Review

Intestate?

Full to spouse if all desc are desc of the surviving spouse and no living parents (102)

Share of heirs other than surviving spouse (kids, no kids parents, no parents to desc of
parents by rep, no surviving desc of parents/kids to grandparents, or desc of
grandparents) look at (5) and (B)

Representation 2-106 (look)

No Taker

Survival requirement of 120 hours, if not deemed to predeceased dec

Half blood – treated as whole blood for inheritance

Afterborn heirs – relatives conceived before death inherit as if born while decedent was
living

Advancements – gave during lifetime treat as advancement only if declared in writing or
heir acknowledged in writing OR decedent’s writing or heir’s acknowledgement
indicates the gift

Debts to Dec. – debt owed to d is not charged against intestate share of any ind. Except the
debtor. If Debtor fails to survive the dec. the debt is not taken into account.

Adopted child treated as child, doesn’t receive inheritance of natural born parent unless the
adopting parent is related to natural born parent

Elective share right of election by surviving spouse to 50 percent value of marital property
portion
Supplemental amount, must get at least 75,000

Marital property portion, alternative a by years

Net probate estate, value of augmented estate = value of decedent’s probate estate – funeral and
administration expenses – homestead allowance – family allowances – exempt property –
enforceable claims

Nonprobate transfers to others – property owned immediately before death passed outside probate
– property over which dec alone held presently exercisable power of apoinment, fractional
interest JT, POD, TOD, insurance,
Property during marriage – any irrevocable ransfer,

Nonprobate transfers to the surviving spouse – fractional interest of JT to extent decedent’s
fractional interest passed to surviving spouse as surviving JT; co-owned accounts w/right of
survivorship,

Exclusions, valuation and overlapping application
(a) exclusions) value of any property excluded from nonprobate transfers to tohers

spouse and children unprovided for in wills
1. entitlement of spouse (premarital will) - if W married T after will, W entitled to no
less than the value of the estate intestate that neither is given to child of T or born after
T married W and who is not a child of W nor UNLESS (1) it appears it was made in
contemplation of T’s marriage to W (2) it expressly shows intent to be effective
notwithstanding marriage (3) T provided for S by transfer outside will in lieu of
provision shown by statements or inferred)
2. omitted children if T fails to provide for kids born or adopted after will = to intestate, if
one or more living

exempt property and allowances –
1. homestead allowance surv spouse entitled to 22,500 if no surviving spouse each minor child
entitled to that amount. Exempt from ALL claims against estate
a. in addition to any share passing to kids by will OR elective share
2. EXEMPT PROPERTY 15,000 to surviving spouse property personal car, etc.
3. FAMILY ALLOWANCE – support allowance for children dec obligated to support not > 1 year
during administration not exceeding 27,000


WITNESSED OR NOTORIZED WILLS:
HOLOGRAPHIC WILLS – VALID whether witnessed or not if signature and material portions are in
testator’s handwriting

EXTRINSIC EVIDENCE – intent that doc be T’s will can be est by extrinsic evidence incl for
holographic wills, portions that are not in handwriting

HARMLESS ERROR even if doc or writing was not complied it treat as if in compliance if establish by
clear and convincing evidence that dec intended doc or writing to constitue (1) will
(2) partial/complete revocation (3) addition/alteration (4) partial/complete revival

Incorporation by reference

REVOCATION BY WRITING OR BY ACT – subsequent will that revokes previous or part expressly or
by inconsistency OR by act on the will with intent and purpose of revoking the will or part of


REVOCATION BY CHANGE OF CIRCUMSTANCES DOES NOT EXCEPT 803-804

REVIVAL OF REVOKED WILL
Surbsequent will that wholly revoked previous will is thereby revoked by an act the
previous will remains revoked unless revived. Revived if it is evident from circumstances of
revocation o the subsequent will or from T’s contemporary or subsequent declarations the
testator intended previous will to take effect

Partially revoked by act? Revoked part is revived unless circumstances evidence T didn’t
intend

Subsequent will that revoked? Previous will remains revoked unless revoked part is revived,
revied to the extent it appears from terms of the later will that T intended previous to take
effect


INCORPORATION BY REFERENCE – writing in existence when a will is executed may be inc by ref (1)
if language manifests this intent and (2) describes the writing sufficiently to permit its
identification
‘
contracts to make a will – Yes but must be written (not oral) two preferences: either IN the will or
specifically references the K using extrinsic evidence

Elements of a valid will

(1) Testamentary capacity
a. 18 years of age
b. of sound mind

(2) [by law, but not in UPC] testamentary intent (see Sect. 1-103) – to devise property or that
doc. be a will

(3) Formalities
a. Witnessed will (IN WRITING, SIGNED, NOTARIZED)
i. Witness has to be in the conscious presence of the testator within a
reasonable time OR the will has to be acknowledged that the testator wants
witness to sign it (even if next day – but want to avoid this way)
b. OR in the alternative can be notarized (under UPC) – (IN WRITING, SIGNED,
NOTARAIZED)
c. IF not in writing, material portions have to be handwritten and signed [holographic
will] (material portions in handwriting, signed)
d. Harmless error exception (requires C&C evidence)

Reason for Formalities?
 Evidentiary function
o Increases reliability of the proof offered at probate
 Protective function
o protect form undue influence, etc.
 Ritual function
o impresses upon testator importance of act
o gives comfort that wishes will be carried out

UPC § 2-504: Self-Proving Affidavits

UPC § 2-510 Incorporation by Reference
 “all artwork listed on the appraisal by London Appraisers, Inc. dated Jan. 12 , 2012.”
Document signed Feb. 13, 2012.” Effective
 “all artwork listed on the appraisal by London Appraisers, Inc. in the near future.” Not
effective

(1) signed
(2) sufficiently describe the document he/she is referring so it can be clearly identified
(3) writing has to be in existence at the time

UPC § 2-513 [TPP exception] - Separate Writing Identifying Devise of Certain Types of
Tangible Personal Property

[exception to incorporation by reference rule]
(1) only tangible property, except money
(1) signed
(2) must describe the items and devisees with reasonable certainty
(3) allows you to do this after signing will

+Sound mind (Covered below)
 Testamentary Capacity – sound mind
Restatement elements (§ 8.1)
(1) Nature and extent of property
(2) Natural objects of bounty
(3) Disposition itself
(4) Overall plan

 Problem with these elements:
o Nature and extent of property – very general, older and greater the assets the harder
it is. Doesn’t require specific listing,
o Natural objects of bounty – very subjective,
o Disposition itself –
o Overall plan – trusts, tax planning, very confusing and is very confusing. At what level
do they need to create/understand their plan?
o Lucid Intervals – coming in and out of mental capacity even if it is for a short
period of time that should be enough to pass the elements (literally the moment
you sign the documents that you need capacity)
 Undue Influence - becomes undue when another person influenced to the degree that
the will reflects the other person’s intent instead of the testator’s intent
o influence exerted “was so dominant and controlling of the testator’s mind that
in making the will, he ceased to act of his own free volition and became a mere
puppet of the wielder”
o Factors
(1) an opportunity to exercise influence
(2) the existence of a confidential relationship between the testator and the
person claimed to have influenced the testator
(3) active participation by the alleged influencer in preparing the will;
(4) an unexpected disinheritance or an unreasonable disposition
(5) the singularity of will provisions
(6) inducement of the testator to make the will

WILL CHALLLENGES

Types: No wrongdoing

 Lack of Capacity (Torgesen)
o Entire will invalid
 Insane Delusion
o general capacity, but false/unreasonable conception of a reality
o objective standard
o ex: a person believes wife is having an affair b/c she works out – [objective
standard, no one would have thought wife is having an affair b/c of her working out)
o affected portions invalid (i.e. provision disinheriting wife, invalid but other specific
gifts, etc.)
 Mistake
o Dependent relative revocation (later)
o Reformation (later)
o Sometimes NO relief!

Types: wrongdoing

 Undue Influence (Torgersen)
o Affected portions invalid
 Duress
o Person forced to change provisions under threat
o Affected portions invalid
 Fraud
o In the inducement (wrong facts)
o In the execution (wrong about contents of will – “this will says you will give
everything to your kids, but it actually says this will gives everything to me”)
o Constructive trust – person received money it will be held in constructive trust and
forces person to pay ?

PROTECTED INTERESTS
1. Spouse’s elective Share
2. Community v. Separate Property States
3. Children’s Allowances Rights
4. Creditors

Lists the priority of claims (CLASSIFICATION OF CLAIMS)
 costs and expenses of administration (lawyers)
 reasonable funeral expenses
 debts & taxes w/ preferences under fed. law
 reasonable necessary and med and hospital expenses of last illness
 debts and taxes w/state
 all other claims

Elective share:
 BIG PICTURE
 Purpose: protect spouse from being disinherited
 Two theories of marriage that support this
o Economic partnership theory –
 Recognizes the value of nonmonetary contributions to a marriage
 Seen in divorce settlements, community property law
 “the system of equitable distribution views marriage as essentially a shared
enterprise or joint undertaking in the nature of a partnership to which both
spouses contribute directly or indirectly, financially and non-financially –
the fruits of which are distributable at divorce/death
o Support theory –
 Pro: decedent has duty to provide continuing support to spouse
 Con: accomplishes this poorly, though – if estate is large, 50% may provide
much more than is needed for support; if estate is small, 50% may be way
too little

2-202(a) Elective Share
1. find augmented estate
a. 203(a) Augmented Estate
i. net probate [brok. acct, tpp, funeral admin exp, loan tax, homestead, fam
allow, exempt prop]
i. minus non prob to other, ins. proc per stirpes; gift reduced?];
ii. nonprob to spouse
iii.
2 decedent’s net probate estate (2-204)
3 decedent’s non probate transfer to others (2-205)
4 decedent’s non-probate transfers to surviving spouse (2-206); and
5 surviving spouse’s property and non-probate transfers to others (2-207)
6 determine the value of the marital property portion
7 spouse has the right to take an elective-share amount = 50%

§ 2-203(b): Marital Property Share
 Alt. A: Sliding scale (100% at 15) years of augmented estate
o Because it includes both spouse’s assets it includes that inheritance whereas
alternative B would not
 Alt. B: 1/2 of augmented estate that would be marital property (excluding inheritance)

Problem (using Alternative A – sliding scale)

2-209 Payment of elective share amount
 first offset amounts that pass to spouse already by (a) will (b) intestacy, or (c) nonprobate
transfers
 second, offset spouse’s own assets transfers to others (x length of marriage multiplier)
 third, other assets from decedent’s net probate estate
 finally, recover proportionately from decedent’s nonprobate transfers to others
Interpretation & Changed Circumstances
 STEPS:
 Cardinal Rule – testator’s intent control’s
o Interpretation: ascertaining the testator’s actual intent
 if you can’t determine testator’s intent, or if the evidence you have doesn’t
determine it, THEN you apply rules of construction
o Construction: assigning likely meaning when intent cannot be determined
 See flush language of §§ 2-601 and -701
 Evolution of Interpretation Rules
o At common law, very strict plain meaning rule (no extrinsic evidence)
o Old approach: “courts have no power to reform wills . . . imaginary mistakes can’t be
corrected. Omissions can’t be supplied.”
o Then, allowed extrinsic evidence only for latent ambiguities (latent – only with
additional facts does it seem ambiguous)
 Ex: I give $5,000 to my nephew Brian – but two nephews named Brian.
o Today: MISSED NOTES (look at UPC)
 Reformation (§ 2-805) [some states allow and some states do not]
o UPC even allows a court to reform the will for mistakes (neither patently nor
latently ambiguous, but simply wrong!)
 Ex: name wrong charity or wrong relative
 Requires C&C evidence
 But lower standard (probable intent) for tax issues
o Many states (MN have not gone this far

 UPC Rules of Construction
o Contained in part 6 (wills
o Contained in part 7 (governing instruments)
o Why did they break it up? Because non-probate transfers are becoming a bigger part
of estate planning they want to apply these default rules to them as well. Break them
up because will-specific ones sometimes don’t make sense or can’t apply, but wills
apply to both part 6 AND 7
o Retirement accounts – governed by ARISA, says it trumps all state law. BUT, it does
not for wills? Not clear by law but mostly state law applies. Still an unsettled issue

 Rules for changed circumstances
o Address things that happened after you signed it that you didn’t foresee, and if that
happened they will apply scattered provisions (Parts 3, 7, 8, 9)

 Note that some rules
a. Yield to intent if established by extrinsic evidence
b. Yield to intent, if stated in document
c. Don’t yield to intent

Incorporation by reference – in existence, Clearly identified, show intent to include it
Acts of Independent Significance (anything before OR after the testator’s death)

a. Antilapse if you can make gift and it’s not conditioned on survival we’re going to assume it is
conditioned on survival, but we will give it to descendants
a. How does your answer change if at all if instead T states “I give
10,000 to my father J if he survives me?
i. Under UPC, no change. You put words of survivorship,
the UPC assumes you did not mean it
ii. Rule of construction overcome by evidence of intent
iii. Anti-Lapse Rule

Commissioners’ “logic” (from comments)

An objection to applying the UPC anti lapse staute is that mere words of survivorship
somehow establish a contrary inention. The argument is that attaching . . .

An equally plausible inference is that the words of survivorship are in the testator’s
will merely because the testator’s lawyer used a will form with words of survivorship.
The testator who went to lawyer X and ended up with a will containing devises w/ a
survivorship could by change have gone to lawyer Y and ended up with a will
containing devised with no survivorship requirement with no different intent on the
testator’s part from one case to the other.
2. Assume, instead that J said in his will I give ½ of the residue of my estate to my neighbor Desi if
hse survives me and I give one half of the residue of my estate to my neighbor Bill if he survives
me. What happens?
a. If it is a residue gift to two non family members presumption is that it fails and
goes to the other person.

3. Assume A states in her will I give 10,000 to each of my nieces and nephews who survive me.
Would this include Caden, Nathan, and Emily.
a. 705(c) – presumption is they would not. IF amy had her own nieces and nephews
(blood) then she did not intend to include Todd’s. BUT if she had that clause and did not
have any of her own then she MUST have intended to mean Caden Nathan and Emily
4. What if J provided in his will he would give grandson Grayson 100,000 but then later gave him
50,000 of apple stock and wrote in a letter to G that it was “in partial satisfaction of the devise
under my will.” However by the time he died stock was worth $110,000. Is g still entitled to
another $50,000? Must Grayson return 10,000?
a. Yes he is entitled to the 100,000 unless there is a contemporaneous writing
stating opposite intent or if recipient in writing acknowledged it ?
b. How much is he entitled to? Clear ademption of satisfaction of $50,000. If you
give an asset it’s the value at the time of the gift not at the time of death.
c. No he does not have to return $10,000
Once he gets stock it is a completed gift, he can’t pull it back from Grayson.
Reviewing Antilapse statute assumes “survival” BUT if not it will go to his descendants by
representation
 downfall: even if you have words of survivorship we won’t read them literally we will
assume you you didn’t mean that survivorship limitation
 firstly: if you give 10000 to son, it will one assume survivorship requirement. But if he is
dead it won’t lapse it goes to descendants

reviewing ademption: if property devised by will is not a part of your estate at your death the
provision fails (adeems) so if you made a provision for certain property and that property
doesn’t exist at the time of your death the property is adeemed

two types of class gifts:
1 generational ones “my nieces and nephews:
multi-generational “my heirs”, “issue”


ademption by satisfaction – if I give before I die, is it ademption by satisfaction or ?
did you have contemporaneous that was acknowledged to be part of will ?
 very common
5. assume jerry had a valuable antique gun that he gave to T under his will. However,
before he died Jerry sold the gun. Does jerry receive anything under the scenario?
a. Must show J did not intend for this to adeem the gift, if not it won’t be
adeemed
b. Guns gone, assume J intended to sell and keep proceed and gun adeemed
from will
c. If you do replace it with same character bugt you have to show intented this
to be replacement

6. Assume T’s will includes a provision that states, “before making any distributions my
personal representative shall pay all of my debts existing at the time of or as a result
of my death” T has 2500 credit card, 5000 funeral, 100,000 mortgage on T’s home.
How would you instruct personal representative
a. 2-607 can’t use estate to pay off mortgage (special claim)
section 2-605 increase in securities; accessions
 IF the result of the same security the person gets the additional securities from that security
given
Section 2-705 adopted kid is your kid, but 705(f) “in construing class gift adoptee of the child is not
considered child unless the adoption took place BEFORE the adoptee reached 18 years of
age” so if you make a class gift and a member is a member by adoption unless adopted
before 18.
 Why is there this provision? Attempt to prevent people from fraud, if you want to bring
another beneficiary in you could adopt them and make them your child and they would
become a descendant.

Rap 2-905 combination of the 21 years the last death OR 90 years after its creation

Express trust v. implied trust
 Express trust purposeful trust created by individual
 Implie – remedy when a person holds money that isn’t there creates implied in court
o Two main ones
 Resulting trust
Constructive trust This trust does not consider the intentions involved, only that justice is
worked into the situation or outcome.

Four ways to create an express trust

2. by will
3. by trust agreement
4. by declaration (oral trust)


why people create?
 Protect
 Tax reasons
 Manage money for people who can’t themselves (minor, or spendthrift, cognitive disability)
 More efficient way than giving property in a remainder


Public policy violations
 Conditioned on some racist or race-based condition
 If you are incentivizing someone to get divorced or not to get remarried
o Providing until they get remarried v. incentivizing not to get married are two
different things

Elements for a valid trust
- definite beneficiary (does not have to be a definite PRESENT beneficiary, can be a future but
must be a definite), either class of people or particular individual
- if the sole beneficiary Is also trustee and settlor than doctrine of merger applies and you
don’t have a trust
- CAPACITY (to make a gift also require you understand effect that gift will have on your
financial security)
- INTENT
- DEFINITE BENEFICIARY
- DUTIES (TRUSTEE)
- GIVE TRUSTEE SOMETHING (TRUST PROPERTY)

Consideration for trustee accepting
Does not have to accept compensation

Statute of frauds – any transfer of real estate requires a writing
(not a trust requirement)

most states transfer property require a notarized signature – don’t need witnesses but you do need
a notary in case you transfer property into it so there is no title questions down the road

rule for validity of instrument: very similar to rule for wills (4)
valid if it is executed in accordance either in the state it was executed, the state where the settlor
was domiciled OR have an abode, the state where the trustee was domiciled, or anywhere that
the property is located
- Straight from UTC

2-506 is analogous versiou: PLACE OF EXECUTION, PLACE OF DOMICILE, OR PLACE OF DEATH IS
WHAT MAKES A WILL VALID

make connections where will and UTC overlap

beneficial interests (2 types)
- Present interest – presently eligible to receive distributions
- Future interest (remainder interest)

1. Present beneficiary different interests he/she could have:
- Interest in the income
o Mandatory
o Discretionary
- Principal Interest in the interest
o Mandatory
o discretionary
- Or both
2. Remainder
3. POA
a. General power of attorney
i. Able to appoint anyone as a beneficiary (if I’m beneficiary and I can appoint
these assets t myself or my estate then it is general powr) if I can’t it is a
limited power
b. Limited POA
i. No matter how limited it is a limited because you CAN’T GET THEM TO
YOURSELF

Private v. charitable
Want to know about private, not charitable
Can be wide open or for a specific charity

Obtained trust through illegal means, didn’t really trade trusts but by illegal means, say that person
holds in constructive trust and this is exactly where it would be nice to have a case that is an
example of that.

How often have states adopted UTC apply UPIA
 UPIA predates UTC (1994 UPIA and UTC 2000) still only 5-6 states that passed UTC, but still
best representative for purposes of this case
 More and more states will be adopting the UTC
 A lot of states HAVE adopted UPIA, all the states that have adopted UTC have or will adopt
UPIA, but many of them who have not adopted UTC will nonetheless adopt UPIA, which
basically just codifies fiduciary duty and investment case law across the US

General rule for construction of trust instruments
 Same (incorporates) as UPC rule governing instruments
 Everything UPC most of it is default rules
 There are a few rules in UTC that settlor can’t change

What are some things about UTC that you can’t change if you’re a settlor?
 Any right the legislature has required court, in court jurisdiction, court has the statute
 So you could say I do not want court to require bond, but court isn’t bound by that, it is the
court’s responsibility to require.
 Rules for creating a trust
 With respect to beneficiaries
o Can’t alter trustee duty to act in good faith, Fiduciary duty
o Rights to notice, can’t take those away have to be able to protect themselves
o Once they reach 25 they are qualified beneficiary they are entitled to notice
 Creditors rights
o Can’t take away rights from creditor if they have right you
 Third party
o With trustee you can’t alter the rights that third party has

What laws can you choose?
 If you don’t state what law applies what’s the default rule
o State with the most substantial relationship to the issue that is before the court
 Factors, where beneficiaries live, where property is, where its being
administered, etc.
o Most substantial relation is the default rule for construction
 Which laws govern place of administration
o
ADMINISTRATION
PLACE OF ADMINISTRATION
Can trustee change that
 Yes, how?
 Give notice to beneficiaries and co-trustee
 Beneficiaries can object
 Why might a trustee change principle place of administration
o Taxes
o And trustees – maybe WELLS FARGO change to JP morgan


MODIFICATION V. REFORMATION
 Reformation –, DOCUMENT ITSELF ON ITS FACE does not accomplish the settlor’s intent so
we’re going to reform it
o Rule for reforming it (standard) clear and convincing evidence of settlor’s intent
(identical language as UPC)
 Modification – intent accurately reflected BUT your intent has changed
o Four main times when they do the modification
 Change to the material purpose of it 411(a)
 Settlor + beneficiary consent
 Change to make it consistent with the material purpose; or (411(b)
 Beneficiary consent
 Change due to unexpected circumstances 412 (private trust versions
and cy pres)
 Consent not needed
 Tax purpose §416

o Court can do so with or without beneficiary consent

How do these play into out of court agreements
 Rule policy is that we want to try to kep trusts out of court and let these interests resolve
themselves.
 This language (above) but that language says beneficiaries could do anything the
court could have done, does that supersede this?
o Seems to leave to court
o In that position you have to leave to beneficiaries
o Good argument you could do it out of court if you want to play it safe go to court and
have them sign off on it

OFFICE OF THE TRUSTEE
 Appointment
o Two ways trustee can accept the appointment
 Document, Substantial compliance (writing) so you have clear record of
when they were trustee when they were not
 Or by acting as trustee
 Take property make decisions, you are trustee
 Unless document says you can remove you can’t (unless they aren’t doing their job

 Removing trustee section 706
o Serious breach
o Lack of cooperation between trustees
o Persistence and ineffectiveness
o If it is in best interest of beneficiaries AND not in consistent with material purpose

QUALIFIED BENEFICIARY - PRESENTLY ELIGIBLE OR IF TRUST WERE TO TERMINATE OR END
TODAY THEY WOULD BE (FIRST REMAINDERMAN) OR PRESUMPTIVE BENEFICIARIES WOULD BE
IF EVERYTHING BEFORE THEM ENDED (eligible or who would if the trust ended)

If you have co-trustees
Common law used to say all trustees have to agreem
UTC majority requirement
If a trustee is in a minority are they liable for the trustee’s action
NOT LIABLE BUT HAVE TO RAISE OBJECTION TO IT
BUT if it is serious breach and they don’t try to take action to rectify the breach then they are liable

When you have co trustees and tey delegate powers to one group and relieve themselves from that
duty?
 You do these duties you do these
 You can delegate anytime you want unless you said you can’t delegate

Main duties of a trustee
 Good faith toward beneficiaries
 DUTY OF LOYALTY
 other smaller ones, everything kind of flows from that
 (1) duty of loyalty (not self interest) (2) duty of impartiality between beneficiaries and (3)
duty not to comingle your ?
 minor duties – diversify (invest property); keep detailed records; inform beneficiaries, make
distributions when due; keep costs to reasonable amount; balance efficiency and quality;
control and protect assets (take custody)

duty of loyalty violations
(1)
(2)
(3) opportunity for the trust (if you’re competing for the trust) you buy for yourself
instead that’s an opportunity the trust had that you took away from the trust

Class notes:

Ending trusts overview

(2) A lot of trustee’s are going to be an executor representative estate and they will also be trustee, so
in order to be able to work with both they have to be allowed to do this mere fact that
buying/selling is not against the duty of loyalty

(3)


powers
section 815 general powers of the trustee
 without authorization may exercise . . . and any other powers appropriate to achieve
proper management, distribution, and ? over the trust property
 AS BROAD AS IT COULD BE
 Subject to the duties

Then why section 816 which picks out specific powers?
Because when dealing with a third party it would be easy to point to a specific duty and say no I can
pledge this . . banks may be leary. You could take 816 out and it wouldn’t change anything
substanticely, but practical administration standpoint it makes thigns easier for trustee.

Trust administration: investment aspects of the trust
 UPIA 1994, before that it was model prudent manual (50s, much more restrictive, then
became known as model prudent person manual)
 Prudent man/person not as high required knowledge of investment
 Uniform prudent man invest 1/3 in gross, then adopted UPIA
 As long as you are making a good decision, so forth
 Reasonable care skill an dcaution if you ARE a professional then you hold yourself to
heightened investment skills and you are held to a higher standard. JP morgan Chase and
you tak eon a trust even under UPIA you are held to a higher accountability than an
individual who is investing. It used to be a flat standard
 If you’re a beneficiary suing a trustee you can’t just pull out one or two investments from
portfolio, this one went bad,
 Diversification, how many companies but how wide you r portfolio is as well
 Common investment: Mutual funds - basically rather than buying stock in 3 or 5 big
companies you buy a mutual fund and mutual fund manager buys stock in 100
companies you diversify, you buy single asset and in that asset you have 100 or index
based one
 Punitive damages typically are not available, courts of equity don’t allow punitive damages,
exception here is if the trustee was reckless or acted in bad faith, went BEYOND negligence
standard breach
 Statute of limitations on a claim against a trustee
 When does it start:
 One year statute: if a trustee notifies beneficiriary they may have
breached then it’s one year (but this doesn’t happen b/c theyre
going to go try to get their accounts approved)
 Otherwise it’s 5 y ear statute
 When does it end

CREDITOR ISSUES AND COURT INVOLVEMENT
SPEND THRIFT CLAUSE
 What is it?
o Spendthrift is a person who can’t manage their money
o Creditors cannot reach the assets but that does NOT mean they can’t get the
distributions
o Just means they can’t get it before the distribution
o Creditor does nto have a claim for abuse of discretion
o There’s discretionary trust and creditor has no recourse for that. A beneficiary can but
creditor can’t
o Has to go two ways
 Prevent involuntary transfers
 And involuntary transfers (where a beneficiary may put his transfer up for a
guarantee on a loan)
o Other than that is there any specific language that needs to be used to make it valid?
 No specific language is required, even a reference to spendthrift
trust/spendthrift clause will basically imply those above-two conditions
 You don’t want to just say it is spendthrift clause you want to explain what it is
o If you are a trustee and a beneficiary, also able to make distributions to yourself, is there
a different rule there?
 yes
 Rule: only to extent power to distribute to self is not ascertainable by an
unlimited?
 Beneficiary who si third party beneficiary – can’t reach
 Also a trustee – can reach unless it is limited to an ascertainable ? on
discretion
 If it is revocable trustee can reach how much, all of it, can revoke and take
out
 If it is irrevocable they can get the max amt he distribution COULD be made,
can’t force distributions, butgiven the authority to distribute to self they can
distribute up to that amount
 If irrevocable, All creditor can get is up to the income that amount on amount,
unless authorizes creditor up to full amount
 Typically not going to see a revocable trust with a spendthrift in it, but, 3 can be
a self-settled trust
 If no spendthrift the creditor can reach up to the full amount, court can limit
based on the circumstances

CREDITORS RIGHTS IN A SPENDTHRIFT TRUST
1. Beneficiary
a. X
2. Ben/Trustee
a. Extent limited to an ascertainable standard (§504(e))
3. If Ben/settlor, and it is revocable,
a. It’s 100%
4. If irrevocable, ben/settlor has
a. Max amount of discretion the trustee has

Court involvement
 ? do not have standing
 unlike most areas of law court CAN issue orders giving instructions when there is not an
actual dispute “doesn’t have to be ripe” can still issue interpretive but what they WON’T do is
tell the trustee WHAT to do (discretion)

Three ways court will recognize person standing in place of beneficiary
REPRESENTATION (3 situations)
 one where individual does not have an interest in the trust
o if it is a parent or a fiduciary (guardian) they can represent that person’s interest
o parent of a minor or unborn child as long as parent does not have a conflict (not a
beneficiary themselves but can still represent interst)
 virtual interest – you do have interest but because your interest is substantially the same as
another party’s you can represent their interest
o example: minor or unborn
o key is here that people have to be minors or unborn or for some other reason
incpapable of acting (disability)
o or if location can’t be determined
o UTC you have to be ONE OF THOSE CATEGORIES not the case in state, sometimes
you can just be an able minded adult and be represented by someone with similar
interests

iNHERITANCE RULES (ABOVE)

rules for debts/advancement
if I owe a debt and I owe them something when they die is that debt counted against estate.
 If dad dies and you owed him money is your share reduced by the amount of the debt
o So for debts, YES, if I wowe you money and you die and I get money from you, share
is reduced
 If you are grandchild and your father owes grandpa money, and dad dies still owing
o No that does NOT reduce
o Personal to the individual with the debt

Presumption is a gift is a gift unless writing indicating otherwise (or clear and convincing?
§2-109


adultery or desertion – if a spouse is by clear and convincing evidence found to be adulterous or
desert do you still inherit from deceased spouse? UNDER UPC yes
divorce eliminates rights but desertion/adultery DOES NOT, many other states don’t follow this

 UTC 2-205
o “The signing of a will by an interested witness does not invalidate the
will or any provision of it.”

Emerging Issues
 4 Most Recent:
o Changing forms of wealth
 Land v. intangible
 Lifetime wealth transfer (education)
o Changing life expectancies
 When social security was created the average life expectancy
was 68  now much longer
 Less need to protect kids; more need for spouse
 People aren’t dying anymore when their kids are young,
however if you die young your spouse may be alive for
30+ more years
 Less assets at death
 If you live into your 90s your assets will be much less
o Acceptance of non-traditional families
 Adoption, children born out of wedlock
 Stepchild references, etc.
o Non-probate revolution
 In the future:
o Same sex union (Windsor case)
 Federal agencies do not need to respect state laws on marriage
if it allows for same sex marriage
 Windsor case found this unconstitutional
o Digital assets (Uniform Act on its way)
 Act expected to be out in summer 2014
o Assisted reproduction
 Two primary techniques:
 Intrauterine insemination (artificial insemination)
o Sperm is inserted artificially into the uterus and
federalized within the body
o Egg must be the woman’s egg but the sperm can
come from a donor
o History:
 First reported use on humans in 1770
 Become common in 1950s
 By 1970, 10,000 born a year
 By 1996, 65,000 born a year
 In vitro fertilization
o Egg is fertilized outside the body
o Egg, sperm or both could come from donor
o History:
 First in 1978
 Since, over 5,000,000 born
 Reasons for increase
o Woman having children later in life
 8x more likely to have 1t child after 34
than in 1970
 Average age of women having first child =
25 compared to 21 in 1970
o Lower cost
 Now can be accomplished in less attempts
 More insurance coverage
o Lower stigma
 But how posthumous conception?
 1949: glycerol + sperm + freezing = viable
 4 years later, first born from frozen sperm
 In 2004 a child was born from sperm that had been
frozen for 21 years
 1984 first child born from frozen embryo
o This opens the door for woman to have children
after their death
 1986 first child born from frozen egg
o Success rate is very low
 Who does this?
 Military personnel
 Younger individuals (or couples) with cancer
o Freeze your sperm before treatments so you can
still have a family
 Some just in case before vasectomy
 Who uses after partner’s death?
 Honoring the memory of someone who has dies
tragically or at young age
 Getting older but not ready for a new relationship
 Want to know genetic identity
 Grandparents
o Gets into the realm of “creepy”
 How many PCC have been born?
 Unknown
 But 100 claims for social security benefits have been
made
 Why does this matter to T&E?
 Social Security
 Intestacy
o Is the child born after death entitled to inherit
 Will
o Should the rules of construction apply and rule
that under class gifts it should include children
after death?
 Approaches in the law
o 1946 Model Probate Code
 What does begotten mean?
o 1969 UPC
 What does conceived mean?
o 1990 the UPC was amended to say a child in
gestation before death
o In MN there is a statute that says children
convinced or born after the death of a parent is
never entitled to inherit or included in class gifts
o 2008 UPC (handout)
 May inherit if:
 Deceased parent “intended to be
treated as a parent,” and
 “in utero not later than 36 months
after the individual death or born
not later than 45 months after the
individuals death.”
o Only Colorado and North
Dakota have adopted
o Law today
 10 state recognize posthumously
conceived children for inheritance
purposes:
 California, Colorado, Florida, Iowa,
Louisiana, Maryland,
Massachusetts, New Jersey, New
Mexico and North Dakota
 12 states now exclude it
 Final Notes
o If anyone is still struggling with per stirpes v. per capita at each
generation, consider the language at UPC 2-709
o Can you limit, in a will, a person’s right to inherit through intestacy?
o Anti Lapse Review
 Common law rule was a rule of lapse
 Assumed that there were words of survivorship
because we didn’t want assets going to a dead person
 The anti lapse adds a survivorship but then if the person
doesn’t survive it goes to their children
 Applies even if there are words of survivorship under the
statute you ignore those words
 Apply UPC law on test—no extra points for knowing MN law
 What happens if the residue itself fails?
 See restatement (Third) Propety: Wills & Donative
Transfers 5.5 cmt. o.
 Likes to give hard tests and scores very aggressively
 Be prepared for it to be hard handed out warm up questions