Trusts and Wills

  1. Trust Creation
    Trust is an arrangement for management of property, where property is held by trustee for benefit of beneficiary. To have a valid trust, settlor must deliver res to trustee for benefit of beneficiaries with intent to create a trust. Trust must be for lawful purpose
  2. Settlor
    transfers property and forms agreement to create trust
  3. Trustee
    holds legal title to property and owes fiduciary duty to carry out instructions of trustor.

    can be multiple trustees
  4. Beneficiary
    May be 1 or more (required if S is B). Must be ascertainable, or trust must have charitable purpose.
  5. Intent to create trust
    precatory language not enforceable.
  6. Trust property
    must exist at time trust established, and must be delivered to T.
  7. Documentation of Trust
    May be oral, unless incorporated in will or involves real estate.
  8. Express trust
    • inter vivos: set up during S's life
    • testamentary: created in will
  9. Constructive trust
    equitable remedy imposed when 1 holds property that would be unconscionable to retain. Proven with wrongful conduct and unjust enrichment.
  10. Spendthrift Trust
    Cannot be reached by creditors of B. Protection exists only for so long as assets in trust. Once paid, creditors may reach. Creditor cannot force T to exercise discretion.

    • In WA, all trusts are spendthrift unless self-settled.
    • Express: usually protects from voluntary and involuntary alienation.
    • Exceptions: may be reached by claims of child support/ pay necessities
  11. Modification if Settlor Available
    Freely modifiable if S and Bs agree.
  12. Administrative deviation
    If S unavailable, allowed.
  13. Distributive deviation
    If S unavailable, allowed only if consent of all Bs and necessary for trust purpose or pursuant to non-judicial agreement.
  14. Trust Termination
    Only if B all consent, court can order termination only if it would not be contrary to material purpose of S.
  15. TEDRA
    if all parties agree, can enter judgment to modify/terminate, and upon filing agreement with court, agreement takes force of court order.
  16. Removal of Trustee
    Only for cause: serious breach of trust, dishonesty, lack of capacity.
  17. Charitable Trust
    Must have charitable purpose to confer substantial amount of social benefit. Benevolent purpose not enough.

    Can last permanently, enforced by state AG
  18. Cy Pres
    Court can modify trust if grantor had general charitable intent and implementation impractical or impossible
  19. Trustee Duties
    Loyalty, care, no self-dealing (OK only if B ratifies, S allows in instrument...), prudent investor (modern portfolio), diversify, impartiality, segregate and preserve property, delegate responsibly, duty to account and keep informed.
  20. Future Trust Interests
    RAP: 150 years, not 21.
  21. Powers of Appointment
    power to decide who receives certain property at a given point in time. Generally exercisable in favor of donee, estate, creditors, creditors of estate.
  22. Intestacy
    Applies when D left no will (or invalid one), does not make complete disposition, heir successfully challenges on lack of capacity.
  23. Intestacy Generally
    • SS: 100% CP, 50% SP
    • Issue: 50% SP
    • Then: parents, issue of parents, grandparents, issue of grandparents, escheat.
  24. Distribution among Issue
    Modern Per Stirpes. Cut shares at first generational level with living takers, then 1 share per line.
  25. Slayer Statute
    Person causing death or accessory before fact cannot take and will be treated as predeceased (if killing willfull and unlawful).

    Preponderance of the evidence standard
  26. Uniform Simultaneous Death Act
    When title to property depends on order of death and 2 persons have died within 120 hours of each other, each estate treated as through the other predeceased.
  27. Formalities of Execution
    • Signed writing (need not be dated)
    • Attestation by 2 witnesses (T must sign or acknowledge in their presence)
    • Testamentary intent
  28. Witness Competence
    Interested witnesses not invalidating, but raise rebuttable presumption that gift procured through fraud, undue influence. If not rebutted, witness receives intestate share.
  29. Self Proving Affidavit
    attached to will, showing facts that will execution met requirements. W must sign either will or SPA.
  30. Holographic will
    unsigned. not recognized in WA unless executed in state where valid.
  31. Foreign Will
    recognized if valid in state of residence/where signed at time of execution/death
  32. Integration
    defines what constitutes the whole of will. To be part of the will, must be written document, present at execution, intended to be part of will
  33. Incorporation by reference
    Extrinsic document (not present at execution) may be incorporated if written, in existence when executed, referred to in will, and intended to be part of will.
  34. Acts of independent significance
    Possession owned at time of death...
  35. Separate List Disposing of Personal Property
    Must be signed writing, referred to in will, applies to tangible only (not cash), may be amended later, need not be in existence at time will executed.
  36. Will Construction
    • Plain meaning: court will enforce words of will based on plain meaning and not admit extrinsic (except usage)
    • Extrinsic: allowed only to resolve ambiguity
  37. Deadman Statute
    testimony regarding communication with deceased by person interested in outcome of litigation not admissible
  38. Codicil
    amendment to will must be executed w/ same formalities. replaces clauses in underlying will inconsistent with codicil.
  39. Prepayment of expectancies
    Advancement/Satisfaction: presumed gifts unless proof of intent otherwise.
  40. Revocation by physical act
    Intent plus act.
  41. Partial revocation
    OK if that portion is understandable on own and does not result in substantial increase in another's bequest.
  42. Subsequent Instrument
    T may revoke/amend by later doc if executed with same formalities.
  43. Dependent Relative Revocation
    Revoation of will because mistaken belief that alternative disposition is effective and revoked will is closer to T's intent than intestacy.
  44. Will revival
    If will revoked, rebuttable presumption that all prior wills not revived. Presumption may be rebutted with statements of testator.
  45. Missing Will
    presumed revoked if in possession of T at time of death. If not in possession, lost will can only be admitted to probate if contents shown by CCE and must include W's testimony as to validity/content.
  46. Effects of revocation
    revocation of will revokes all codicils. Revocation of codicils revives underling provisions in will (unless contrary to intent)
  47. Effect of Marriage Dissolution
    Final decree automatically removes all gifts to spouse under will, treating spouse as predeceased. Applies to most nonprobate assets.
  48. Encumbrance of Property
    No automatic right to exoneration of lien. Property passes subject to lien. If contract to sell property at time of T's death, beneficiary under contract to sell.
  49. Omitted Spouse
    Applies to spouse married after execution of will. Awards up to intestate share unless otherwise named/provided for in will. Court may eliminate by CCE. Does not affect nonprobate assets.
  50. Omitted Child
    Applies to kid born/adopted after execution of will. Awards up to intestate share unless otherwise named or provided for in will. Court can eliminate/reduce share if CCE of intent to give less.
  51. Homestead
    Surviving spouse may claim as a homestead exemption the $125k or the value of the homestead. If no homestead protection from creditors claimed, SS can claim award in lieu of homestead, equal to homestead exemption from CP or SP
  52. Contracts to make Wills
    Enforceable. Oral OK, though standard of proof high. When conflict, omitted family provisions override.
  53. Nonprobate assets
    Not subject to disposition by will. Includes joint bank accounts, life insurance, CP agreements, property held in trust. Not subject to OS/C statutes or family support. Subject to revocation on divorce.
  54. Superwill
    Nonprobate generally not controlled by terms of will, except joint tenancy or POD bank accounts.
  55. Hierarchy of Gifts
  56. Abatement
    If there is not enough in estate to cover all claims, and no abatement provisions, debts/expenses paid first from intestate, on up.
  57. Ademption
    When specific gift of property made, and property not owned by T at time of death, gift adeems and beneficiary gets nothing. No substitutions of value allowed. Once adeemed, always adeemed.

    Does not apply to uncollected proceeds from installment sales contracts.
  58. Lapse/Anti-Lapse
    When beneficiary predeceases, gift lapses into residue, unless saved by anti-lapse statute.

    If predeceased was descendant of granparent of D and left issue, gift saved for that issue.
  59. Disclaimer
    Heir can disclaim interest in gift in whole/part if given in writing, delivered to personal rep w/i 9 months of creation of interest without acceptance of benefits. Disclaimant treated as predeceased.

    Then determine what disclaimant would have gotten then distribute.
  60. Appointment of Personal Representative
    Testator has power to appoint PR to adminster estate and wind up affairs. Priority: SS, principal beneficiaries, principal creditors.

    Notie of hearing for appointment not required, except that SS is entitled to notice if SS not nominated as PR, estate includes CP, and petition filed w/i 40 days. SS entitled to be PR if qualified and application made w/i 40 days.
  61. Creditor Rights
    If PR publishes notice, creditor must file claim w/i 4 months in order to be paid. Otherwise, all claims must be made w/i 24 months of death. Notice not required.
  62. SOL, standing for will contests
    • 4 months
    • Person w/ direct financial interest in outcome
  63. Testamentary Capacity
    • 18 (no ratification)
    • Able to understand extent of property, must know natural objects of bounty, and must understand nature of testamentary act.
    • Current Testamentary intent
  64. Insane Delusion
    belief contrary to all available evidence that affects terms of will (but for test)
  65. Fraud/Duress
    In execution (didn't know signing will), in inducement. Requires specific lie
  66. Undue Influence
    person subject to and controlled by dominant influence or power. Contestant bears burden to show existence and exertion of influence, effect to overpower mind and will of testator, producing will that would not have been made but for influence.
  67. Evidence of undue influence
    susceptible testator, person w/ disposition to influence, access to influence, confidential relationship (burden shifted to person accused).
  68. Mistake
    generally does not invalidate will
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Trusts and Wills
Trusts and Wills