Wills, trusts, and estates : examples and explanations / Gerry W. Beyer.
2012
KF755.Z9 B49 2012 (Map It)
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Items
Details
Author
Title
Wills, trusts, and estates : examples and explanations / Gerry W. Beyer.
Published
New York : Wolters Kluwer Law & Business, [2012]
Copyright
©2012
Call Number
KF755.Z9 B49 2012
Edition
Fifth edition.
ISBN
9780735588240
0735588244
0735588244
Description
lxxxi, 676 pages : illustrations, forms ; 26 cm.
System Control No.
(OCoLC)793973980
Bibliography, etc. Note
Includes bibliographical references and index.
Record Appears in
Table of Contents
Preface
xxxiii
Acknowledgments
xxxvii
Correlation Table: Clark/Lusky/Murphy/Ascher/McCouch, Cases and Materials on Gratuitous Transfers, 5th ed. 2007
xxxix
Correlation Table: Sterk/Leslie/Dobris, Estates and Trusts: Cases and Materials, 4th ed. 2011
xliii
Correlation Table: Dukeminier/Sitkoff/Lindgren, Wills, Trusts, and Estates, 8th ed. 2009
xlix
Correlation Table: O'Brien/Flannery, Decedents' Estates: Cases and Materials (2011)
lv
Correlation Table: Scoles/Halbach/Roberts/Begleiter, Problems and Materials on Decedents' Estates and Trusts, 7th ed. 2006
lxi
Correlation Table: Vollmar/Hess/Whitman, An Introduction to Trusts and Estates (2003)
lxvii
Correlation Table: Gallanis, Family Property Law, 5th ed. 2011
lxxi
Correlation Table: Gary/Borison/Cahn/Monopoli, Contemporary Approaches to Trusts and Estates, (2011)
lxxv
ch. 1
Introduction and Overview
1
[§]1.1.
Brief History of Property Transference When Owner Dies
1
[§]1.2.
Basic Terminology Used in This Book
2
[§]1.2.1.
Intestate Succession Terms
3
[§]1.2.2.
Wills Terms
4
[§]1.2.3.
Trusts Terms
5
[§]1.2.4.
General Terms
6
[§]1.3.
Determination of Applicable Law
6
[§]1.3.1.
Generally
6
[§]1.3.2.
Ownership and Marital Rights
7
[§]1.3.3.
Real vs. Personal Property
8
[§]1.4.
The "Big Picture"
9
pt. I
INTESTATE SUCCESSION
11
ch. 2
Descent and Distribution
13
[§]2.1.
Reasons Most Individuals Die Intestate
14
[§]2.1.1.
Lack of Property
14
[§]2.1.2.
Unaware of Importance
14
[§]2.1.3.
Indifference
15
[§]2.1.4.
Cost
15
[§]2.1.5.
Time and Effort
15
[§]2.1.6.
Complexity
16
[§]2.1.7.
Admission of Mortality
16
[§]2.1.8.
Reluctance to Reveal Private Facts
16
[§]2.2.
Historical Development of Descent and Distribution
16
[§]2.3.
Surviving Spouse
18
[§]2.3.1.
Protection at Common Law---Real Property
18
[§]2.3.1.1.
Dower Rights of Widow
18
[§]2.3.1.2.
Curtesy Rights of Widower
18
[§]2.3.2.
Protection at Common Law---Personal Property
18
[§]2.3.3.
Modern Law
19
[§]2.3.4.
Community Property Jurisdictions
20
[§]2.4.
Descendants
20
[§]2.4.1.
Basic Procedure for Determining Shares of Descendants
20
[§]2.4.1.1.
Step One---Identify Intestate's Children
21
[§]2.4.1.2.
Step Two---Determine If Any Predeceased Child Left a Descendant Who Outlived Intestate
21
[§]2.4.1.3.
Step Three---Ascertain State's Method of Handling Multi-Generation Succession
21
[§]2.4.2.
Per Stirpes (by Right of Representation)
22
[§]2.4.3.
Per Capita with Representation
23
[§]2.4.4.
Per Capita at Each Generation
26
[§]2.4.5.
Distribution Exercises
27
[§]2.5.
Ancestors and Collaterals
30
[§]2.5.1.
Parents and First-Line Collaterals
30
[§]2.5.1.1.
Both Parents Survive Intestate
30
[§]2.5.1.2.
One Parent and at Least One Sibling (or Descendant of Sibling) Survive Intestate
31
[§]2.5.1.3.
No Parent and at Least One Sibling (or Descendant of Sibling) Survive Intestate
31
[§]2.5.2.
Grandparents, Second-Line Collaterals, and More Distant Relatives
31
[§]2.5.2.1.
Parentelic Systems
32
[§]2.5.2.2.
Degree-of-Relationship Systems
33
[§]2.5.2.2.1.
Civil Law System
33
[§]2.5.2.2.2.
Canon Law System
34
[§]2.6.
Escheat
35
ch. 3
Treatment of Certain Categories of Potential Heirs
37
[§]3.1.
Posthumous or Afterborn Heirs
37
[§]3.2.
Adopted Individuals
38
[§]3.2.1.
Inheritance Rights of Adopted Children
38
[§]3.2.1.1.
From and Through Adoptive Parents
38
[§]3.2.1.2.
From and Through Biological Parents
39
[§]3.2.2.
Inheritance Rights of Adoptive Parents
40
[§]3.2.3.
Inheritance Rights of Biological Parents
40
[§]3.2.4.
Adoption by Estoppel or Equitable Adoption
41
[§]3.2.5.
Adult Adoption
41
[§]3.3.
Non-Marital Children
42
[§]3.4.
Children from Alternative Reproduction Technologies
43
[§]3.5.
Stepchildren
44
[§]3.6.
Half-Blooded Collateral Heirs
45
[§]3.7.
Non-United States Citizens
47
[§]3.8.
Unworthy Heirs
47
[§]3.8.1.
Forfeiture
47
[§]3.8.2.
Civil Death
47
[§]3.8.3.
Corruption of the Blood
48
[§]3.8.4.
Heir Killing Intestate
48
[§]3.8.4.1.
Murder
48
[§]3.8.4.2.
Voluntary Manslaughter
50
[§]3.8.4.3.
Involuntary Manslaughter
50
[§]3.8.4.4.
Non-Criminal Killings
50
[§]3.8.5.
Suicide
50
[§]3.8.6.
Parent's Failure to Recognize or Support Child
51
[§]3.8.7.
Adultery
51
[§]3.8.8.
Abuse
52
[§]3.9.
Non-Marital Partners
52
ch. 4
Other Intestate Succession Issues
53
[§]4.1.
Ancestral Property
53
[§]4.2.
Advancements
54
[§]4.3.
Survival
58
[§]4.4.
Disclaimers
61
[§]4.4.1.
Reasons Heir May Disclaim
61
[§]4.4.2.
Requirements of a Disclaimer
62
[§]4.4.3.
Distribution of Disclaimed Property
63
[§]4.5.
Assignment or Release of Expectancy to Inherit
64
[§]4.6.
Equitable Conversion
66
[§]4.7.
Liability for Debts of Predeceased Intermediary
66
[§]4.8.
Heir Designation
67
[§]4.9.
Choice of Law
67
pt. II
WILLS
69
ch. 5
Requirements for a Valid Will
71
[§]5.1.
Legal Capacity
72
[§]5.1.1.
Age
72
[§]5.1.2.
Marital Status
73
[§]5.1.3.
Military Service
74
[§]5.2.
Testamentary Capacity (Sound Mind)
74
[§]5.2.1.
Elements of Testamentary Capacity
74
[§]5.2.1.1.
Comprehend Action and Its Effect
74
[§]5.2.1.2.
Know Nature and Extent of Property
75
[§]5.2.1.3.
Recognize Natural Objects of Bounty
75
[§]5.2.1.4.
Simultaneously Hold Elements in Mind and Make Reasonable Judgment
76
[§]5.2.2.
Temporal Nature of Testamentary Capacity
76
[§]5.2.3.
Testamentary Capacity Compared to Other Types of Capacity
77
[§]5.2.4.
Aging Process
78
[§]5.2.5.
Individuals with Questionable Capacity
78
[§]5.2.6.
Demonstrating Lack of Capacity
80
[§]5.3.
Testamentary Intent
80
[§]5.4.
Formalities
82
[§]5.4.1.
Purposes
82
[§]5.4.2.
Attested Wills
83
[§]5.4.2.1.
In Writing
83
[§]5.4.2.2.
Signed by Testator
85
[§]5.4.2.2.1.
Defined
85
[§]5.4.2.2.2.
Proxy Signature
86
[§]5.4.2.2.3.
Location of Signature
87
[§]5.4.2.2.4.
Testimonium Clause
88
[§]5.4.2.3.
Attested by Witnesses
89
[§]5.4.2.3.1.
Number
89
[§]5.4.2.3.2.
Legal Capacity
89
[§]5.4.2.3.3.
Attestation Capacity
89
[§]5.4.2.3.4.
Attestation Intent
89
[§]5.4.2.3.5.
Temporal Order
90
[§]5.4.2.3.6.
By Mark
91
[§]5.4.2.3.7.
By Proxy
91
[§]5.4.2.3.8.
Location
91
[§]5.4.2.3.9.
Presence---Testator Signing in Witnesses' Presence
91
[§]5.4.2.3.10.
Presence---Witnesses Attesting in Testator's Presence
92
[§]5.4.2.3.11.
Presence---Witnesses Attesting in Each Other's Presence
93
[§]5.4.2.3.12.
Interested Witnesses
93
[§]5.4.2.3.13.
Attestation Clause
94
[§]5.4.2.3.14.
Recommended Witnesses
95
[§]5.4.2.4.
Self-Proving Affidavit
96
[§]5.4.2.5.
Will Execution Ceremony
100
[§]5.4.2.5.1.
Before the Ceremony
101
[§]5.4.2.5.2.
The Ceremony
101
[§]5.4.2.5.3.
After the Ceremony
104
[§]5.4.3.
Holographic Wills
105
[§]5.4.3.1.
Requirements
106
[§]5.4.3.2.
Extent of Holographic Material
107
[§]5.4.3.3.
Uses of Holographic Wills
108
[§]5.4.4.
Nuncupative Wills
109
[§]5.4.5.
Soldiers' and Seamen's Wills
111
[§]5.4.6.
Statutory Wills
111
ch. 6
Changing Circumstances After Will Execution---Property
115
[§]6.1.
Classification of Testamentary Gifts
116
[§]6.1.1.
Specific Gifts
116
[§]6.1.2.
General Gifts
116
[§]6.1.3.
Demonstrative Gifts
117
[§]6.1.4.
Residuary Gifts
117
[§]6.1.5.
Type of Beneficiary
117
[§]6.2.
Ademption by Extinction
118
[§]6.3.
Ademption by Satisfaction
122
[§]6.4.
Changes in Value
124
[§]6.4.1.
Appreciation and Depreciation
124
[§]6.4.2.
Corporate Securities
125
[§]6.4.3.
Interest on Legacies
127
[§]6.5.
Exoneration
128
[§]6.6.
Abatement
129
[§]6.7.
Tax Apportionment
131
ch. 7
Changing Circumstances After Will Execution---Persons
133
[§]7.1.
Marriage of Testator
133
[§]7.1.1.
Common Law Marital Property States
133
[§]7.1.1.1.
Historical Background
133
[§]7.1.1.2.
Modern Law---The Forced or Elective Share
134
[§]7.1.2.
Community Property Marital Property States
136
[§]7.1.3.
Change in Domicile
136
[§]7.2.
Divorce of Testator
138
[§]7.3.
Pretermitted Heirs
141
[§]7.3.1.
Defined
141
[§]7.3.2.
Excluded Situations
143
[§]7.3.3.
Determination of Share
144
[§]7.4.
Death of Beneficiary---Lapse
145
[§]7.4.1.
Situations Causing Lapse
145
[§]7.4.2.
Distribution of Lapsed Gifts---Generally
145
[§]7.4.3.
Anti-Lapse Statutes
145
[§]7.4.4.
Partial Lapse in Residuary Clause
147
[§]7.5.
Failure of Charitable Gift---Cy Pres
148
[§]7.6.
Survival
149
ch. 8
Revocation of Wills
153
[§]8.1.
Revocation by Operation of Law
153
[§]8.1.1.
Marriage of Testator
154
[§]8.1.2.
Divorce of Testator
154
[§]8.1.3.
Pretermitted Heirs
154
[§]8.1.4.
Death of Beneficiary
154
[§]8.1.5.
Beneficiary Killed Testator
155
[§]8.1.6.
Alienation
155
[§]8.1.7.
Elapse of Time
155
[§]8.1.8.
Change in Feelings Toward Beneficiary
156
[§]8.2.
Revocation by Physical Act
156
[§]8.2.1.
Requirements
156
[§]8.2.1.1.
Capacity
157
[§]8.2.1.2.
Intent
158
[§]8.2.1.3.
Physical Act
158
[§]8.2.1.4.
Concurrence of Capacity, Intent, and Physical Act
160
[§]8.2.2.
Partial Revocation
161
[§]8.3.
Revocation by Subsequent Writing
163
[§]8.3.1.
Express Revocation
163
[§]8.3.2.
Revocation by Inconsistency
164
[§]8.3.3.
New Will or Codicil?
164
[§]8.4.
Presumptions
165
[§]8.4.1.
The Presumption of Nonrevocation
165
[§]8.4.2.
The Presumption of Revocation
166
[§]8.5.
Revival
167
[§]8.6.
Conditional Revocation
168
[§]8.6.1.
Express Condition
168
[§]8.6.2.
Implied Condition---Dependent Relative Revocation
168
[§]8.7.
Multiple Originals
172
ch. 9
Interpretation and Construction
173
[§]9.1.
Ambiguity
175
[§]9.1.1.
Patent (Obvious) Ambiguity
175
[§]9.1.2.
Latent (Hidden) Ambiguity
177
[§]9.1.3.
No Apparent Ambiguity
178
[§]9.2.
Integration
180
[§]9.2.1.
External Integration
180
[§]9.2.2.
Internal Integration
180
[§]9.3.
Incorporation by Reference
181
[§]9.3.1.
Requirements
181
[§]9.3.2.
Validity of Incorporated Writing
183
[§]9.3.3.
Republication
185
[§]9.4.
Facts of Independent Significance
186
[§]9.5.
Tangible Personal Property Document
190
[§]9.6.
Pour-Over Provisions
191
[§]9.7.
Precatory Language
194
[§]9.8.
Class Gifts
196
[§]9.8.1.
Defined
196
[§]9.8.2.
Time at Which Class Membership Determined
196
[§]9.8.3.
Types of Individuals Included in Classes
198
[§]9.9.
Dead Person's Statute
199
ch. 10
Will Contests
201
[§]10.1.
Failure to Satisfy Requirements of a Valid Will
202
[§]10.2.
Insane Delusions
203
[§]10.2.1.
Defined
203
[§]10.2.2.
Nexus Between Delusion and Will
204
[§]10.3.
Undue Influence
206
[§]10.3.1.
Defined
206
[§]10.3.2.
Demonstrating Undue Influence
208
[§]10.3.2.1.
Direct Evidence
208
[§]10.3.2.2.
Circumstantial Evidence
208
[§]10.3.3.
Attorney as Will Drafter and Beneficiary
210
[§]10.3.3.1.
Loss of Gift
210
[§]10.3.3.2.
Loss of Law License
210
[§]10.3.4.
Mortmain Statutes and Charitable Gifts
212
[§]10.4.
Duress
213
[§]10.5.
Fraud
214
[§]10.5.1.
Defined
214
[§]10.5.2.
Fraud in the Execution
215
[§]10.5.3.
Fraud in the Inducement
216
[§]10.6.
Mistake
217
[§]10.6.1.
Defined
217
[§]10.6.2.
Mistake in the Execution
217
[§]10.6.3.
Mistake in the Inducement
219
[§]10.7.
Remedies
219
[§]10.8.
Preventing Will Contests
220
[§]10.8.1.
No-Contest Provision
220
[§]10.8.2.
Statement of Reasons for Disposition
223
[§]10.8.3.
Mean-Spirited Language
224
[§]10.8.4.
Holographic Will
224
[§]10.8.5.
Affidavit Acquisition
225
[§]10.8.6.
Transaction Documentation
225
[§]10.8.7.
Evidence Preservation
226
[§]10.8.8.
Video-Record of the Will Execution Ceremony
226
[§]10.8.9.
Preservation of Prior Will
227
[§]10.8.10.
Repeated Wills
227
[§]10.8.11.
Traditional Disposition
227
[§]10.8.12.
Nonprobate Transfers
228
[§]10.8.13.
Simultaneous Gift to Heir
228
[§]10.8.14.
Contract Not to Contest
228
[§]10.8.15.
Ante-Mortem Probate
228
[§]10.8.16.
Family Settlement Agreement
230
[§]10.9.
Tortious Interference with Expectancy
230
ch. 11
Other Will Issues
233
[§]11.1.
Conditional Wills
233
[§]11.2.
Conditional Gifts
235
[§]11.3.
Combination Wills
238
[§]11.3.1.
Joint Wills
238
[§]11.3.2.
Reciprocal or Mutual Wills
238
[§]11.3.3.
Contractual Wills
239
[§]11.4.
Election Will
242
[§]11.5.
Disclaimer
244
pt. III
ESTATE ADMINISTRATION
245
ch. 12
Estate Administration
247
[§]12.1.
Proper Applicant
247
[§]12.2.
Locate Will
248
[§]12.3.
Prepare Application
248
[§]12.4.
File in Appropriate Court
249
[§]12.5.
Citation
249
[§]12.6.
Probate of Will or Determination of Heirs
250
[§]12.7.
Type of Administration
251
[§]12.8.
Appointment of Personal Representative
251
[§]12.9.
Qualification of Personal Representative
256
[§]12.9.1.
Oath of Office
256
[§]12.9.2.
Bond
257
[§]12.10.
Issuance of Letters
257
[§]12.11.
Collect and Protect Decedent's Probate Assets
258
[§]12.12.
Manage Decedent's Probate Assets
258
[§]12.13.
Inventory and Appraisement
259
[§]12.14.
Protect Certain Property from Creditors
259
[§]12.14.1.
Homestead
260
[§]12.14.1.1.
Creditor Protection
260
[§]12.14.1.2.
Occupancy Rights
260
[§]12.14.2.
Exempt Personal Property
261
[§]12.14.3.
Family Allowance
261
[§]12.14.4.
Waiver of Protections
261
[§]12.15.
Notice to Creditors
262
[§]12.16.
Pay Creditors
262
[§]12.17.
Provide Reports and Accountings
263
[§]12.18.
Distribution and Closing Estate
263
pt. IV
NONPROBATE TRANSFERS
265
ch. 13
Reasons People Use Nonprobate Transfers
267
[§]13.1.
Provide Non-Estate Planning Benefits
267
[§]13.2.
Accelerate Asset Distribution
268
[§]13.3.
Reduce Estate Planning and Administration Expenses
269
[§]13.4.
Enhance Confidentiality
270
[§]13.5.
Minimize Taxes
270
[§]13.6.
Retain Flexibility
270
[§]13.7.
Change with Less Difficulty
271
[§]13.8.
Protect from Creditors
271
[§]13.9.
Isolate from Contest
272
[§]13.10.
Increase Understandability
272
ch. 14
Inter Vivos Transfers
273
[§]14.1.
Outright Inter Vivos Gifts
273
[§]14.1.1.
Elements
273
[§]14.1.2.
Potential Benefits
280
[§]14.1.3.
Potential Disadvantages
280
[§]14.2.
Gifts Causa Mortis
281
[§]14.3.
Gifts in Trust
283
[§]14.4.
Transfers of Future Interests
283
[§]14.5.
Powers of Appointment
286
[§]14.6.
Transfers to Minors
288
ch. 15
Co-Ownership of Property
291
[§]15.1.
Tenancy in Common
291
[§]15.2.
Joint Tenancy
292
[§]15.3.
Tenancy by the Entirety
296
[§]15.4.
Community Property
297
ch. 16
Multiple-Party Accounts
299
[§]16.1.
Joint Accounts
299
[§]16.1.1.
Rights During Lifetime of All Parties
300
[§]16.1.1.1.
Ownership Rights
300
[§]16.1.1.2.
Withdrawal Rights
300
[§]16.1.2.
Rights after Death of a Depositor
301
[§]16.1.2.1.
Ownership Rights
301
[§]16.1.2.2.
Withdrawal Rights
301
[§]16.2.
Agency or Convenience Accounts
303
[§]16.3.
Payable on Death Accounts
303
[§]16.4.
Trust Accounts
306
[§]16.5.
Other Multiple-Party Account Issues
306
[§]16.5.1.
Ability to Alter Contract by Will
306
[§]16.5.2.
Creditors
307
[§]16.5.3.
Divorce
307
[§]16.5.4.
Survival
307
[§]16.5.5.
Effect of Depositor's Incapacity
307
[§]16.5.6.
Practical Note
308
ch. 17
Contracts
309
[§]17.1.
Life Insurance
310
[§]17.1.1.
Basic Operation of Life Insurance Policy
310
[§]17.1.2.
Use of Life Insurance
310
[§]17.1.3.
Types of Life Insurance
311
[§]17.1.3.1.
Term Life Insurance
311
[§]17.1.3.2.
Whole Life Insurance
311
[§]17.1.3.3.
Universal Life Insurance
312
[§]17.1.3.4.
Endowment Life Insurance
312
[§]17.1.3.5.
Split Dollar Life Insurance
312
[§]17.1.4.
Payment of Proceeds
312
[§]17.1.5.
Policies Insuring Two Lives
315
[§]17.2.
Annuities
315
[§]17.3.
Employee Benefit and Retirement Plans
316
[§]17.3.1.
Types of Employee Benefit Plans
317
[§]17.3.2.
Protection of Surviving Spouse
318
[§]17.4.
Transfer on Death Arrangements
318
pt. V
TRUSTS
321
ch. 18
Introduction to Trusts
323
[§]18.1.
Overview and Terminology
323
[§]18.1.1.
Basic Trust Operation
323
[§]18.1.2.
Parties Involved in Trust Relationship
324
[§]18.2.
Purposes and Uses of Trusts
325
[§]18.2.1.
Provide for and Protect Beneficiaries
325
[§]18.2.1.1.
Minors
325
[§]18.2.1.2.
Individuals Who Lack Management Skills
325
[§]18.2.1.3.
Spendthrifts
326
[§]18.2.1.4.
Persons Susceptible to Influence
326
[§]18.2.2.
Flexible Distribution of Assets
326
[§]18.2.3.
Protection Against Settlor's Incompetence
326
[§]18.2.4.
Professional Management of Property
327
[§]18.2.5.
Probate Avoidance
327
[§]18.2.6.
Tax Benefits
328
[§]18.2.7.
Avoid Conflicts of Interest
328
[§]18.3.
Warning About Inter Vivos Trust Over-Promotion
328
ch. 19
Trust Creation
331
[§]19.1.
Trust Intent
332
[§]19.1.1.
Ascertaining Settlor's Intent
332
[§]19.1.2.
Statute of Uses
335
[§]19.1.3.
Split of Title and Merger
336
[§]19.1.3.1.
Initial Trust Creation
336
[§]19.1.3.2.
Subsequent Events
338
[§]19.1.3.3.
Anti-Merger Movement
340
[§]19.1.4.
Distinguishing Trusts from Other Legal Relationships
340
[§]19.1.4.1.
Agency
340
[§]19.1.4.2.
Bailment
341
[§]19.1.4.3.
Condition Subsequent
341
[§]19.1.4.4.
Custodianship
342
[§]19.1.4.5.
Debt
342
[§]19.1.4.6.
Equitable Charge
343
[§]19.1.4.7.
Guardianship
343
[§]19.1.4.8.
Personal Representative of Decedent's Estate
344
[§]19.1.4.9.
Power of Appointment
344
[§]19.1.4.10.
Security Arrangements
345
[§]19.2.
Methods of Trust Creation
345
[§]19.2.1.
During the Settlor's Lifetime
346
[§]19.2.1.1.
Declaration of Trust
346
[§]19.2.1.2.
Transfer in Trust
346
[§]19.2.2.
Upon the Settlor's Death
346
[§]19.2.3.
Consideration
346
[§]19.2.3.1.
Trust Already Created
346
[§]19.2.3.2.
Promise to Create a Trust
347
[§]19.2.3.3.
Promise as Trust Property
348
[§]19.3.
The Settlor
348
[§]19.3.1.
Capacity
349
[§]19.3.2.
Retention of Powers
349
[§]19.4.
Statute of Frauds
351
[§]19.4.1.
When Writing Required
351
[§]19.4.2.
Common Exceptions to Writing Requirement
353
[§]19.4.2.1.
Personal Property
353
[§]19.4.2.2.
Part Performance
353
[§]19.4.2.3.
Conveyance Induced by Evil Conduct
354
[§]19.4.3.
Standing to Raise Statute of Frauds Defense
354
[§]19.4.4.
Effect of Statute of Frauds Violation
355
[§]19.4.5.
Acknowledgment
356
[§]19.5.
Trust Purposes
357
[§]19.5.1.
Determination of Validity of Purpose
357
[§]19.5.2.
Remedies for Illegal Trusts
360
[§]19.6.
Trust Property
361
[§]19.6.1.
Types of Trust Property
361
[§]19.6.2.
Transfer of Property to Trust
363
[§]19.7.
The Trustee
364
[§]19.7.1.
Capacity
364
[§]19.7.2.
Acceptance
365
[§]19.7.3.
Qualification
366
[§]19.7.3.1.
Oath of Office
366
[§]19.7.3.2.
Bond
366
[§]19.7.4.
Multiple Trustees
367
[§]19.7.5.
Successor Trustees
368
[§]19.7.6.
Resignation
368
[§]19.7.7.
Effect of Holding Legal Title
369
[§]19.7.8.
Trust Protectors
369
[§]19.8.
The Beneficiary
370
[§]19.8.1.
Capacity
370
[§]19.8.2.
Adequacy of Beneficiary Designation
370
[§]19.8.3.
Honorary Trusts
372
[§]19.8.4.
Incidental Beneficiaries
373
[§]19.8.5.
Disclaimer
374
[§]19.8.6.
Transfers and Assignments of Beneficial Interests
374
[§]19.8.7.
Availability of Beneficiary's Interest to Creditors
375
[§]19.8.8.
Spendthrift Restrictions
376
[§]19.8.9.
Discretionary Provisions
381
[§]19.8.10.
Support Provisions
384
[§]19.8.11.
Pour-Over Provisions
386
[§]19.8.12.
Life Insurance Trusts
387
[§]19.9.
Rule Against Perpetuities
389
[§]19.10.
Charitable Trusts
392
[§]19.10.1.
Size of Charitable Class
393
[§]19.10.2.
Description of Charitable Class
395
[§]19.10.3.
Determination of Charitable Purpose
395
[§]19.10.4.
Other Charitable Trust Issues
398
[§]19.10.4.1.
Mortmain Statutes
398
[§]19.10.4.2.
Rule Against Perpetuities
398
[§]19.10.4.3.
Enforcement
398
[§]19.10.4.4.
Tax Benefits
398
[§]19.10.4.5.
Cy Pres
398
[§]19.10.4.6.
Split Interest Trusts
399
ch. 20
Trust Administration
401
[§]20.1.
Overview of Trust Administration
401
[§]20.1.1.
Accept Trusteeship
401
[§]20.1.2.
Post Bond
402
[§]20.1.3.
Register Trust
402
[§]20.1.4.
Possess and Safeguard Trust Property
402
[§]20.1.4.1.
Earmark Trust Property
402
[§]20.1.4.2.
Avoid Commingling
404
[§]20.1.5.
Identify and Locate Beneficiaries
405
[§]20.1.6.
Follow Settlor's Instructions
405
[§]20.1.7.
Act as Fiduciary
405
[§]20.1.8.
Support and Defend Trust
405
[§]20.2.
Trust Investments and Standard of Care
406
[§]20.2.1.
Selection of Investments
406
[§]20.2.1.1.
Statutory "Legal" List
406
[§]20.2.1.2.
Prudent Person Standard
407
[§]20.2.1.3.
Prudent Investor or Portfolio Standard
408
[§]20.2.1.4.
Noneconomic Considerations
411
[§]20.2.2.
Duty to Diversify
412
[§]20.2.3.
Exculpatory Clauses
413
[§]20.2.4.
Directory Provision
414
[§]20.2.5.
Duty to Review Investments
415
[§]20.3.
Trustee Powers
415
[§]20.3.1.
Sources of Powers
416
[§]20.3.1.1.
Trust Instrument
416
[§]20.3.1.2.
State Statutes
416
[§]20.3.1.3.
Implied by Circumstances
417
[§]20.3.1.4.
Court Order
418
[§]20.3.2.
Delegation of Powers
418
[§]20.4.
Trust Distributions
421
[§]20.4.1.
Standard of Care
421
[§]20.4.2.
Competent Adult Beneficiary
422
[§]20.4.3.
Minor or Incapacitated Beneficiary
422
[§]20.5.
Duty of Loyalty
423
[§]20.5.1.
Buying and Selling Trust Property
423
[§]20.5.2.
Borrowing Trust Property
424
[§]20.5.3.
Purchase of Common Investments
425
[§]20.5.4.
Transfers Between Trusts
426
[§]20.5.5.
Dealings with Beneficiaries
426
[§]20.5.6.
Self-Employment
426
[§]20.5.7.
Ramifications of Breach of Loyalty Duties
427
[§]20.5.7.1.
Self-Dealing
427
[§]20.5.7.2.
Conflict of Interest
428
[§]20.5.8.
Permitted Self-Dealing
428
[§]20.5.9.
Loyalty and Investment Duties Compared and Contrasted
429
[§]20.6.
Liability of Trustee to Third Parties
429
[§]20.6.1.
Contract Liability
429
[§]20.6.2.
Tort Liability
432
[§]20.6.3.
Liability as Property Owner
434
[§]20.7.
Allocation of Receipts and Expenses
435
[§]20.7.1.
General Allocation Rules
436
[§]20.7.2.
Corporate Distributions
438
[§]20.7.3.
Wasting Assets
439
[§]20.7.3.1.
Mineral Property
439
[§]20.7.3.2.
Timber
440
[§]20.7.3.3.
Liquidating Assets
441
[§]20.7.4.
Business and Farming Operations
441
[§]20.7.5.
Bond Premiums and Discounts
442
[§]20.7.6.
Underproductive Property
443
[§]20.7.7.
Rights of Income Beneficiaries
443
[§]20.7.8.
Apportionment of Income Among Beneficiaries
445
[§]20.7.9.
Allocation of Expenses
446
[§]20.7.10.
Unitrust Approach
446
[§]20.8.
Accountings
447
[§]20.9.
Compensation
449
[§]20.10.
Trust Modifications
451
[§]20.10.1.
By Court
451
[§]20.10.1.1.
Deviation
451
[§]20.10.1.2.
Cy Pres
453
[§]20.10.2.
By Parties
454
[§]20.10.2.1.
Settlor
454
[§]20.10.2.2.
Trustee
454
[§]20.10.2.3.
Beneficiaries
454
[§]20.10.2.4.
Family Settlement Doctrine
455
[§]20.11.
Trust Termination
455
[§]20.11.1.
Express Terms of Trust
456
[§]20.11.2.
Revocation by Settlor
456
[§]20.11.3.
Termination by Beneficiaries
456
[§]20.11.4.
Merger
458
[§]20.11.5.
Lack of Property
458
[§]20.11.6.
Uneconomic to Continue Trust
458
[§]20.11.7.
Court Order
459
[§]20.11.8.
Duties of Trustee upon Termination
459
[§]20.12.
Reformation
459
ch. 21
Trust Enforcement
461
[§]21.1.
Procedural Matters
461
[§]21.1.1.
Standing
461
[§]21.1.2.
Jurisdiction and Venue
462
[§]21.1.3.
Virtual Representation
462
[§]21.2.
Remedies Against the Trustee
463
[§]21.2.1.
Money Damages
463
[§]21.2.2.
Removal of Trustee
465
[§]21.2.3.
Pre-Breach Remedies
467
[§]21.2.3.1.
Decree to Carry Out the Trust
467
[§]21.2.3.2.
Injunction
467
[§]21.2.3.3.
Appointment of Receiver
467
[§]21.2.3.4.
Increase Bond
468
[§]21.2.3.5.
Declaratory Judgment
468
[§]21.2.4.
Criminal Sanctions
468
[§]21.2.5.
Damages in Absence of Breach
468
[§]21.3.
Remedies Involving Trust Property
469
[§]21.3.1.
Tracing
469
[§]21.3.2.
Subrogation
472
[§]21.3.3.
Marshalling
472
[§]21.3.4.
Bona Fide Purchasers
473
[§]21.4.
Remedies Against the Beneficiary
474
[§]21.5.
Causes of Action Against Third Parties
474
[§]21.6.
Barring of Remedies
475
[§]21.6.1.
Settlor's Approval in Trust Instrument
475
[§]21.6.2.
Prior Approval or Ratification by Beneficiary
475
[§]21.6.3.
Court Decree
478
[§]21.6.4.
Statute of Limitations
478
[§]21.6.5.
Laches
479
ch. 22
Resulting Trusts
481
[§]22.1.
Failure to Create Express Trust
482
[§]22.2.
Failure of Express Trust to Dispose of All Trust Property
483
[§]22.3.
Purchase-Money Resulting Trust
484
ch. 23
Constructive Trusts
487
[§]23.1.
Fraudulent Conduct
488
[§]23.2.
Abuse of Confidential Relationships
490
[§]23.3.
Unperformed Promises Made in Contemplation of Death
491
pt. VI
OTHER ESTATE PLANNING CONCERNS
493
ch. 24
Wealth Transfer Taxation
495
[§]24.1.
Federal Gift Tax
496
[§]24.1.1.
Overview
496
[§]24.1.2.
Transfers Subject to Gift Tax
497
[§]24.1.3.
Valuation of Gifts
504
[§]24.1.4.
Exclusions
507
[§]24.1.4.1.
Annual Exclusion
507
[§]24.1.4.2.
Educational and Medical Expense Exclusion
512
[§]24.1.5.
Deductions
513
[§]24.1.5.1.
Marital Deduction
513
[§]24.1.5.2.
Charitable Deduction
514
[§]24.1.6.
Computation of Gift Tax
514
[§]24.1.6.1.
Tentative Tax
514
[§]24.1.6.2.
Applicable Credit Amount
515
[§]24.1.7.
Split Gifts
516
[§]24.1.8.
Gift Tax Return
518
[§]24.1.9.
Liability for Gift Tax
519
[§]24.2.
Federal Estate Tax
520
[§]24.2.1.
Overview
520
[§]24.2.2.
Contents of Gross Estate
521
[§]24.2.2.1.
Probate Assets
521
[§]24.2.2.2.
Property Held in Joint Tenancy with Rights of Survivorship
523
[§]24.2.2.2.1.
Non-Spousal Joint Tenant
524
[§]24.2.2.2.2.
Spouses as Joint Tenants
525
[§]24.2.2.3.
Annuities and Other Death Benefits
526
[§]24.2.2.4.
Proceeds of Life Insurance
527
[§]24.2.2.5.
Transfers with Retained Life Estate or Control of Beneficial Interests
528
[§]24.2.2.6.
Revocable Transfers
530
[§]24.2.2.7.
Transfers with Retained Reversionary Interest
531
[§]24.2.2.8.
Certain Transfers Within Three Years of Death
531
[§]24.2.2.9.
Powers of Appointment
533
[§]24.2.2.10.
Q-TIP Property
534
[§]24.2.2.11.
Qualified Family-Owned Business Exclusion
535
[§]24.2.3.
Valuation of Gross Estate
536
[§]24.2.3.1.
General Principles
536
[§]24.2.3.2.
Discounts
537
[§]24.2.3.3.
Special Use Valuation
537
[§]24.2.3.4.
Alternate Valuation Date
538
[§]24.2.4.
Deductions
538
[§]24.2.4.1.
Marital Deduction
538
[§]24.2.4.2.
Charitable Deduction
538
[§]24.2.4.3.
Deduction for Expenses, Debts, and Taxes
539
[§]24.2.4.4.
Deduction for Losses
540
[§]24.2.4.5.
State Death Tax Deduction
540
[§]24.2.5.
Computation of Estate Tax
541
[§]24.2.5.1.
Tax Base
541
[§]24.2.5.2.
Tentative Tax
541
[§]24.2.5.3.
Estate Tax Credits and Related Adjustments
541
[§]24.2.5.3.1.
Adjustment for Gift Taxes
541
[§]24.2.5.3.2.
Applicable Credit Amount
542
[§]24.2.5.3.3.
State Death Tax Credit
542
[§]24.2.5.3.4.
Previously Taxed Property Credit
545
[§]24.2.5.3.5.
Other Estate Tax Credits
545
[§]24.2.6.
Estate Tax Return
546
[§]24.2.7.
Liability for Estate Tax
546
[§]24.3.
Marital Deduction and Bypass Planning
546
[§]24.3.1.
Transfers Qualifying for the Marital Deduction
547
[§]24.3.1.1.
Outright Gifts
547
[§]24.3.1.2.
Qualified Terminable Interest Property Trust
548
[§]24.3.1.3.
Power of Appointment Trust
549
[§]24.3.1.4.
Estate Trust
550
[§]24.3.1.5.
Qualified Domestic Trust
551
[§]24.3.2.
Sheltering the Applicable Exclusion Amount
551
[§]24.4.
Charitable Deduction
555
[§]24.4.1.
Non-Split Transfers
555
[§]24.4.2.
Split Transfers
556
[§]24.4.2.1.
Remainder Interest to Charity
556
[§]24.4.2.1.1.
Charitable Remainder Annuity Trust
556
[§]24.4.2.1.2.
Charitable Remainder Unitrust
557
[§]24.4.2.1.3.
Pooled Income Fund
558
[§]24.4.2.2.
Present Interest to Charity
558
[§]24.5.
Federal Generation-Skipping Transfer Tax
558
[§]24.5.1.
Skip Person Defined
559
[§]24.5.2.
Transfers Subject to GST Tax
561
[§]24.5.2.1.
Direct Skip
561
[§]24.5.2.2.
Taxable Termination
562
[§]24.5.2.3.
Taxable Distribution
563
[§]24.5.3.
Exemptions and Exclusions
563
[§]24.5.3.1.
Annual Exclusion
563
[§]24.5.3.2.
Educational and Medical Expense Exclusion
563
[§]24.5.3.3.
Lifetime Exemption
564
[§]24.6.
Federal Income Tax Ramifications of Gratuitous Transfers
564
[§]24.6.1.
Inter Vivos Gifts
565
[§]24.6.2.
At-Death Gifts
566
[§]24.6.3.
Planning Suggestions
569
[§]24.7.
State Wealth Transfer Taxation
570
[§]24.7.1.
Inter Vivos Transfers
570
[§]24.7.2.
At-Death Transfers
570
ch. 25
Disability and Death Planning
573
[§]25.1.
Property Management
574
[§]25.1.1.
Durable Power of Attorney for Property Management
574
[§]25.1.2.
Custodial Trusts
579
[§]25.1.3.
Self-Designation of Guardian of Estate or Conservator
581
[§]25.1.4.
Disability Income Insurance
582
[§]25.2.
Health Care
583
[§]25.2.1.
Durable Power of Attorney for Health Care or Medical Power of Attorney
584
[§]25.2.2.
Self-Designation of Guardian of Person
587
[§]25.2.3.
Funding Long-Term Health Care Expenses
588
[§]25.2.3.1.
Patient's Personal Resources
588
[§]25.2.3.2.
Long-Term Care Insurance
588
[§]25.2.3.3.
Accelerated Life Insurance Payments and Viatical Settlements
589
[§]25.2.3.4.
Home Care Contracts
591
[§]25.2.3.5.
Governmental Assistance
591
[§]25.3.
The Death Event
593
[§]25.3.1.
Living Wills
594
[§]25.3.2.
Assisted Suicide
596
[§]25.3.3.
Anatomical Gifts
597
[§]25.3.4.
Disposition of Body
600
ch. 26
Malpractice and Professional Responsibility
603
[§]26.1.
Professional Negligence
603
[§]26.2.
Ethical Concerns
606
[§]26.2.1.
Drafting Attorney as Beneficiary
606
[§]26.2.2.
Drafting Attorney as Fiduciary
606
[§]26.2.3.
Drafting Attorney as Fiduciary's Attorney
607
[§]26.2.4.
Drafting Attorney as Will Custodian
608
[§]26.2.5.
Estate Planning for Both Spouses
608
[§]26.2.6.
Representation of Non-Spousal Relatives
610
[§]26.2.7.
Fiduciary Hiring Self as Attorney
610
[§]26.2.8.
Capacity of Representation
610
Comprehensive Examples and Explanations
613
1.
Intestate Succession
613
2.
Intestacy and Wills
615
3.
Wills-Validity and Property Distribution
617
4.
Wills-Construction and Property Distribution
620
5.
Trust Creation
621
6.
Trust Administration and Enforcement
624
Sample Will with Testamentary Trust Form
627
Bibliography
645
Table of Uniform Probate Code (UPC) Provisions
647
Table of Uniform Trust Code (UTC) Provisions
649
Table of Internal Revenue Code (IRC) Provisions
651
Index
653