Wills and Trusts Professor Jenkins

“In Terrorem” Clause  “A beneficiary shall forfeit his bequest under the will if he contests the validity of the will.”  Rule: Is valid in Texas, but will not apply to an attack on the will that is based on reasonable grounds and instituted in good faith.

Property Destruction Orders Under the Will  Court Will:  Weigh social utility of destruction against loss to society of valuable resource.  Weigh motivation of testator.

Probate Process  Probate or administration of estate of living person-VOID.  Probate of one believed to be dead proved by circumstantial evidence 44 year statute of limitations (unless proof that party was not in default-muniment of title only) PProbate of Lost Will Date of execution Executor

Proof Required  Person is deceased.  4 years have not elapsed since date of death.  Court has jurisdiction and venue.  Person applying for “letters” is qualified.

Venue  First sought in primary or domiciliary jurisdiction (where decedent was domiciled at time of death).

Intestacy- Statutes of Descent Descent and Distribution Section 45-Community Property Disposition of Whole Community

Real Estate  Married-No Kids -  All TO SS  Married W/Kids of Surviving Spouse-  ALL TO SS  Married-Kids not Kids of Surviving Spouse-  1/2 SS & 1/2 KIDS

Other Property  Married-No Kids-  ALL TO SS  Married W/Kids of Surviving Spouse-  ALL TO SS  Married –Kids not Kids of Surviving Spouse-  ½ SS & ½ Kids

Separate Property Probate Section 38(a)

Real Estate  Unmarried-W/Kids To Kids equally per stirpes  Unmarried-No Kids ½ to MOM & ½ to DAD (or brothers and sisters in place)

Other Property  Unmarried W/Kids To Kids equally per stirpes  Unmarried No Kids ½ to MOM & ½ to DAD

Real Estate  Married w/ Kids 2/3 to kids equally 1/3 SS for life

Real Estate Married – No Kids ¼ to MOM ½ to SS ¼ to DAD

Other Property  Married W/Kids 2/3 to Kids Equally 1/3 SS

Other Property  Married-No Kids ALL TO SS

Half Blood Section 41 S Half 1/5 A (Decedent) B, D Whole 2/5, 2/5

Will Execution-Section 57  Who may execute? One who is over 18 years (or married or a member of the armed forces). Of sound mind

 Nature & Extent of his/her property.  Persons who are “natural objects of her bounty.”  The disposition being made.  How these elements relate to form an orderly plan for distribution.  These only set the stage

Testator must have mind & memory relevant to all the things AND Must understand the significance of her acts!

ACTS Direct Bearing on Testamentary Act Other Factors Relate To Time Of Execution

Insane Delusion  Delusion- false conception of reality  Insane Delusion- false conception of reality to which testator adheres against all reason and evidence to the contrary

Execution by Interested Witness TX Section 62 “Purging” Statute  A bequest to subscribing witness shall not be void if his testimony proving the will is corroborated by… ONE OR MORE DISINTERESTED and CREDIBLE PERSONS.  Anyone present at the execution.

Section 61  If no corroboration, and intestacy occurs, interested subscribing witness takes. LESSER OF WILL SHARE OR INTESTATE SHARE.

Will Revocation Intent & Capacity Required Section 63  By subsequent Will Codicil Declaration in writing, executed with like formalities  By T Destroying Canceling Or causing it to be done in his presence

DRR Doctrine of Dependent Relative Revocation & Revival  Allows court to disregard a revocation based on a mistake of law or fact.  TEXAS “No Revival of a Revoked Will”  JURISDICTION

SIMILAR PROVISIONS WILL 1 10,000 to A Gold watch to B House to C $5,000 to D $3,000 to E Residuary to X WILL 2 15,000 to A Gold watch to B House to C Residuary to X

 IN TEXAS, IF T DESTROYS WILL # 2 THINKING HE IS REVIVING WILL # 1, COURT WILL REVIVE WILL #2 UNDER DRR.

NO partial revocation by physical act in Texas If will is not found - Presumption of revocation by physical act.

Integration  Asks: Which pages the time of signing comprise T’s duly executed will?  Look for: internal continuity staples.

Republication By Codicil An implied restatement or rewriting of the language of a valid will as of the date of the codicil.

Incorporation By Reference  Applies only when instruments that NEVER HAD testamentary life are incorporated into a will and given TESTAMENTARY EFFECT 1. Will must refer to writing IN EXISTENCE with reasonable certainty. 2. Will description corresponds to description and was the one intended by T.

A Devise of Contents: Section 58 (d) (1)  Does mean tangible, personal property  Does not include tangibles, choses in action, “titled” personal property represented by a certificate of ownership requires a formal title transfer.  Caveat: One must expect to find item in such a location.

Example  WILL STATES “I leave the contents of my iron chest to Mary.” At death, the chest contains: a) Passbook with $5,000 showing on deposit b) $5,000 c) Automobile title to antique Mercedes Benz d) Diamond tiara worth $1,000,000

Joint Will The wills of 2 or more individuals in one instrument

Reciprocal Wills Separate reciprocal wills which mirror each other.

Mutual Wills Joint or reciprocal wills based on a contract between testators.

Contractual Wills  Two Types Contract Not Revoke Contract To Will  TX: Section 59 A State a contracts exists Contain material provisions of the contract  (Contract may be incorporated by reference into the will if all elements are met)

BASIS OF CONTRACT  Survivor will not revoke  Contract Law Applies Then Wills Law Applies  Remedy: Constructive Trust

Ambiguities Latent Does not appear on face of instrument. Patent Appears on face of instrument. Extrinsic Evidence freely received to determine intent.

Ambiguities  WILL  I leave $6,000 to my nephew Ben.  WILL  I leave my beach home in Kemah as follows:  25% to Ben  25% to Jerry  50% to Bartles  25% to James There are 2 nephews named Ben.

TRUST  A fiduciary relationship in which one person is the holder of legal title to property subject to an equitable obligation to keep or use the property for the benefit of another.

SETTLOR Trustor Donor Grantor

RES  TRUST PROPERTY  SUBJECT MATTER  CORPUS  PRINCIPAL

TRUSTEE (legal title)  FOR  BENEFICIARY (Equitable Title) “Cestui Que Trust”

Settlor Trustee For benefit of Beneficiary Res RES

Requirement to Create Valid Private Trust  1. Expression of Intent  2. At least one beneficiary  3. Property interest in existence or ascertainable

A TRUST WILL NOT FAIL FOR WANT OF TRUSTEE – THE COURT WILL APPOINT ONE

Delivery  Constructive- gives donee means of obtaining the object (e.g. a Key)  Symbolic- gives donee something symbolic of the actual object (e.g. written instrument)  When manual delivery is difficult or impractical

Resulting Trust  Arises by an operation of law where an express trust FAILS or makes an incomplete disposition.  Outcome?  Takes res back to settlor or settlor’s estate

Power of Appointment TThe right (power) to select (appoint) within prescribed limits who shall receive an interest in property or how various interests in property shall be allocated. PPermits one to dispose of property while postponing or giving to another the authority of disposition.

House to H to leave at his death to one or more of 4 children. If he fails to direct, then to A. “I leave my house to H with power of appointment under his will.”

T’ee to choose among my nephews. T’ee at his discretion. Power of Appt. Semi-secret trust-invalid

Oral Intervivos Trusts of Land are Invalid  Restatement Rule: where the owner of an interest in land transfers it inter vivos to another, but no memorandum properly evidencing intent to create a trust is signed as required by SOF, and the transferee refuses to perform the trust, transferee holds the interest upon the constructive trust for the transferor if the transferee at the time of the transfer was in a confidential relation to the transferor.

Elements to Impose Constructive TRUST Confidential relationship Deed by Donor Oral Agreement to Reconvey Real Property Unjust Enrichment of Transferee

Secret Trust  Will indicates no trust e.g. “I leave $50,000 to Ben” Remedy - constructive trust

Semi-Secret Trust  Will describes a trust but no terms Result – VOID e.g. “I leave $50,000 to Ben to dispose as I have instructed.” Resulting trust

Termination  Claffin Doctrine: A trust may not be terminated by all of the beneficiaries if it would interfere with a material purpose of the settlor.

Charitable Purposes AA) Relief of Poverty BB) Advancement of Education CC) Advancement of Religion DD) Promotion of Health EE) Governmental or Municipal Purposes FF) Other Purposes the Accomplishment of which is Beneficial to the Community.

The Doctrine of Cy Pres  Applies where the purpose of a trust has become Illegal Impossible Permanently impractical of performance

Duty to Study Terms of Trust Instrument

Duty to Take Possession of Trust Property

Duty to Defend Trust Against Attack

DUTY TO EARMARK

Duty To Separate Separate & Earmark Trust Property

Duty to Make Trust Property Productive

Duty to Make Trust Property Productive $$$$$$$$ Conservative, Prudent Investment

Duty of Undivided Loyalty to Beneficiaries

Duty not to Mingle

Duty Not to Mingle Trust Funds With Trustee’s Own Funds

Duty Not to Delegate

Impartiality

Duty of Impartiality in Dealing With Income Beneficiary and Remaindermen

Duty to Retain Trust Documents and Vouchers and Keep Records

Duty to Account to Beneficiaries