes?
a) Complicated by this case. In contractual will substitutes, can know what the rule is for wills or even on that type of contract but may not be the rule if this particular contractual will substitute implicates ERISA –difference btn employee benefit v. set up on own, different rules accordingly
8) Revocation by divorce statutes generally apply to wills. Do revocation by divorce statutes talking about wills carry over to will substitutes?
a) The policy definitely overlaps. 2-804, addresses “any governing instrument”: all wills and will substitutes HOWEVER w/ life insurance policies, difficult to adopt b/c whole selling point I efficiency and quick payouts and divorce complicates ability for co to follow promise
(iv) Clymer v. Mayo, p.316 [pour over trusts]1) Clymer executed will and created pour-over trust at once, but put nothing in the pour
over trust, would receive funds when will disbursed. 2) Rule: will invalidates lifetime trust to busband. Pour over trust works as a will in
functions, but court only applies holding to revocable pour over trusts funded entirely at time of decedent’s death—does not apply to revocable trusts funded at inception
(e) Powers of attorney(i) Options for when clients who lose capacity/ cannot make own decisions1) Regular power of attorney: give to friend if you can’t be there on a certain date—
power to sign for your2) Durable power of attorney: allows person to continue to act on your behalf even if you
lose capacity to do so—can sign until atty hears of death; must check w banks to see if they have their own durable power of atty forms
3) Custodial trust: set aside money to take care of principle4) Long term health care insurance: provides funds to pay for health care expenses.
Sometimes can be coordinated to fund/re-up a custodial trust and can be disbursed by durable power of atty, but depends on policy
(f) Policy considerations(i) If we know trusts are valid, why do we care?1) Creditors. Revocable trust going to transfer to 3rdP who is not subj to creditor’s reach.
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2) RULE: even though trust is revocable, creditors cannot reach underlying property in a trust UNLESS trust was set up to defeat those creditors. (aka cannot create a trust once you know the creditor is looming)
(i) elective share / force share: right granted to surviving spouse by § giving right to take share of predeceasing spouse’s property regardless of what will says
(ii) ‘forced’: predeceasing spouse forced to give surviving spouse this share(iii) ‘elective’: surviving spouse doesn’t have to take
1) rationale: they’ve gone through marriage together, so surviving spouse really has some kind of entitlement to some assets
(b) partnership theory of marriage: in it together in acquiring assets(c) community property: all property that either party to marriage earns during term
of marriage is property of both spouses [elective share unnecessary here](i) separate property states support the community property rational through elective share
(ii) conventional elective share: gives set fraction of decedent’s property [generally 1/3] also provides for minimum – larger of either 50k or 1/3rd
(iii) problem: late in life marriages where you’re still entitled to 1/3rd despite lateness of marriage
(d) UPC provisions(i) §2-202 —sliding scale1) sliding scale based on number of years marries reaches % of augmented estate
a) longer you’re in marriage = greater likelihood that assets sharedb) to protect need, supplemental amount [less than one year] = 50kc) once you reach 15 years, surviving spouse entitled to 50% of marriage assetsd) determined by total length of marriage – includes previous marriages to same person
(ii) §2-203 —augmented estate1) number representing assets of both spouses, brings in both probate and non-probate
assets, plus surviving spouse’s assets2) trying to get at same figure as community property states3) brings in: net probate estate, decedent’s non-probate transfers to others, and surviving
spouse’s property / non-probate transfers to others(iii) §2-204 : decedent’s net probate estate: everything in decedent’s name at death
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(iv) §2-205 : decedent’s non-probate transfers to other than surviving spouse1) including property-based will substitutes [revocable trust], contractually based will
substitutes – as long as they provide for someone else(v) §2-206 : decedent’s non-probate transfers to surviving spouse
1) Don’t want to benefit spouse too much if she’s getting by non-probate already(vi) §2-207: surviving spouse’s property – anything owned at decedent’s death / controlled
through non-probate transfers(vii) § 2-209 : composing elective share amount
1) Reduce by amount that would go to surviving spouse anyway2) Then take account of assets surviving spouse already owns3) So: reduce elective share by amount of surviving spouse’s own assets at special rate
[elective share % X 2](e) Three outcomes
(i) 1. Perfect equilibrium – surviving spouse taken care of just to degree elective share requires
(ii) 2. Gap – estate will write check, all other beneficiaries take equal hit(iii) 3. Surviving spouse has more – cannot elect
(f) Non-probate assets(i) upc draws non-probate assets into augmented estate – but under conventional elective
share, common law doctrines used to avoid fraud(ii) fraudulent intent test: strikes down transfers of assets into will substitutes if surviving
spouse can prove that transfer made w/ intent to defraud(iii) illusory transfer: where transferor retains control before and after death
1) newman: where no retained life interest / power to revoke as well as power of trustees – does not qualify as trust at all
2) [no longer good law in ny]
(g) Policy considerationsSection II.19 Protecting Other Family Members
(a) Pre-nups(i) Some states do K law
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(b) Pretermitted Children Statutes(i) Omitted children from will b/c born after will—by mistake. Provide for child to take
when not included in will.(ii) In NY 2 options for unintentional: no children living or a child living but not the one
named in the will.(c) UPC provisions
(i) §2-302 —Omitted Children1) If omitted child provided for in nonprobate transfers, then not entitled to pretermitted
statute 2) (a) takes intestacy share, which may be 0 if other parent takes all under will. 3) If nothing provided for living children, then nothing for laterborn child.
(d) Cases(i) Azcunce v. Estate of Azcunce, p.3861) Testator republishes a will and usually not thinking about all the shit at once2) Will executed before P born; codicil addressing one thing but not her inclusion in will
executed after her birth—entire will treated as republished and excluded her.3) Does UPC help her?
a) No, b/c she is still not omitted childb) Only can help you if in category of omitted child—c) Only way for court to help her would be to invalidate the codicild) Privity issue if patricia sued, would have to be estate but then estate has interest in
not giving to her4) Could they ignore republication?
a) Court says no. b) textbook says yes: extrinsic evidence of intent should be considered
i) simon v grayson (inc by ref)ii) repub by condicil is about intent
iii) uniformly reviled for its decision but disagreement over whether court’s hands were tied or not
5)
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Article III. TRUSTSSection III.01 Private Trusts and their elements
(a) Types of trusts: (i) Modern 3rdP trust : D to T in trust for D for life, then in trust for D’s children 1) T= trustee, T’s interest = legal fee simple; D=bene; d’s interest=equitable life estate;
D’s kids=benes(ii) Self-declared trust : D to D in trust for D and then for D’s children.
(iii) Honorary trust : statutory exception to definite bene rule for certain types of trust where will not disrupt anything (searight)
(b) Elements of a trust (i) Intent—must be specific
(ii) Res/corpus (assets)(iii) Trustee(iv) At least 1 bene, who is not the trustee
(c) Cases(i) Brainard, p.403 [corpus/res]1) Dude created trust on conjecture of market. 2) RULE: Property must be identifiable. Before trust created. If money not earned yet
cannot put it into trust.3) Policy: res is cautionary function; too easy otherwise
(ii) Farmers Loan and Trust v. Winthrop, p.421 [intent]1) RULE: There must be an express intent to create a trust
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i) Even if intent is clear, it must be expressed clearly in the language.2) Magic words: “the right, title, and interest of the grantor in the securities and other
property due or to become due from US trust co as trustee under the will”3) NB: today court could have created a constructive trust to prevent unjust enrichment
(although not strong case b/c no fraud)(iii) Colton v. Colton, p.425
1) Everything to wife in will then recommended care and protection to sister and mother. Wife take with obligation or without obligation?
a) Court says trust created based on circumstances of settlor dying(d) UTC
(i) §401 —Methods for Creating a Trust; Trust may be created by1) Transfer of property to another person as trustee during settlor’s lifetime or by will or
other disposition taking effect upon settlor’s death;2) Declaration by owner of property that owner holds identifiable prop as trustee; OR3) Exercise of a power of appointment in favor of a trustee
(ii) §402 —Requirements for Creation; Trust created ONLY if1) Settlor has capacity to create a trust;2) Settlor indicates an intention to create the trust;3) Trust has definite bene or is
a) A charitable trust;b) Trust for the care of an animal §408; ORc) Trust for noncharitable purpose, §409
4) Trustee has duties to perform; AND5) Same person is not the sole trustee and sole bene6) (b) Bene if definite if can be ascertained now or in the future, subject to any applicable
RAP7) (c) Power in trustee to select a bene from an indefinite class is valid. If power is
exercised within/ a reasonable time, power fails and property subject to power passes to person who would have taken prop had the power not been conferred
(iii) §404 —Trust Purposes1) Trust may be created only to the extent its purposes are lawful, not contrary to public
policy, and possible to achieve. A trust and its terms must be for the benefit of its benes.
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Section III.02 Parties to Trusts(a) Generally
(i) Settlor can be trustee (self-declared trust)(ii) Settlor can be bene, but cannot be the only bene
(iii) Requirements1) Need to be definite bene.2) Often problems with indefinite benes, unborn benes, honorary trust for benes that
cannot enforce trusts (petS)(b) Bene classes
(i) Definite Beneficiari es: Alive and can be identified1) S gives 1M to T in trsut for D2) S gives 1M to T in trust for D’s first born child (D alive but childness)3) S gives 1M to T in trust for D’s kids (D alive but childless)
(ii) Unborn/unascertained beneficiaries 1) A bene will be definite if ascertained now; in the futute in complainace w rule against
perpetuitiesa) If language of trust is: S to T in trsut for D’s first born child, and D is alive but has
no child, then you have an unborn/unascertained bene BUT will be born within RAP so ok
(iii) Indefinite Beneficiary 1) Income to A for life, remainder in corpus to G’s friends2) Income to A for life, remainderi n corpus to G’s friend as A shall select
a) A has power of appointment, if A exercise power has to figure out who G’s friends are
3) Income to A for life, remainder in corpus to G’s friends as A shall selecta) Can’t mandate trustee service
4) mandatory v. discretionary power of appointment, important because of different tests for validity
a) if holder of power is trustee: mandatory in that terms obligate trustee to exercise power by virtue of being trustee
i) test: need to be able to identify all potential members of class to judge if trustees choice is in keeping w/ fiduciary obligations [strict]
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b) if holder not trustee: discretionaryi) test: courts need to be able to identify at least one member of class [lenient]
5)(c) Cases
(i) Adams v. Adams, p.426 [defective delivery; transfer of equitable title]1) Trustee tried to pretend didn’t know he was trustee to invalidate trust. 2) Court said: trustee does not have to consent in order to a trust to be valid; court will
appoint a new trustee. Unjust enrichment issue int his case—may not be as easy in the future.
(ii) Searight: trsut vests trustee w discretionary power of appt w right to decide whether to provide for dog.
(d) UTC Provisions(i) §402 —Requirements for Creation; Trust created ONLY if1) Settlor has capacity to create a trust;2) Settlor indicates an intention to create the trust;3) Trust has definite bene or is
a) A charitable trust;b) Trust for the care of an animal §408; ORc) Trust for noncharitable purpose, §409
4) Trustee has duties to perform; AND5) Same person is not the sole trustee and sole bene6) (b) Bene if definite if can be ascertained now or in the future, subject to any applicable
RAP7) (c) Power in trustee to select a bene from an indefinite class is valid. If power is
exercised within/ a reasonable time, power fails and property subject to power passes to person who would have taken prop had the power not been conferred
Section III.03 Trustee Duties(a) Generally
(i) Duty to inform and account1) Keep books so benes know what’s going on
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(ii) Duty of Loyalty 1) Most exacting requirement. Loyal to interests of the bene. Cannot self-deal even if
terms are beter or fairere than arms length. Settlor can limit duty and bring back down to corp standards.
(iii) Duty of Prudence 1) Akin to the duty of care. Obligation to actin the way a prudent person would act with
respect to own transactions with investment decisions etc (iv) Duty of Impartiality
1) Trustee cannot favor one bene or set of benes over another. Must treat all benes equally
(b) Cases(i) Denns v. RI Hospital Trust, p.473 [duty of impartiality]1) Trustee cannot favor life tenants over remaindermen2) Here, trustee sold building for less than it was worth at time of the creation of trust;
therefore he was personally liable for the damanes3) the damages were the prince then-price now.
(c) UTC provisions(i) §802 —Duty of Loyalty1) Trustee shall administer trust solely in interests of bene; provides for all sorts of
possible conflicts.(ii) §803 --Impartiality
1) if a trust has two or more benes, the trustee shall act impartially in investing, managing, and distributing the trust property, giving due regard to the bene respective interests
(iii) §804 —Prudent Administration1) trustee shall administer the trust as a prudent person would, by considering the
purposes, terms, distributional requirements, and other circumstances of the trust. Trustee shall exercise reasonable care, skill, and caution
Section III.04 Beneficiary Rights on a Trust(a) Types of trust
(i) Discretionary Trust : trustee has discretion to decide what amounts be paid—can be completely open from income or principle ro can be limited
1) Attractive because do not have to make hard decisions up front; trustee can ask for more or less money based on amount of discretion
2) Court cannot compel trustee to pay creditors(ii) Support Trust : trustee must give at least $x to beneficiaries for support, every day
needs, and education etc.
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1) Only if no statement of discretion?2) Benes can compel greater distributions if standard not being met3) Station of life idea: whatever level of living was before settlor’s death, continues after
death(iii) Spendthrift Trust : provision imposes restraint on alienation of equitable interest,
nullifies any attempt to assign interest and ant attempted attachment of bene’s interest by bene creditors
1) If discretionary trust includes ST clause, do not have to worry about support clause; benes cannot break trust
2) NY makes ST protection default for trsuts allowing bene to only receive income (b) UTC
(i) Any trust that gives trustee discretion (whether or not for support) only subject oreview if an alleged abuse of discretion
(ii) §502 : ST provision only enforceable if it bars both voluntary and involuntary transfers of bene interest
1) donor trying to protect ST need to protect them from themselves also allows for equal treatment between creditors
(c) Cases(i) Broadway National Bank v. Adams, p.497 [ST clause]1) Enforceable against creditors when free from interference/becontrol of beneficiary’s
creditor’s2) Policy: settlor can dispose of trsut as he wishes; intent should be carried ut unless
against public policy but onus on creditors to do due diligence before lending(ii) Hurley v. Hurley, p.506. [preferred creditors-EXCEPTION]
1) Example of public policy exception to ST2) Not enforced re: child support—special type of debt
(iii) Sligh v. First National Bank, p.510 [tort creditors-EXCEPTION]1) Tort creditors for intentional/gross negligence claims able to reach trustee2) Policy:
a) someone is going to become pauper – either trust beneficiary or tort victim, and victim has already suffered enough
b) no opportunity to check up on s’s backgroundc) trust as set up supports negligent behavior: evidence that m knew of this and may
have tried to protect income from this situation3)
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(d) Policy considerations(i) For: 1) tax base: will encourage people to go out of state2) donative intent: undermines function of trust3) creditors better to bear risk since they can do their homework4) people will just turn to other methods less reachable by creditors
(ii) Against: 1) efficiency: creditors will be able to get $ anyway, no reason to let this legal obstacle
get in the way2) drives up cost of credit: research / enforcement3) encourages spinelessness: allows people to be their worst selves, encourages
aristocracy4) differential treatment between inherited and earned wealth
(iii)Section III.05 Trust Restraints on Alienability
(a) Self-settled spendthrift trusts(i) Traditionally, ST trusts are unenforceable when settlor is bene b/c no reason to allow
someone to protect their own assets (ii) Off Shore Asset protection trust (APT)
1) Irrevocable trust settled in anti-creditor jurisdiction, settlor chooses that locale and US courts lack personal jdx
2) Protector :a) Careful about rights given to protector to keep in place delicate balance of settlor’s
worries of empowering protector with discretion and protecting assetsb) Auth to appoint new trustee. Best practice if settlor is not protector
3) Trustee in foreign jdx a) Natural person. b) Settlor should not be co-trustee b/c then no personal jurisdiction barc) Sometimes will be co-trustee and will insert provision that automatically terminates
settlor as trustee if any claim made against trust by a creditor.
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4) Duress clause: a) Trustee directed to ignore any directions received from settlor or protector under
duressb) Linked to auto-termination. Triggered by a settlor or protector who is under duress
(aka court order directing compliance)5) Flight provision
a) Trustee auth’d to change site of trust if claim against trust threatens to be successful b) Virtually guarantees offshore APT will never be subject to creditor’s claims
(b) Cases(i) FTC v. Affordable Media—order of contempt against settlor as protector. Settlor could
have tried to resigned but would bely his complicity in trying to hide his money.(ii) In re Lawrence—lawrence sent to jail for not sharing assets after 6 years and no sign he
would change mind, civil contempt no longer valid compliance measure so judge required his release
(c) UTC Provisions(i) §501 —Rights of Beneficiary’s Creditor or Assignee1) to the extent a beneficiary’s interest is not subject to a ST provision, court may auth a
creditor or assignee of the bene to reach the bene’s interest by attachment of present or future distribution to or for the bene of the be or other means court may limit the award to such relief as is appropriate under the circ
(ii) §502 —Spendthrift Provision1) (a) ST provision valid only if it restrains both voluntary and involuntary transfer of a
bene interest2) (b) A term of trust providing that the interest of a bene is held subject to a “ST Trust”
or words of similar import is sufficient to restrain both voluntary AND involuntary transfer of bene’s interest.
3) (c) Bene may not transfer an interest in a trust in violation of a valid spendthrift provision and except as otherwise provided, a creditor or assignee of the bene may not reach the interest or a distribution by trustee before its receipt by the bene
(iii) §503 —Exceptions to Spendthrift Provision1) (a) “child” includes any person for whom an order or judgment for child support has
been entered in this or another state2) (b) a ST provision is unenforceable against
a) (1) a bene child, spouse, or former spouse who has a judgment or court order against the bene for support or maintenance
b) (2) a judgment creditor who has provided services for the protection of a bene’s interet in the trust
c) (3) a claim of this state or US to the extent a statute of this state or federal law so provides
Section III.06 Trust Termination and Modification(a) Who has power—settlor or beneficiary?
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(b) Reasons(i) Unforeseen circumstances
(c) Cases(i) Claflin v. Claflin, p.524 [termination w consent; no violation of material purpose]1) No termination of trust when all benes did not consent 2) Plaintiff tried to say that the trsut was in violation of the material purpose of the settlor
by postponing enjoyment of trust—court did not buy it.(ii) Petition of Wolcott, p.533 [modification]
1) Ok to allow invasion of principal to a limited degree because primary purpose of trust was to protect widow and living benes all agreed to it however cannot have a straight up mod w consent b/c there are unborn issue who have to be considered.
2) If trust provided for trustee’s discretionary power to deviate in certain circumstances, would avoid this problem.
(d) UTC Provisions(i) UTC §411 —Modification or Termination of Noncharitable Irrevocable Trust by
Consent1) (a) may be modified or terminated upon consent of settlor + all benes2) (b) may terminate upon consent of all benes if court concludes continuance is not
necessary to achieve any material purpose of the trust; may be modified upon consent of all benes if court concludes mod is not inconsistent w material purpose of the trust
3) retains consent/material purpose requirement 4) (c) ST provision alone does not presume material purpose 5) (d) upon termination, trustee shall distribute trust property as agreed by benes 6) (e) if not all the benes consent to mod or termination—can be approved by court IF
a) (1) all benes had consented the trust could have been modified or terminated AND (2) interests of bene who does not consent will be adequately protected
(ii) UTC §412 —Modification or Termination Because of Unanticipated Circumstances or Inabilty to Administer Trust Effectively
1) (a) The court may modify the administrative or dispositive terms of a trust or terminate the trust if, because of circumstances not anticipated by the settlor, modification or termination will further the purposes of the trust. To the extent practicable, the modification must be made in accordance with the settlor's probable intention.
2) [only for admin deviation] (b) The court may modify the administrative terms of a trust if continuation of the trust on its existing terms would be impracticable or wasteful or impair the trust's administration.
3) (c) Upon termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.
Section III.07 Charitable Trusts(a) Requirements
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(i) res(ii) intent
(iii) trustee: absent trustee can be reappointed (b) Unique to charitable trusts
(i) Beneficiaries: do not have to be names; instead should be an indefinite class(ii) Charitable purpose
1) Advancement of education2) Relief of poverty3) Advancement of education4) Promotion of health5) Promotion of government/municipal6) Other purposes beneficial to community
(c) Cases(i) Bob Jones Univ: 1) Engaged in education AND also racially discriminatory admission practices.
Exemption status revoked on basis of viol of 14thA. Not charitable. Contravening public policy
2) Education is not enough. Additionally cannot contravene public policy.(ii) Shenandoah Valley National Bank v. Taylor, p.554
1) Court refused to modify trust because did not meet charitable purpose and was in violation of RAP
a) question about charitable –b/c if not actually charity then against the rule against perpetuities
b) intestacy next of kin challenges as violating RAP and then would get money c) advancement of education: while the language states the money should be spent “in
furtherance of his obtainment of education” after out of the hands of the trustee no enforcement mechanism
d) relief for the poor: no proof of impoverishment and not a poor town. No financial needs testing set up in trust
e) other purposes for benefit of community: benevolence trust is not enough for a charitable
Section III.08 Cy Pres
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(a) Doctrine(i) After determining that specific charitable intent was no longer possible to be fulfilled,
then court has reformation power in line with charitable ends(ii) Distributive deviation
(b) Cases(i) Polio hypo: charitable trusts created to develop cur for polio, once the vaccine was
invested the trusts became obsolete so money could be used for other medical research (ii) Estate of Buck, p.561
1) Court did not grant cy pres when SF Foundation (trustee) moved to extend scope of grant; cited the donative intent
2) New trustee named instead(iii) Barnes Foundation
1) Court followed deviation doctrine to allow for a new building to save the paintings2)
(c) UTC provisions(i) §405 —Charitable Purposes; Enforcement1) (a) a charitable trust may be created for the relief of poverty, the advancement of
education or religion, the promotion of health, governmental or municipal purposes, or other purposes the achievement of which is beneficial to the community
2) (b) if the terms of a charitable trust do not indicate a particular charitable purposes or bene, court may select one or more charitable purposes or benes. selection must be consistent with settlor’s intention.
3) (c) settlor of a charitable trsut , among others, may maintain a proceeding to enforce the trust. [does this mean under UPC other interested parties and AG cannot?]
(ii) §413 —Cy Pres1) (a)Except as otherwise provided in (b), if particular charitable purpose becomes
unlawful, impracticable, impossible to achieve, or wasteful: a) (1) trust does not fail, in or whole in part; b) (2) trust property does not revert to settlor or settlor’s successors in interest; and c) (3) court may apply cy pres to modify or terminate the trust by directing that the trust
property be applied or distributed, in whole or in part, in a manner consistent w charitable purposes of the trust
2) (b) A provision in the terms of a charitable trust that would result in distribution of the trust property to a noncharitable beneficiary prevails over the power of the court under sub (a) to apply cy pres to modify or terminate ONLY IF
a) (1) trust property tis to revert to settlor and the settlor is still living OR b) (2) fewer than 21 years have elapsed since date of trust’s creation.
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Section III.09 Enforcing Charitable Trust Obligations(a) AG, trustees, and others with a “special interest” can enforce duties but hard to get
special interest status(i) To be special interest status: must be more than someone who cares about what the
charity does—has to be entitled to take assets if trust fails.(b) Cases
(i) Smithers, p.575 [standing expanded to allow enforcement]1) Settlor sets up charitable trust to set up an alcohol treatment center. Gave so much $,
set up restrictions so the money could only be for the rehab center2) Important for charities, even when offered transformational gifts to think really
carefully about how they will use that money3) Administratrix v hospital—disagreement over whether the charge was treatment of
alcoholism or alcoholism in the setting of the stand alone building4) AG position: first AG didn’t back Smithers and found that the hospital should sell the
building b/c there was no written acknowledgement of the stand alone out patienta) Incentive to bring in AG or informally settling disputes: Donor can get redress and
charity can keep name away from bad press; value of confidentiality. Very little case law. Lots of confidential settlement agreements
5) In this case, Smithers didn’t want to solve confidentially—sought to enjoin hospital from selling the building and court enforce gift restrictions
6) Question: is there standing?a) Mrs. Smithers, as administratix of donor—can sueb) [another case says no—far from settled in NY—under UTC once settor is dead no
more standing]7) Who has better argument? Should they be allowed?
a) Depends on remedy: if break of trust is a remedy, then would have to worry about conflict. If remedy is specific performance then less worry.
b) Proposed solution: standing when can show AG has not prosecuted—problem with this approach: can’t figure out systematic flags would show ag inaction sufficient to
c) Possibility: gift-over where you say I gift to st lukes provided xyz but if they don’t then betty ford will take the money –self-enforcement mechanism but not the most effective many times 2ndary does not value
8) Can you manufacture your own standing by K? a) While they’re alive v. dead standardb) Beneficiaries of charity do not have standing
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