Class Notes

January 8, 2019

DEFINITIONS
 Will: written legal document designed to dispose of assets upon death.
 Codicil: change to a will
 Legacy: A gift of $
 Heir or Heir at Law: people who will inherit by statute if someone dies intestate
(without a will).
 Beneficiary/Transferee: person’s name under a will.
 Issue: All lineal descendants of the deceased. Who died? Does x have a child?
Do they have children? Etc… NO spouses, siblings or parents!
 Testate: Means there is a will!
 Intestate: X dies without a will
 Deceased: person who dies.

 Levels of Proof:
o Lowest: Prima Facia Evidence
o Pre-ponderous of the Evidence: 51/52%
o Clear & Convincing
o Highest: Beyond a Reasonable Doubt (only in criminal courts not in civil)

Who is a Spouse?
 CA does not recognize CL marriage (from any state). It needs to be a lawful
marriage according to state law!
 RDP: Registered Domestic Partners are treated the same as a surviving spouse.
 Putative Spouse: Assuming 2nd spouse did not know of 1st spouse, he/she is
considered a putative spouse and thus he/she is treated as a surviving spouse in
an intestate death.

Divorce/Dissolution of Marriage: terminates intestate inheritance rights upon entry of

Final Judgment of Dissolution of Marriage.
 But Divorcing spouses can still be intestate spouses, meaning they can still have
rights.
 In CA if the property settlement agreement has been completed and one spouse
dies within the 6 months waiting period then there is no right.
 Legal Separation does NOT terminate the marriage.

 A surviving spouse will not inherent from the deceased spouse’s family intestacy.

January 10, 2019

 2 categories of property:

1. Separate Property: Basic Distribution

 If one issue predeceased (son) the intestate deceased (parent), then
what would have gone to the predeceased issue (son) (goes to any
issue of the predeceased (so the grandchildren) and so on for as many
generations needed.
Single Person Deceased
 The share of a deceased child that can’t be passed down to any issue
of the predeceased child because he/she did not have any, that share
is distributed equally onto the remaining issue of the deceased.
 If no issue, then it goes to the parents. If one parent is predeceased,
then the whole property goes to the surviving parent. If no parent, then
to their issues.
 (1) issue &/or wife; (2) parents; (3) issues of parents (siblings &/or half-
siblings); (4) grandparents (initially look for 4: maternal & paternal); (5)
issue of grandparents (aunts & uncles); (6) issues of aunts & uncles;
(7) predeceased wife (step children); (8) Issues of step children; (9)
great grandparents; (10) issues of great grandparents; (11) great-great
grandparents; (issues of great-great grandparents); (12) in laws; (13)
issues of in laws ….
 If no one then escheat (goes back to the state)
Married Person Deceased:
 2/3 of separate property goes to the children when there are 2 or more
children & 1/3 of the separate property goes to the surviving spouse by
statute.
 If no kids, ½ goes to parents (equally; even if not married; look for 2
parents first) and the other ½ goes to the surviving spouse.
 If no parents, the ½ of the parents goes to the issues of the parents
(aka siblings). Includes half-sisters/brothers or to their offspring’s if one
of the siblings is predeceased. (issues don’t have to come from the
same set of parents as the deceased’s)
 If no issue, no parents and no siblings, then all of the separate property
goes of the surviving spouse.

2. Community Property [Divided when either]

1. Death OR
2. Divorce
 Only married people have community property. So, when 1 spouse dies
in the event the deceased property passes onto the surviving spouse, the
property is no longer community property rather separate property
because she is no longer married.
 Property obtained while married (and by gift/inheritance??)
  In CA, someone survives a deceased when he/she outlived the
deceased by more than 120 hours (5 days). By C&C. If application of
requirement would result in escheat then no application!
 Also, in CA, if there is a surviving spouse, community property passes onto
the surviving spouse regardless for children if deceased died intestate.
(community property is not for children!!)

General Notes
 In CA we don’t differentiate from blood and legally adopted issues….
 If you have a complete generation then nothing goes to the grandchildren.
 Disinheritance in Equity: If parent intentionally abandoned the child for 7
consecutive years then the parent is disinherited

January 15, 2019

Parent Child Relationships

 1ST question: Was X married? (intestate vs. testate)

 Defining the parents’ issues (parent-child relationship):

 (or does it apply to any children)

 Natural Born Children: married woman gives birth then there is a presumption that
the husband is the father.
 In CA, if the alleged father doubts his paternity, he has up to 2 years to rebut the
presumption. He needs clear and convincing evidence. DNA is considered to be
clear and convincing evidence.
 In other jurisdictions it is a conclusive presumption (not subject to being rebutted).
 Paternity Declaration: When child is born out of wood luck and the father
voluntarily signs a declaration that he is the father of the child. Declaration is
registered w/state of CA.
 CA: siblings do not have standing to contest paternity of unknown sibling! But the
administrator of the estate can.
 CA: gay parents and single person can adopt legally
 There is no unadapting someone (minor or adult)

 Legally (formally) Adopted: parent-child relationship is legally transferred through

the process.
 o Adopted In: child is treated the same as under intestacy as a natural born
child. When parent brings the child inn.
o Adopted Out: when the biological parent consents to the adoption or parent
dies. Severs the parent child relationship. Once adopted, rights to intestacy of
your previous family are severed.
 Exception: CA Statute: a step-parent adoption does NOT sever the
intestacy from the adopted-out parent. It allows them 3
lines/generations.

 Equitably Adoption: foster parent never formally adopted the child but treated the
child the same as his/her other children. Close and endearing relationship is not
enough, there has to be a promise or a barrier. It needs clear & convincing
evidence that there was intent by the parents to adopt the child. It is not the same
as a legal/formal adoption and thus there are limitations to intestate rights, rights
are only between those of the equitable parent-child relationship (the contracting
parties). It does not include the issues of equitable child, siblings, grandparents
etc…

 Surrogacy: the legal mother is surrogate (birthmother) mother!

o CA: the rights of the birth mother can be contracted away through a surrogacy
agreement. Birthmother has to waive any parental rights to the child at the
moment of birth.
o Only 2 parents, either birth mom or biological mom and biological dad.
o Surrogate agreements in CA are enforceable.

 Single Person: child from sperm bank. The child only has 1 parent/1 line of
intestacy.

January 17, 2019

Posthumous Birth/Conception

Birth: within 300 days of death of dad.

Frozen Egg Situation
 Whether or not children is actually related to deceased
 Deceased agreed to the proceeding?
 Deceased agreed to arrangement of child to receive social security benefits
(death benefits) of deceased dad?

CA statutory scheme to determine whether …249.5

1) Right to use identified in writing: (a) signed & dated; (b) same for revocation or
amendment; (c) person is designated by decedent to control genetic material.
2) Notice of intent to use w/in 4 months of death certificate or judgment
determining fact of death
3) Actual use w/in 2 years

Property Interests in Reproductive Material

 Intent of donor controls, not a personal property asset of Decedent’s estate
 Genetic material is not to be divided so if someone dies without putting in writing
who can use his/her genetic material, then no one can use it!!!

Effect of Homicide/Elder Abuse

 Slayer Statutes PC 250-254 felonious intentional killing by preponderance of
evidence. Severs your right to inherent under intestacy if convicted. A final judgment
of conviction is conclusive.
 PC 259: If by clear and convincing evidence: (a) neglect, physical or financial
abuse of elder or dependent adult decedent; (b) bad faith; (c) reckless, oppressive,
fraudulent, or malicious; (d) decedent was substantially unable to manage his/her
financial resources or to resist fraud or undue influence. Then = severs intestacy
inheriting rights if convicted. BUT in criminal court it is beyond a reasonable doubt.
 Criminal & civil court is NOT double jeopardy (same case one in each court is not
double jeopardy)

Effect of Prior Transactions

 Advancement: a lifetime gift as replacement for inheritance share. when X dies the
advancement will be deducted from the inheritance.
o Over Advancement: No payback. When the advances surpass the value of
the total inheritance and ends up cutting short on the other’s that are also to
inherit.
 o Recipient Predeceased: No need to pay back the advances and will not
inherent because obviously the recipient needs to survive the testator.
 You can’t pound inheritance rights when the testator is still alive because they
are not vested yet!!! Duh!!! (vested interest v. mere expectancy)
 On the other hand, you can assign your inheritance rights when the testator has
deceased, but probate court takes a while.
 Loan (w/in will): if testator dies before x pays the loan, the outstanding balance on
the loan gets deducted from the inheritance share. If the promissory note is
enforceable at the time of death.
 You can’t use offset under intestacy, but you can in a will!

 If you don’t want an inheritance as long as you notify the administrator of the
estate in writing within a reasonable time then you have renounced your
inheritance rights but that person does NOT get to pick who gets the $ instead.
Legally it is as if you died.

 Disclaimers of renouncement to inheritance rights are valid against all creditors!

o Exception: IRS tax liens & SBAs
o Civil liability will not undue it! Only tax liens!
o Bankruptcy apply state law when it relates to disclaimers

Rule of Perpetuities (Look Back Rule)

 Deceased has no lineal descendant
 Is there any deceased spouse? Did deceased inherent anything from pre-deceased
spouse within 15 years? If yes, you take that property from deceased and put it back
into the pre-deceased spouse estate and distribute accordingly.
o If it is personal property, did he inherent within 5 years?
o Now, the returned property gets distributed as under intestacy if the pre-
deceased spouse specifically inherited it all to the now deceased spouse.
 [Intestacy & No lineal descendant, no spouse: RP from pre-deceased spouse
w/in 15yrs & PP titled & 10K+ w/in 5yrs = reverts back to spouse’s estate that
died 1st to be distributed under intestacy!]

January 22, 2019

 Survivor has to outlive deceased for 120 HOURS (5 days) [intestate]

 Clear & Convincing (CA) evidence that heir is alive
 Simultaneous Deaths (spouses): we divide the community property evenly. ½ to
intestate heirs of spouse 1, and the other ½ will go to spouse 2 intestate heirs.
 Death:
1. Traditionally: no longer a measure (breathing, heart-beat and now
neurological activity).
2. Modernly: no neurological activity in the brain stem or in the brain itself.
3. Presumed Death: someone is missing for 5 consecutive years. A petition
can be filed to ask that the person is presumed dead.
1. SOL to Reverse: 3 years. If past SOL, you will remain legally dead.
 When it comes to insurance pay-out is but who is named in the policy.

Class 5 Testamentary Capacity

 Mental capacity makes a difference in wills.

 Basic requirements in CA to make a will: 18 years of age & of sound mind.
 If document is valid on all 4 corners, then the BOP is on the contestant because it is
presumed person who made the will had mental capacity. Prima facie standard.

Sufficient mental capacity: PC 6100.5(a)(1)

 Do they know what a will is?
 Do they know what they have?
 Do they remember who are their living decedents?

 Attorneys are the front line to determining mental capacity. Typically, not challenged.
We don’t need to get medical or psychological assessment.

Changes
 No limits on changes as long as mental capacity
 In CA, you can’t rule on what you have done until after death.
 Pre-death challenge to capacity arising out of the creation of a will is not
allowed in CA.
 Some states allow living probates, which allow petitions to be filed to determine
whether or not a particular will was valid even prior to testator’s death.

Deficits in Mental Functioning (Quirky clients)

 When was the capacity lacking and what occurred during such time?
 Look at timing and at causal connection.
 Quirky is not enough
 Dementia can include alz heimer’s but is not the only one.
 Delusion: cows being stolen by aliens
 Timing & causal connection (how the deficiency directly affected the
testamentary capacity / the will itself) to assess mental deficit.
 Hallucinations: mushroom is not a justification.
 Deficit in mental functioning/quirk must have substantial impairment and result in a
material effect on the contents of the will.

January 24, 2019

3(a) in outline (significant impairment & dementia)

 5 Things Ct. look at in regard to a challenge of capacity

o Language ability
o Memory
o Physio special skills (eye/hand coordination)
o Emotional perception
o Abstraction & cognition (math)
 If it appears valid on its face, then it is presumed to be signed by client with
testamentary capacity.
 Material effect on contents of the will. (contents have to reflect the delusions)
 When it is a hand-written document (holographic will) we have to confirm who’s
writing it is
 Threshold is pretty low (Marriage of Greenway pg. 104)
 If substance abuse is occurring at the moment of the creation of the document then
most likely the document will be held invalid. But if there is no direct evidence then
no. Needs a causal connection. What was the state of mind of the testator at the
time the document was created.
 Mental dementia will most likely be found if there is a significant change in character.
 Degree & other areas are important (take a look at the big picture) [from the 5
stated in the outline]
 Illiteracy does not mean lack of testamentary capacity. (even if client is blind or only
knows how to sign his name).

Class 6 External Factor that can Interfere w/Testator

a) Person claiming outside influence needs to meet the 5 elements

1. Reasonable Expectancy
2. Wrongful or tortious conduct
3. Causation – Inducement or Prevention
4. Damages
5. General civil court proceedings only if no adequate remedy in probate
1. Usually in probate court but if no remedy then civil court. But you can’t go to
both courts. (ex. Losing in probate then going to civil = NO)
b) Torts are against the testator

Interference by:
a) Duress: unlawful confinement of person etc., unlawful detention of property, or
lawful confinement but fraudulently obtained
b) Menace: threat to do the above or physical injury etc…
Fraud: actual or constructive: intent to deceive, or no intent but gains an advantage
c) Forgery, Suppression, Alteration
d) Depletion of Assets Prior to Death

e) Undue Influence (C&C): excessive persuasion that causes another person to act
or refrain from acting by overcoming that person’s free will and results in
inequity.

1. Excessive persuasion
2. Inequity in the outcome?
 Once it has been raised by person bringing the claim then alleged influence
needs to rebut it (if there is a confidential relationship)
 We want to shift the burden

Factors to Consider:
a) Vulnerability: Presumption of Capacity so burden remains w/objecting party
b) Influencer’s Apparent Authority: Confidential Relationship then Rebuttable
Presumption of UI Arises
c) Actions or Tactics Used by the Influencer (suspicious circumstances)
d) Equity of the Result

 Gunterson/Gudnerson statutes (relationship of attorneys/fiduciaries)

 Clear & convincing evidence (overwhelming evidence) needed/standard to rebut
the undue influence presumption

e) Exceptions to UI:
o Mere Remembrance: vase to the caregiver or 5k when the estate is
50K. (cash has been ok but no likely!!!)
o Certificate of Independent Review & Consequence of the Gift, it
shifts the burden from the caregiver to the contestant. Send your client
to an independent attorney to assess your client’s desire to leave a gift
to a caregiver. That attorney if approves, will draft a certificate of
independent review and then that will go into your client’s file.

Tip: Do not put why your client does not want to leave something to a family member in
the will because then that person can contest your client’s capacity etc…
Family Protection

(A) Family Allowance: monthly stipend. During administrative period of the estate
(while probate procedure is pending) [not long term] More than 1 can be granted.
 Entitled: surviving spouse, minor children, physically or mentally incapacitated
dependent adult children.
 Discretionary: Other adult children who were actually dependent in whole or in part
on decedent or actually dependent parent in whole or in part.
 If a person eligible for allowance has reasonable maintenance from other sources
and there are 1 or more persons entitled to family allowance, then no and only to
those without maintenance sources will get the allowance.
 Scope: Reasonable according to the circumstances and available assets.

(B) Homestead (right of possession): court may allow someone to keep living in a
home even though that home is inherited by someone else.
 Eligible: Only spouse or minor children are eligible.
 Duration: not to exceed the remaining lifetime of the surviving spouse or until the
youngest minor turns 18 (maximum duration). But the judge has discretion as to
duration.
 Court CANNOT impose a homestead upon joint tenancy property because of the
surviving right.
 A homestead can only be imposed upon deceased’s property.

Framework: (elements)
o 1) Eligible Deceased?
o 2) Eligible Property? [CPQCPTICSP BUT JTw/3party]
o 3) Truly a need? (facts considered: needs, encumbrances, other
resources?)

Omitted Spouse & Omitted Children

 Will  Life Event (spouse or child) Death (w/no change of will)!!!!!
 Only if there is a will that predates the life event.
 Deceased dies with a will without every changing his previous will that he drafted
before spouse & children.
 This can throw out the whole will (if unintentional omission)!!!!! Unless the chain is
broken.
 Waiver/break in chain has to be in writing

Spouse
 Presumption: unintentionally omitted the spouse. Spouse can take ½ of community
property & only up to ½ of separate property because the law limits the omitted
spouse’s entitlement to separate property of his/her deceased separate property.
 Presumption can defeated with an amendment to the trust stating it was an
intentional omission. Or to provide for the spouse outside the will because it will
break the chain and will create evidence of intent not to provide for the spouse. (ex.
Making survivor spouse the beneficiary of life insurance. Numbers don’t have to
match). A prenup is also an exception to the omitted spouse.
 Domestic Partnership agreement can also act as a waiver.
 Prenup, codicil, distribution of other assets (life insurance). Must be in writing!

Children
 Presumption of unintentionally omission and thus child gets the intestacy share of
the estate.
 Even if father was unaware of the child (child needs clear & convincing evidence).
 Same timeline.
 If we are going to exclude a child: use strong & convincing language
 If the necessary timeline for a couple is met, then they have kids and never changed
the will. And the deceased leaves substantially all the estate devised to the surviving
parent of omitted child, then the child does not get anything.
 If kid was in existence when deceased created a will but deceased did not
know about him but there is boilerplate language excludes everyone except 3
kids. Then the argument is that the kid before the will was intended to be disinherited
because of the boilerplate language. (boilerplate disinheritance works backwards
but not forward)

Class 9 February 5, 2019

Waiver
 Adequate disclosure of both parties’ assets & liabilities.
 Fair/reasonable disposition of rights. (can’t be lopsided).
 Draft a premarital agreement under family code because we can address death or
divorce. Thus, draft waiver under 1615 because Probate code only covers one.
 Is domestic partnership use the same approach in heterosexual couple which is to
anticipate both divorce and death.
 separate property includes gift or inheritance received by a spouse during their
marriage.
 Non-community states may have statutes that designate a certain % or dollar
amount the surviving spouse gets.
 You can’t apply another state law to evade CA spouse & children protections.
(Community property rights). Other state’s law will apply to everything else except
the ones just mentioned as long as they are residing in CA when spouse dies!!!
Whatever state is stated in the will as the controlling law will apply regardless of
where the parties are living except to the CA protections if at the time of death the
 surviving spouse is living in CA. (no matter choice of law in will, if at the time of
death surviving spouse resides in CA, spouse & children are protected!!!)
 Faith based condition is OK for a client to include it in a will.
 Drug free condition can also be ok because it goes along w/our public policy of no
drugs.

Public Policy v. Testamentary Freedom

 Religious preferences faith-based conditions = OK
 Marital Status Conditions (condition to divorce) = NOT ok, public policy to encourage
marriage
 Illegal act or asset = NOT ok
 Statutory forced share = ONLY in LA & some foreign countries.

February 7, 2019

Wills

 Element #1: A writing, A reasonably permanent method:

o It can be pencil, crayon etc…
o Will must be lodged w/probate court (the original), rarely will they accept a
photocopy. Original remains w/the court.
o Will in desk written w/dust was accepted.
o Will in cassette is the only non-writing will case professor knows about.
o It does not have to be in English but they have to provide a court certified
translator. Thus, you submit the original in the foreign language and the original
certified translated to the probate court.
o In Mexico it has to be certified by the Mexican consular because Mexican wills
remain in the notary’s journal and thus you can’t physically get the original to the
US.
o Ink on paper can be through typewriters or printing, does not have to be by hand.
o Electronically stored wills are not recognized in CA!!! (document stored in
laptop, cloud, drive, e-mail etc…) because CA exempted electronically signatures
in wills from being legally recognized.
 Element #2: Testator’s Signature
o Can’t be electronic signature!!!!
o Handwritten, normal signature whatever may be must be on the paper.
o If someone is not physically capable to sign, someone can physically help him
sign (guide his/her hand) and it will be ok.
o If they don’t know how to sign their name, they can make their mark=ok.
o If guiding hand is not possible then if testator says “Sign my name for me”
in the presence of 2 witnesses, then it will be ok. 1 witness signs and includes
“signed by” and include his/her signature and the other witness signs stating
he/she witnessed everything.
 Element #3: Testamentary Intent-Evidence:
o Some evidence of the intent, does not have to be labeled “will.”
 Element #4: Testamentary Capacity
o At the time of the will execution
o If all 4 corners court will presumed, they had capacity. It is up to the contestant to
prove lack of capacity.
 Element #5: Witnesses
o CA requires at least 2.
o When it is not in individual handwriting (ex. Client brings printed document ready to
go), 2 witnesses are required.
o Actual Presence: immediate physical presence
o Some states are OK w/line of sight. (testator can see everybody and everybody
(witnesses) can see him) [testator does not physically have to watch you sign but
be able to see you]
o CA: Conscious Presence: everyone knows what everyone else is doing satisfies.
o To be witness: 18 years of age, of sound mind & able to physically sign
his/her name.
o Person witnessing needs to know what it is that he/she is witnessing. But they
don’t need to know the contents of the document only the nature of the document
at that particular time (that it is a will).
o Witnesses sign the last page of the document.
o Interested witnesses: Rebuttable presumption arising out of the witness.
Someone who has an interests in the will that it is also acting as a witness raises
the presumption that the gift in the will is created under undue influence. Up to the
witness to rebut the presumption. If they are not able to rebut the presumption,
the will still stands but the gift under the will is revoked (witness does not get the
gift).
o Witness are to sign their normal signature.
o Can’t have a witness that can’t sign her/his name.
o Initials are not ok, witness has to sign his/her normal name/signature.
o Traditional Order/Format: Witnesses are there to witness the client sign, so they
can’t sign before the client sign.
o In CA: Continuous Transaction Approach: as long as all the signatures get
there it does not matter in what order they happened.
o CA: does not require testator to sign in a specific location or page. It can be on the
first page or last, as long as it is there.
 Element #6: Attestation Clause: here is what we saw and then signed.
o Self-Proving Clauses: If attestation clause is signed under penalty of perjury
then no need to subpoena the witness in court. Self-proving clauses with respect to
the true & correct nature of the attestation clause. “Here under penalty of
perjury….” [Tip: Always build it into my wills]
o Acknowledge: If testator signed outside of the presence of the attorney so
he/she brings the will signed you can still have two witnesses acknowledging
that the testator signed the will (you ask the testator “you are acknowledging
that you signed this will…”). You don’t necessarily need to see the testator
physically sign.
o
 Element #7: Harmless Error Rule (in CA it only applies to witness’s signature):
 o Applies when 1 witness forgot to sign but was present.
o If we notice the mistake before the client dies, everyone can get back together
(original party), so the witness can sign.
o If client dies before the error is discovered or the witness can sign, if everything
else was in order, the will will be upheld valid. (clear & convincing evidence of
intent to will, no fraud or undue influence, substantial formality).
o In CA the harmless error rule only applies to a witness’s signature because the
threshold consideration is the client’s signature itself.
 Element #8: Full Faith & Credit:
o If testator moves out of state and dies before getting a new will in the new state,
the old will, will still be held valid.
o If will is signed and everything is proper in the state it was made, then it will be held
valid in 49 out of the 50 states. (Florida does not recognize out of state wills). If
testator dies in the new state with only the will of his/her previous state of
residence.

 Conditional Will
o Valid but I have to watch the condition to see whether or not it has been satisfied.
 Extrinsic Evidence: is admissible to determine meaning of will if unclear or
inaccurate or to prove document is a will.

 Requirements of Holographic Wills (handwritten wills):

o When there is a holographic will one must prove it, either witness or
declarations by people who can validate that signature is that of the deceased
and that the material provision (who gets what) are by the testator’s hand written.
o Date is not required for a holographic will
o Present testamentary intent: “operative wording” creating a devising property.
Not labeling does not defeat the will but also labeling the will “will” may not be
enough.
o CA: only requires signature & material dispositive provisions to be
handwritten to hold it valid, in a blend/mix will (parts in print and parts by
handwriting). But some states require it all handwritten…

 Oral Wills:
o Not in CA, but in other states you can dispose of your PERSONAL property
through an oral will
o Not in CA, but in 21 other states soldiers & sailor’s oral wills are held valid. These
are also conditional wills, (if soldier/sailor testator dies but it will not apply if he/she
survives).

 Statutory Wills: OK if it complies w/the requirements. See outline.

Revocation & Revival
 Make a statement of express revocation in the new will to revoke the old will.
 Last in time first in right, in the event that there are 2 wills and no statement of
revocation. Old will vs. New will: new will prevails. Unless the wills are inconsistent.
 Physical Act: Another way to revoke a will. BUT just because a will was destroyed
does not mean it was revoked. Client must intend to revoke the document!
 If client is not physically capable of destroying the document he/she can ask
another person to do it for him/her but it has to be in the client’s presence! And at
the testator’s direction.
 If document has writing it can be considered obliterated
 Only original is the original!!!!!! Photocopies don’t make the cut unless the will is lost
and the presumption of revocation is defeated then if the attorney has a photocopy
(one scanned w/the signature) will be accepted in probate!!
 But there are duplicate originals (when both client & attorney sign 2 sets so that
each person has an original). The original in the client’s control, when there is a
duplicate, is controlling.
 If the original was (1) in the client’s possession last, (2) there was no competency
issue and (3) can’t find it after the client’s death, there is a presumption that the will
was revoked!!!!! Unless there is enough evidence to rebut the presumption, by
showing one of the 3 elements was missing.
 Just a reprint will not get the job done because you need the signature on the will.
So it is best to scan and save, rather than just saving the will without the signatures.
 Only a client can turn a photocopy into an original by signing the photocopy that was
already signed.

 Revocation by Operation of Law: Divorce/dissolution revokes all rights under will

as to the ex-spouse and gifts to ex-stepchildren. But not separation.

 Codicil: written document, amendment to a will or supplement. Codicils also need

to be signed w/witness etc… Same formalities apply as to the creation of the
will. You reference the will in the codicil, reference the changes, and “except as
stated everything else stays the same…” or something along those lines.
o Client can also create a holographic codicil. Same requirements apply.
Format of documents don’t have to match but they need to reference each
other!!! (ex. Formal codicil and holographic will)

 Wills are ambulatory, they move w/us all through life. So even if a will leaving “all” to
x means all not the all at the time the will was created. Likewise w/kids, “leaving all
to my kids” and at that time there were only 2 kids but at the time of client’s death
he/she had 4, all 4 get equal shares.
 When interpretation of unclear, terms will be interpreted at the time of signing what
was meant by the words used. We look at the mind of the testator at the time the
will was created for interpretation of terms.
 But terms subject to application, will be applied as of the time of death.
 Codicil is intended to be an update of the will, amendment modification of the
will. But it also acts to re-date the will (not physically but legally).
 In CA: a codicil can revive a previously revoked will unless the will was
revoked by destruction!!!
 If revocation is going to be done by obliteration (=through writing) you need to
write on the face of the will or at least in the signature line (date & sign). Write
“revocation” on the first page and cross the signature. Writing on the back of the will
is not ok. A holographic codicil can revoke a will but it has to be by the client’s
handwriting because it is a holographic codicil.
 Statement of revocation by a testator in a photocopy have been upheld because it
show intent to revoke.
 Throwing it away counts as destroying the document if done by the testator.

Reestablishing Revoked Will

 Revival: Will #1 revoked by Will #2. Does the revocation of will #2 revive will #1?
NO! revoking the last one does not revive any of the prior wills UNLESS in the
revocation of the last one has an express written intent that revocation of the last
will is to revive a prior will.

 Dependent Relative Revocation: revocation of the 1st will was dependent on the
subsequent Will or Codicil being operative or effective. If legally defective, then to
find out whether or not the prior one is revived or not, we look at:
o Look for (1) Repeated Purpose AND (2) Intent to Reform not revoke.

Construction & Interpretation

 CA has free testamentary will!

 Contractual obligations may limit the testamentary freedom. If you have a valid
K in place and you draft a will contradicting a clause in the K, the K will control!
 Parties can’t waive child support between themselves (spouses) but inheritance
rights CAN be waived.
 So if there is a valid K, then you make a reference to the K in the will if necessary.
This avoids conflicts. If no need, then just draft in a way so it does not contradict the
K.
 Joint Will: 1 will for 2 people. (No presumption of a K just because there happens to
be mutuality!)
 Mutual Wills: (No presumption of a K just because there happens to be mutuality!)
 Reciprocal/I Love You/Mirror Wills: (No presumption of a K just because there
happens to be mutuality!)
 o These need clear & convincing evidence that it was a K. (clear & convincing
evidence of the existence of a K)

Integration
 Someone dies and we are trying to find out if any of the documents left behind
constitute a will. (Do any of them express testamentary intent?) Looking to integrate
all pages into a single document.
o (1) We use extrinsic evidence (it is admissible) to show
 Pages actually present at signing;
 Pages were intended by Testator to be Will; OR
 Physical connection: origami in corner of document, staple, paper clip
etc… (when we are trying to figure out what physically constitutes a
document)
o (2) Internal Coherence/Chain of thought: use footers (pg. 1 of x). We want
to know what is next, if anything.

 If witnesses where there at the time of the creation of the page/document then if the
witness can testify they are admissible.

Incorporation by Reference
 CA: if will is going to refer to another document. That document has to already
exist (such as a trust)! Evidence of intent to incorporation, and sufficient
description, then it will be incorporated into the will even if it does not comply with
wills statute.
 Codicils technically update the wills!!! So new date of codicil takes place!
 Exception: Disposition of Tangible Personal Property. So, if the list is created or
revised after the date of the will, it will still be used.
o Limitations to this exception:
o Any one item cannot exceed 5k AND
o The aggregate value of the items cannot exceed 25K

Reference to Acts & Facts of Independent Significance

 When one says that they want to leave their stuff according to the son or any other
person’s desire. So, if the other person does not have a will yet, then we can’t argue
incorporation by reference so we argue reference to “acts & facts of independent
significance” This way all that it matters is that there is a will at the time the other
person dies.

Interpretation
 If questions about what the will says, then CA says if you went through the trouble of
creating a will, we will go through the trouble of trying to understand it.
 We want to avoid intestacy
 When we are looking for words that are not defined in the document, we look at the
dictionary etc… unless the will was set in a way to find an interpretation for such
word.
 If a word is defined in the will, even if the definition in the will is incorrect, we will
honor whatever is in the document.
 Technical words: we are responsible for them

Ambiguity
 Patent Ambiguity: When ambiguity is so obvious on the face of the document, then
we can introduce extrinsic evidence to figure it out.
 Latent ambiguity: not on its face
 Court will allow extrinsic evidence to identify and/or clear it up an ambiguity

 Mistake: Extrinsic evidence can also be introduced to show by CC evidence that a

mistake was made and to show the intent of the testator.

CA: gifts directly to animals are void!!! You can’t leave a gift to animals
Specific list will control over general

MIDTERM!!!!!!!
 1 Essay 1 hr. (no MC)
 20%
 Through Item D in Class 14 (including Ambiguity)
 E-mail questions cut-off: Sat. 5PM!
 Personal Property: household content/contents in the house: Furniture, drapes,
appliances, pots & pans and even stuff that is on the wall is considered to go w/the
house. Things on the garage BUT NOT a vehicle, no cash, coin & stamp collections,
particular art, stocks certificates, just because there is a bank statement in the house
does not mean the person getting the house gets the bank account. Personal
effects: clothes & jewelry.

Problems In Estate Distribution

 Types of Gifts:

o Specific Gift: look for the lists. A particular item to a particular

person/beneficiary. It could be anything (personal or real). What is the
designation of the item.
o General Gift: a % of the estate (the net estate). General gift of the estate.
Specific gifts are not part of the general gift. We also deduct, tax, bills, debts,
and other expenses such as attorney’s fees.
o Demonstrative gift: % gift in a specified account with the value at date of
death not at time of creation.
o General Pecuniary Gift: fix dollar amounts. It does not have to be cash it can
be in kind, if the have the same value as the fixed dollar amount. We value
the estate at date of death. If beneficiary gets his fixed amount in a gift in kind
and later appreciates the beneficiary does not have to pay back the money
resulting from the appreciation. It will come out of any other asset or account
not already distributed by either a specific gift or a demonstrative gift.
o Annuity: this also subtracts from the general gift before they distribute such
gift.
o Residuary: beneficiary gets anything left after the distribution of all of the
above including general gifts distribution. After expenses as well.

 Ademption
o Ademption by Extinction: if it is a specific gift and the gift is not part of the
estate when the testator dies, then that beneficiary does not get a substitution
gift, a presumption arises that the gift was revoked. Same for a demonstrative
gift. General rule: no substitution UNLESS, the gift was changed in form only.
(ex. Sole proprietor changes to LLC). As a general rule we can’t do tracing
unless the client specifically states so when giving away a specific gift (such
as a house to be given to daughter then gets sold but if she allows it then
proceeds of the sale will go to the daughter). Not a specific amount but a
specific asset. Needs to be traced directly. (ex. Bank account closed w/bank
 of America and opened in wells fargo, court allowed the tracing). Or even
from a merger and acquisitions of banks acquiring smaller banks. When it is a
change due to the corporate entity (not because the client changed it) we can
also trace it (stocks).
o Ademption also applies partially.
o Ademption by satisfaction: if testator gives the specific gift away before he
died to the beneficiary then you don’t argue ademption by extinction but
rather ademption by satisfaction. BUT if the specific gift was given to
someone else then is ademption by extinction. It has to be specific gift given
during testator’s life to specific beneficiary.
 AFTER MIDTERM CLASS NOTES

 11/10/9 is the somewhat average. Maximum 20 Range 5-16

 Class 16

 Abatement: bills that the deceased left behind. First place we go to pay the bills is
those assets that are going to be distributed intestate but if the will distributed all of
his/her property (personal & real) the residual clause (beneficiaries) gifts pay the bill.

o If it is not enough to pay the bills under Intestacy share  Residuary  Then
Non-relative gifts (general, specific, demonstrative, pecuniary)  Then
relative gifts  then specific gifts to relatives.
o Taxes, executor fees & attorneys for the personal representatives get paid
first. We get paid first, after administrative costs theeeen IRS in CA!!!
 If there is not enough money after exalting all the above (all the assets) then the
beneficiaries are NOT responsible for the deficit/debt.
 If we are invading the residuary beneficiaries share (1st ones to take the hit) we take
it pro-rata, whatever their interest in the residuary is what they have to give up to pay
the bills). This is called the Fix Fraction Method. What ever your % is, is what you
owe.
 The the Fix Fraction Method is also applied to specific gifts, general gifts, general
etc… in all tiers (non-relative, then relative etc…)
 When calculating the value of gifts/assets we take the FMV of the assets at the time
of death.
 Most protected specific gift to relative; Gifts 3-5
 Order of Abatement from least protected to most protected: Intestate 
Residuary General, Demonstrative, Pecuniary, Annuity to non-relatives  same
gifts to relatives  Specific gifts to non-relatives  Specific gifts to relatives (THIS
IS CORRECT!!!!)
 Calculation is done by calculating value of the whole group then calculating the % of
each of those gifts in relation to the total valuation of the group.

Exoneration:
 assets pass w/encumbrances!!! (inherited house but w/mortgage payments, you
inherit the mortgage payments as well!!!)
 Credit card debt is NOT an encumbrance on ANY particular asset that is not real
property. (Ex: TV being paid in credit card left to brother, brother gets the TV but
NOT the card debt for that tv).
 Will CAN say “pass this w/out incumbrances etc…” and it will be honored!! Then
executor has to come up w/money to deliver that gift free & clear and tha debt is
added to the other bills that need to be paid.
 Debt on a specific asset is not to abate other specific gifts in order to pay that gift.
 We won’t sell off a specific gift whether or not to relative to exonerate debt of another
specific gift (the gift which the will specified must pass w/out any encumbrances!)
 No exoneration unless will states so!!

Set Off: if beneficiary owes the testator $ then the amount of the debt sets off the
amount of their share. (so, share - $ set off) but it will only be set off it the promissory
note is enforceable. Generally, 2/3 years SOL for a promissory note. So always update
your promissory notes!

Class Gifts: ok if sufficiently described class of people that are entitled to the gift. So
testator does not need to name every person in that class. Just adequately describe the
class with enough specificity for a 3rd party to figure who is included. Step #2: members
must survivor; Step 3: CC evidence to prove you outlived testator.
 If it is under a will it will be what ever the will says, if will is silent on time that
needs to survive the testator then only CC evidence of survivor ship for 1
minute or an hour you are good. (the 120 hours survivorship rule is JUST for
intestacy!!!! Not here!)
 This is included in the same badge of non-relative gifts for abatement
purposes.

Family Designations: “distribute my assets to my family, heirs, kinfolk”: CA says it

does NOT mean distribution to every single relative but rather we apply the rules of
intestacy!!!!
 “Distribute it by capita/per stripes”: if no spouse and all children survive then to all
equally, per capita & per stirpes is treated the same.
 But if no spouse & not all children survive: “Distribute it by per capita (add up
grandkids as a bunch that are offspring of children and treat them the same (you
combine the grandkids) and w/per stripes (follow line of intestacy)”: [so capita
box it per stirpes let it flow (intestacy)!!!!]
 We only use per capita or per stirpes IF the will requires it!!!!!!!!
 Per stirpe & per capita only applies to lineal descendants there is no provision for
spouses, parents, grandparents etc!! so if will does not specify don’t call intestacy
per stirpees!! It is technically wrong!

Lapse/Anti-Lapse
 We got the asset but the beneficiary did not survive. What do we do?
 Did will name an alternate beneficiary?
 If no alternate beneficiary, then historically (old rule) it lapses into intestacy.
 Now anti-lapse statute: almost state have it in order to attempt to avoid intestate. If
beneficiary has pre-deceased and no alternate beneficiary is named, then we look to
see if the beneficiary is of kindred of the testator (family member including extended
family) then their issue will take the share. (we give it to the issue of a predeceased
beneficiary, if it is family).
 If predeceased beneficiary is not kindred or was kindred but had no issue, then we
give the gift to the residuary instead of intestacy!!!
 If residuary beneficiary predeceased and IS kindred, then the gift goes to the issue
but if not kindred or no issue, then we just keep it in the residuary gift and everyone
in that category just gets more. If no residuary beneficiaries then it finally goes to
intestacy.
 Boilerplate disinheritance clause (general language) does NOT prevent the anti-
lapse from applying. But if disinheritance language is specific then anti-lapse is not
applied as to that specific named person.

Non-Probate Transfers
 In Partnerships, shareholders, insurance: If beneficiary of the $ in life insurance
policy predeceases then it goes to the estate of the beneficiary.
 Federal Pre-emption: divorce terminates unless is a life insurance policy or benefit
under an employee benefit designation that may be subject to ARISA. Arisa controls
over CA law saying that who-ever is on the document named as a beneficiary then
that person gets it (even if is an ex-husband/wife which under CA law terminates all
rights of inheritance)
 Bank Accounts, Stock Investments, Real Property:
o ITF: “In Trust For…”:
o PoD: “Pay on Death…” used for bank accounts. Testator’s account up until
the testator dies. Are not revoked just because settlor left all of the assets to x
because this is boilerplate language. It needs specific language to revoke this
(ex. I leave All my property including POD designated to Y to x, then here
revocation)
o ToD: “Transfer on Death…”: used for stocks, RP, and some PP (vehicles).
Asset still testator’s up until his/her death. Are not revoked just because
settlor left all of the assets to x because this is boilerplate language. It needs
specific language to revoke this (ex. I leave All my property including POD
designated to Y to x, then here revocation)
o Proportional & Beneficial Ownership: bank account were testator opens
account and names someone else, and says $ will go to that person upon
death and that if that person puts $ testator will double etc… Both can pull
their money out because it does not transfer up until death.
o Effect of Will Provisions: Does boilerplate language “all my estate/assets
etc…”overrides non-probate transfers? It does NOT alter non-probate
designations/transfers unless there is a specific language revoking the non-
probate transfer/designation.
 Joint Tenancy: “HW JT” = Husband & Wife Joint Tenants (on deed). “Bob, Sue” =
absent any other evidence is considered a tenancy in common. TIC = equal
ownership interest unless deed specifies specific % of ownerships. TICs don’t have
survivorship interests but JT does!!! (CA presumes right of survivorship in joint
tenancy) CC evidence of survival. Divorce severs JT and by operation of law
converts it to TIC, even if parties don’t change the deed. But if after divorce couple
still wants to hold it as JT, they have to create a new deed and record it. Same for
domestic partnership. X “and” Y: presumption in TIC; x “or” y: presumption in JT.
o Presumption R.O.S: Illegal marriage status is independent from JT, right of
survivorship even w/void marriage.
o Presumption Gifting: gifts over x amount (I think he said 17k has to be
reported to the IRS). From a legal standpoint testator can undo the gift and
thus cancel the joint tenancy because the gift was canceled (when mom
made daughter a joint tenant w/instructions to sell and divide equally upon
mom’s death). To rebut, CC E it was intended to be a gift at the time of the
giving of the gift. Changing your mind is not CC E. Also to rebut, CC of mere
convenience (mom wanted daughter to be executor and not a gift)
 Termination of JT:
o Death of JT
o Dissolution of marriage converts a joint tenancy into a tenancy in common.
o Unilateral severance (straw man) of joint tenancy is OK!!! Statutory scheme:
CA Civil Code 683.2
 Create document
 At least 3 days prior to death
 Recorded w/in 7 days after death.
o Elder Abuse (CC E) or Homicide convert JT into TIC: if conviction in criminal
w/beyond reasonable doubt then no need to prove CC E in civil.
 Tax Consequences of Gifts: capital gain tax law. JT does NOT give you any tax
advantages. Community property does, the increase in value of the property
(appreciation) does not transfer the husband’s/wife’s part equivalent in taxes. So
once a spouse dies, the surviving does not get any extra taxes from the valuation of
the property on the deceased’s spouse. R.O.S.(right of survivorship)
HWCP(community property)/ROS. This is a step up in tax advantage: CP/ROS

Gifts

Inter Vivos:
1. Present donative intent: motivation is irrelevant!!
2. Delivery-Actual or constructive/symbolic: (need to give possession of gift, give
means to control the asset) looks for acts of transfer of ownership. In real property:
sign quitclaim deed & record. (Constructive or symbolic: girl signed check a
addressed it to bf who was the only one who had a key to the apartment and leaves
it in the table in plain sight and then commits suicide: that was ok, it was considered
symbolic/constructive delivery).
3. Acceptance-presumed: unless evidence of otherwise. Look at actions or non-actions
of recipient.
4. Irrevocable: if we have 1-2, then gift is irrevocable!! [gifts given are irrevocable]
5. Creditors still have rights: person running w/$ from creditors gifts $ to fishing buddys,
he can’t take it back BUT creditors chasing the person can take the $ from the
fishing buddy.
6. Completed gift w/a reservation of a life estate: painting given to son on his 21st
birthday but painting never left the dad’s house. Look out for a gift that seems given
but has not moved from its place/grantor’s possession/house etc…

Causa Mortis: If it was intended at the cause of death then it is a causa mortis. gift that
is revocable. Gift in view of impending death. Motivating factor is impending death due
to fatal illness for example.

If not revoked but stays in the hands of recipients creditors can still claim those gifts
both intervivos & causa mortis.

Gift to Minors:
 Problems: grantor does not like what beneficiary does with the gift, especially $.
 CUTMA: type of deposit account, gift is completed but the asset is controlled by a
custodian. This account is for minor children! If child dies before 18, gift reverts to
grantor.
 If total value of estate that the decedent left behind personal property of $150 or
less, we don’t have to go to a full probate procedure. PC 13100
 If only asset to administer is real property, & it has a real value of $150 or less, file
w/petition to have the matter resolved in 1 hearing. PC 13151
 If real property of $50 or less we can transfer through affidavit.
 No SOL for commencing probate proceedings.

Professional Responsibility
 Get licensed before practicing!!
 Multi-Jurisdiction: if not practiced in a jurisdiction the don’t practice in that
jurisdiction! You don’t have to be physically present but must be licensed in the
jurisdiction!
 Competency: make sure you know enough before you take in your client. Just do
your research before starting the filing. It also requires mental, emotional, and
physical competency.
 Duties: what is the best interest of the CLIENT!
 Comparative fault can apply to attorney malpractice
 Beneficiaries: intended beneficiaries DO have standing to sue attorney (this is a
new law).
 1st duty: client; 2nd duty: beneficiaries. Beneficiaries can’t sue attorneys claiming
attorney assessed capacity of testator wrong. Rather beneficiary can sue in probate
 court and bring evidence to fight capacity assessment by the attorney, but the
beneficiary cannot directly sue the attorney for capacity assessments!!
 Will that was not signed = intended beneficiary can’t sue! Duh!
 Attorney acting as executor: attorney can be subject to civil liability and bar liability
(you can be disbarred).
 Conflict of Interest: stick to you side!
 Attorney Client Privilege:
 When client dies, privilege does NOT
 It is the client’s privilege
 Recording is ok, but advice client that if she/he plays it for someone else, privilege is
waived.
 Waiver if client wants someone to sit in the meeting.
 Client should not know the name of another client
 If you screwed up and client is alive own up to it and fix it!

Fees
 Advice: Put it in writing & send it to client.
 CA: if $1000< must be in writing & signed! (in duplicate so client & you both have an
original!)
 Statutory Fees: If you are an attorney executor: Do the Engagement letter & the fee
agreement but the fees are dictated by statutory fee.
o There are statutory schedules
o XO (extraordinary fees): 3rd wives appears. In San Diego: you need approval
from court prior.

Retainer
 Must be reasonable for what you anticipate your services are going to cost.
 Not your $ until you earn it, so it goes to the trust account.
 Misuse of funds are an obvious NOOO

Client’s Wishes’ vs. Attorney’s Beliefs

 Client wants you to do something contrary to your own personal believes, simply say
no to represent them.
 If you have taken representation but you are going to stop then you send them a
disengagement. But you can’t do so if it is going to hurt the client. Can’t cause harm
or prejudice when stopping representation. You also need to petition the court.
 If you are simply not going to take a client in, send a not representation letter but you
see a SOL coming up, inform the nonclient in the letter to watch out for the SOL.
Make the letter really clear about not taking in the case.
 Send a conclusion of services letter at the end!
Midterm Notes
 “when I am no longer here” satisfies intent in a holographic will!!!
 For adoption, if adoption was legal in the foreign country based on custom then it is
valid here.
 Every lineal descendant is an heir at law but it does not work the other way!
 Range: 5-16. Most frequent reoccurring score: 10. More scores 10 forward than 10
downward.

Random Notes
 CC E of survivorship if the will does not specific when the beneficiary vests.
 Remember 120 hours survivorship only applies for intestacy
 You don’t need a will to have a trust and vice versa, they are both standing alone
legal documents.

Trusts!!!!!!

 Trusts can attach strings to gifts. (gifts w/strings attached) But has the same free
testamentary will than the will.
 Trust is also referred to as a living trust, an inter vivos trust conveyance.
 Each asset can be treated differently, there can be multiple beneficiaries.
 Trustor needs to have capacity is the same as for wills. (so if no facts suggesting
lack of capacity just say “capacity is presumed”).
 Trustee: operations manager. Managing & controlling trust. Immediately takes
over the management of this entity that is being created (trust). Holds bare legal
title to the trust! They can be corporate entities.
 Beneficiary: they have equitable title/ownership interest in those assets at that
time, they don’t get possession or decide when they do. One person can be both,
trustees & beneficiaries!

1. Types of Beneficiaries:
2. Outright-Lump Sum or Sprinkling (not all at once; ex. age determination or
dispersed over time)
3. Life Estate or Term of Years: income or principal. (right of occupancy or
bank account)
4. Remainder: who gets what is left over from a life-estate or terms of years.
5. Vesting: “payable at” v. “payable upon reaching” Look at what the trust says!!
Kid died before reaching 25 which is what trust said. So the $ simply went to
the son’s estate when he would have turned 25 years old. Upon reaching
means you are not vested until you get to that age. (“at” means vested
w/delayed distribution and “payable upon reaching” means vested and
distributed upon reaching …)
 Problem of Merger: Same person being the beneficiary, trustee and the trustor. No
separation of legal and equitable ownership so there was no trust historically But
now:
 1. CA Exception: same person can be the trustee, & beneficiary as long as it is
limited to a life estate & a remainder beneficiary is named!

Classification of Trusts
 Testamentary Trust: trust created within the will but it is not activated until the will is
probated which of course does not happen until the testator dies. They don’t do
anything because no one is actually administrating the trust. Look for a document
that is stated as a declaration of trusts. Another way is a
 Testamentary Transfer:
 Exercise of power of appointment: see class 21
 Enforceable Promise:
 By Operation of Law (another way to create a trust):
1. Resulting Trust:
 Type #1: Deed of Trust: (real property: borrowing $ to purchase
home) In CA, identifies borrower of $ as the trustor and the bank as the
trustee and the bank as the beneficiary as well. But it is not activated
unless you are on default payments of the loan. If so, trustee is
authorized/empowered to transfer title of property to the beneficiary,
here the bank.
 Type #2: Incomplete Disposition of Trust Property: no instruction in
the trust as to what to be done w/all of the assets. Still subject to
control by the trustee. If no residual clause, or alternative distribution,
resulting trust allows us to take the asset out of the trust to be put it
back to the estate of the trustor (set lord). Then will or intestate
distribution will account for the distribution. [out of trust into estate]
Usually a forgotten bank account.
2. Constructive or Involuntary Trusts: dispute as to the true owner of the
asset. One might have possession, and another legal title, but someone
comes and claim title. So, you ask court to impose a constructive trust (a
holding of the asset) until court resolves who the rightful owner is. So, the
person in possession is the involuntary trustee. Constructive trust can be
used to enforce an oral promise to gift real property at death with justifiable
reliance. (Estate of Brensikofer)
 If same asset in trust & wills and it is contradictory, we look at who had legal title at
the time of death. If testator owned legal title when he died then the will, will control
but if the testator did not have legal title at time of death and the legal title at time of
death was the trustee/beneficiary then trust controls.

 Elements for Creation of a Trust

1. Intent: some evidence that this document is intended to be a trust. When
looking at documents look for a nice upfront statement if not extrinsic
evidence can be introduced.
2. Trustee: if no trustee named in the document, the trust does not fail because
the court can appoint a trustee. (not necessary for formation but it is
necessary at some point for administration: mention this if applicable in exam)
 3. Trust Property: if no assets then no trust.
 Present Transfer of Asset: did the trust lord actually put property in
the trust? (funding the trust) Client must re-title the asset. We need to
record the deed. Symbolic transfer can also satisfy (look at notes
above). Personal property is presumed to reside where the client was
domiciled at time of death. Obviously not real property.
 Does future interest qualify as trust property? Yes, if you own the
rights even though the asset does not have any value at the time of the
transfer, it still counts as a trust asset. present transfer of future
interest = OK if there is a reasonable expectation of the interest.
 Life Insurance: payable upon death. Players: owner of policy (right to
determine the life policy exist and obligation to pay the premium). He
must appoint the beneficiary: person that will get the payoff upon
death. A trust can own the life insurance (asset transferable through
trust). But the trust can’t be the insured measuring life!!. The insured
measuring life is the trust lord/the owner. (in other words, trust can’t be
the insured). The trust can be the beneficiary of the life insurance
though.
 Testamentary Distributions by Will or Death Benefit Designation:
yes, it’s a valid asset. (trust can be the beneficiary of any death benefit
designation).
 Petition to Conform Ownership of Assets by Trust When Not
Titled in Trust: no assets but sufficient evidence that certain assets
were intended to be assets of the trust.
 Digital Assets & Cal-RUFADDA: yes, can be trust assets because it
is something the trustee can be in control.

4. Beneficiaries: trust is not valid unless there is a beneficiary. Must be

reasonably ascertainable if you are introducing extrinsic evidence. Court
cannot appoint beneficiaries! Trust Lord can give discretion to the trustee to
define a term as in the case where trust lord left everything to friends,
“friends” is not reasonably ascertainable. So T Lord could have stated trustee
had discretion to define that, but it puts a lot of pressure on the trustee.
5. Valid Purpose: as long as not illegal or contrary to public policy.
6. Consideration: not required to transfer property through a trust.
7. Oral Trust: Yes, in CA for personal property only (including bank accounts,
stocks & bonds, furniture). You need CC E that there was an intent to create
the trust and CC E the terms were stated. Oral wills don’t exist.

Power of Appointment
 Identify in the trust if the power of appointment does even exists. Then, the property etc…
 Donor: empowers someone to appoint
 Donee: person who has the ability to carry out the terms of power of appointment. It does
not have to be the trustee.
 Appointee: re-directed beneficiary. Person or entity to whom the assets are re-directed.
Power can be limited by the trust.
 Creating Instrument: the trust, document which contains the language of the power of
appointment.
 Appointive Property: which properties, it could be all or it can be just some assets.
 Capacity: presumed w/a doc that appears valid on its face. (if no basis for a challenge to it
then state a 1 liner that capacity is presumed). [capacity of donor (creator) at time the
document was created]
o Second Capacity Checkpoint: when the power is exercised. Donee needs to have
sufficient capacity at the time of the exercise of the power of appointment. It can
also be presumed.
 Donee’s Method & Intent to Exercise: Look at how is this power to be exercised! Look at
the terms of the trust, it should give instructions about how the power is to be exercised.
Needs a writing, it can be a separate document but has to reference the specific trust, can
even reference the specific clauses but this las one is not required.

Rule Against Perpetuities

 Rule prevents “forever” when it comes to assets
 Uniform Statutory Rule: donees: each generation having the ability to exercise a power of
appointment. Successive generations of power of appointments tend to have problems. PC
21205.
 CA: 21 years after death of a life in being at the creation of the interest or 90 years. If it
vests within either of these 2 time lines then rule of perpetuities does not apply. You need a
measuring life and then go 21 years after that. No need for the measuring life to be a family
member!
 PC 21220: When there is a problem, you look at this to petition the court for a reformation
so that the document is not void. We need to see a for sure document not a maybe
problem.
 We can be liable (through negligence) to an intended beneficiaries for drafting a document
wrong (drafting it so as not to conform w/the rule of perpetuities). So always build a
perpetuity saving clause preventing the rule of perpetuities from applying (look at
jefferson’s trust).

State Exceptions:
 2 states that have modified the rule to vest within 150 years. So look at the state legislature;
11 States: 360 Years; 10 States: 365 years; 1 State: 500 years; 6 States: 1k; 3 States: No rule
of perpetuities.
 Opt-Out: state has rule but has an opt out provision in some states. NOT in CA.
 Practicalities:
o Entities (LC,LLC etc…) Corporate entity that owns real property: board of directors
have the right to sell any of the corporate assets, so they are still alienable. It is not
how long the asset has been held in a trust, but rather, how long the asset is in the
trust that the donnee has not been able to sell. Look to see who can do what &
when. As long someone (beneficiary) can sell/cash out the asset before the rule
 would be trigger then no rule problem even if they choose not to sell as long as they
have the power to do so!!
o Examples: when trusts are never ending creates a problem. If so we, wait & see.

Beneficiaries’ Interests

 Enforceability:
o SMJ: vested within the probate court. (when beneficiary wants to bring a claim
because “he is not getting what he is supposed to” he has to file in the probate
court).
o In Personum: Over the people: PC 17003
o In Rem: court also has in rem jurisdiction.
 Mandatory Distribution: trust mandates distribution, so trustee shall distribute, trustee
does not have any discretion. Look at what the trust says. “10k to Freddy but distributed in
x amount of payments, this is still a mandatory distribution.”
 Discretionary Distributions-May-But Not Absolute: “$10K to Freddy, as much as he needs
for education, health…” This means Freddy does not get a 10K lump sum but rather gets as
much as he needs for the enumerated clauses up to 10K. Trustee has discretion on whether
or not and how much to distribute to Freddy. Want & need are different! So what the
beneficiary might want is not what he needs in accordance to the distribution/trust. Also
look at potential limitations (trust for education but no limitation on the kind of education:
professional car driver).
o Trustee must:
o Fulfill the trust purpose
o Reasonable Exercise
o Fiduciary Principles
o Support is Not an Unqualified Gift: Keep the beneficiaries in the same way of living
as when the trustor was alive. ??
o Tax Planning is an Allowable Consideration: in assessing discretionary distribution
 Standing: person must have an interest in outcome.
o Arbitration Clauses: beneficiary has a claim of the administration of the trust etc…
you can’t enforce an arbitration clause upon a party that is NOT a party to the
original trust. Mandatory ADR is not valid upon anyone that did not sign the original
trust.
 No Contest Clause: purpose is to reduce litigation. When trust says if you contest and loose
you forfeit your gift. Right????**Better have a good reason or else the person forfeits the
gift. (sit down & shut up clause) Now there is a probable clause statute where person does
not lose the gift. Person must have probable clause that would cause a reasonable person
to believe there is a reasonable likelihood that the request would be granted after
investigation. Direct attack on the trust itself the distribution.
o Indirect Contest/Attack When Prohibited by Trust: Examples: forgery, lack of due
execution (where are the witnesses? No needed under a trust). (Trusts need
notarization of signature). Lack of capacity, menace, duress, undue influence,
 revocation. Attempt to reclassify trust assets. A challenge to the lists of assets (the
categorization of the assets and not against who gets what)
o Does NOT Trigger No Contest Clause: Interpretation of the terms; challenge to the
trustee’s actions or honesty (challenging what trustee is doing not what trust say)
No contest clause is not a shield to the trustees actions; beneficiary defending
individual property ownership (when beneficiary already owns part of the asset to
be distributed outside the trust) (beneficiary’s ownership outside the trust in other
words apart from the what trust says that beneficiary owns part of that specific
asset); not a protected instrument (when amending a trust re-add the no contest
clause, do it each time there is an amendment); Determination of Survivorship:
when it says “distribute equally to my issue/per capita” etc… (when no people
named specifically) so when challenging the interpretation of the term does not
trigger the clause.

 Transferability: yes. They can only assign transfer what they own. Ex. Nephew was vested
100K distributed 10K/year, so pawn shop can only cash in 10k once a year as indicated by
the trust. Same w/involuntary transfers, nephew has credit card debt, collectors can go
knock on trustees door to cash up on that distribution according to the terms of the trust.
o Spendthrift Protection: Setlord can put restrictions on both voluntary &
involuntary transfers! Look too see if the clause exists in the document. Creditors
are NOT accepted, they can’t defeat this clause. Works against tort creditors!!
Clause protects beneficiaries from their own creditors but there are preferred
creditors (one below):
 Exceptions to Spendthrift Protection: (they can go directly to the trustee &
demand payment that would otherwise be given to the beneficiary. They
only get what the beneficiary would be entitled to including time periods).
 Child/Spousal Support
 Felony/State Restitution (State & Federal are preferred creditors)
(civil liability are not a preferred creditors just criminal liability!!)
 Public Support (Except special needs trusts): someone receiving gov.
support such as disabilities, so when person gets help from the gov.
and then becomes beneficiary of a trust, then gov. can come back and
take payment for what they have paid the person. But it does not
apply to a special needs trust (where trust is limited for a specific use
and this way gov. can’t come and take the $) so when beneficiary is
receiving public benefit and trustor does not want the beneficiary to
stop receiving those benefits trustor just needs to set the trust as a
special needs trust so the gov. can’t come and pay itself back.
Another exception is if trust specifies that distribution should not
interfere w/the public support benefits. If it is a special needs trusts
there needs to be a remainder beneficiary because beneficiary does
not get the asset outright rather it is only for the life of the
beneficiary. So we look at short term and long term issues, be on the
look for that.
  Federal Tax Lien, Bankruptcy Trustees
 Income/Principal Levy Limited to 25%: if someone is receiving
benefits under a needs trust, then that is a discretionary trust, thus,
if there is a preferred creditor the prefer creditor is limited to 25%.
 Fraudulent Transfers

 Settlors’ Creditor’s Rights v. Asset Protection Trusts: Sometimes trustlord can create a trust
to protect its assets from creditors. If client maintains the power to amend or revoke their
trust then the spendthrift clause does not protect them. In CA, in a self-settled trust the
spendthrift clauses do NOT protect the assets of the setlord. But irrevocable trusts do
protect the client’s assets from creditors (we take away the power to amend or revoke
from the client). Discretion to invade the principle gives creditors power to invade the
principle! But client can have the power in regards to his income.
 ERISA Accounts & Life Insurance Proceeds: when clients owe more than the assets they
have. So in this case, client can take a life insurance policy and name the kid (for example)
as the beneficiary. This way kid does not have to use that money to pay the bills but if the
estate is the beneficiary of the life insurance proceeds then the estate has to use the
proceeds to pay the bills! ERISA accounts: is not subject to creditors…
 Disclaimers/Renunciations (waive, give up): beneficiary can renounce its benefit/gift as
long as person does it within a reasonable time from the time it was vested on the
beneficiary. But a valid these are still enforceable (IRS) tax lien, SBA (small business
associations) loan rights are also not subject to being cancelled by way of disclaimer, and
bankruptcy trustees.
o A spendthrift clause does NOT interfere with a right to disclaim!!
o Does the disclaimer of a life estate accelerate the remainder distribution?
Generally, yes, but we have to look at other trust purposes. So, if trust says purpose
to provide income to kid, and to delay distribution to grandkids then if kid disclaims
or waives their life estate then the grandkids distribution is not accelerated. Some
courts have said that a spendthrift clause can serve as a dual purpose trust even
though there is no such clause explicitly included.
Modification & Termination of Trusts

By the Settlor/Trustor
 Yes, as long as he/she has capacity!!
 Presumption: If trust is silent then CA presumes it is revocable or subject to modification.
But the Minority: if trust is silent then presumed to be irrevocable and not subject to
modification.
o We only use presumptions when trust is silent on whether or not it is revocable.
 Methods: (look at the type of trust)
o Terms of Trust: if trust tells us, then that is the method we use
o But if Trust is Silent, then we use the Statutory Method has to be in writing and
delivered to the trustee (the then serving trustee). Remember that if it is a
testamentary trust (trust within a will), then modification needs to be done w/a
 codicil to the will because the will is the controlling document. But if the trust is
inter vivos and is operating then trustee needs to be informed through an
amendment to the trust. (professor has client signed twice as settlor and second as
trustee even though they are the same person)
 Multiple Settlors: each can make changes independently as long as it pertains to their
assets (the assets that person contributed to the trust).
 Agent’s Use of Power of Attorney to Modify/Revoke: can an agent under a power of
attorney change the principal’s trust? Or change their will? NO!! Agent cannot exercise
testamentary power! Power of attorney does not give testamentary power.
o General Rule: Agent CANNOT modify or revoke the principal’s trust but we can
allow that if the trust says that the agent under a power of attorney can modify or
revoke & we need the power of attorney held by the agent to refer to the trust (it
takes both documents to be able to exercise such power).
o Power of appointment (just gives power to redirect some assets) is NOT the same as
a power of attorney! (in the power of attorney there is an agent and we need to
know where the power is coming from and it needs to be stated in the trust).
 No need for the beneficiaries’ consent as long as it is revocable by settlor!!

By the Trustee: when the Trust is now irrevocable

 Trust becomes irrevocable when the settlor dies. But if settlor is incapacitated the power
exists (trust remains revocable) but it is suspended throughout incapacitation because the
settlor does not have capacity but we are aware that recovery can be possible
 Trustee can petition the court and ask the court to modify or revoke an irrevocable trust:
o Uneconomical Principle: when it is more expensive to administer the trust that
what it is in the trust. Presumed at $40 or les!!
o Changed Economic or Tax Circumstances Unanticipated by Settlor: inflation case:
when trust prohibits trustee to invest in the stock market and the trustee cannot
keep up w/inflation. Restrictions in trust that impedes trustees to do his/her job. It
has to be unanticipated by settlor.
o Combining Simple Small Trusts or Sub-dividing Complete Large Trusts: ex. 22
beneficiaries (grandkids) w/different set of brains that think they are entitled to
different things. It is easier to divided it for everyone so they can all see what they
are entitled to. Opposite can also be the case, 22 little trusts to be distributed when
each of them turn 30, here trustee can petition the court to let him/her to make it
one large trust instead so it is easier to administrate and for economic principles
(cheaper to administrate).

Modification & Termination By Beneficiaries: when T is irrevocable and the trustee is not
doing anything to fix the problem beneficiaries can petition the court to order the Trustee to
fix the problem.
1) ANY Beneficiary when: Uneconomical Principal or Changed Economic & Tax
Circumstances Unanticipated by Settlor
 2) ALL Beneficiaries who are reasonably likely to take – UNLESS defeats material trust of
purpose. You can include language in the trust where it does not allow for distribution
prior to the fulfillment of the trustor’s intended purpose! Material purpose stating multi-
generational distribution will not be allowed. (what is not allowed, the modification or
that purpose of generational distribution?)

Modification & Termination By Law

3) Expiration of Term: T was set up for a specific period of time and the time has passed. If
there are assets left and no instruction or remainder beneficiary then when argue restuling
trust. (ex. $50dll to X for 10 years, so at the end of 10 years it is done).
4) Fulfilled Purpose: when the Tee’s job is done, then T is done. (ex. Education trust might
have a time frame or a certain goal) so we have to wait 300 days for what?
5) Unlawful purpose: if primary purpose of trust is for illegal purposes the trust will be
terminated. If this is the case, we argue “resulting trust” for trustee to be able to return
the money to the estate of the original trustor (out of the trust back into the trustor’s estate
to be distributed through either a will or intestacy).
6) Impossible Purpose: Tee can’t fulfill the purpose, we also argue/use “resulting trust”
7) Revocation: If T is revoked, then it is terminated.
8) Court authority: to determine when trust purpose has been fulfilled and to order
distribution and termination of trust.

Judicial Authority
 General rule is that a trust skips probate court. BUT if
o Ambiguity we can petition the court to file a claim
 Choice of Law: CA client can pick which law he/she wants to create the trust
with. But it can’t defeat community property, child protection &… (same as
will). Also remember attorney can’t sign on a trust drafted in accordance to
a state he/she is not licensed in.
 Apply Stated Trust Definitions & Rules of Construction. Trust can provide for
definitions but if trust is silent, ordinary meaning of words will apply even if
contrary to settlor’s intended meaning. Same as wills.
o Deviation from stated trust terms if Substantial Impairment to material Trust
purpose: In CA we need to show a “substantial impairment to a material trust
purposes” [petition to deviate to: ]
 Protect “material” trust purposes(s) [etc may vs. shall]
 Correct Drafting Error:
 Achieve tax objectives: (ex: mom gets sick and needs to be taken care of the
rest of her life, so attorney petition the court to be able to distribute while
mom was alive so they would save on tax because they had to sell the house
and storing the special gifts would be very costly and subject to high taxes
when mom died. Court accepted.
  Under Grave Circumstances: etc. earthquakes. Trustee might be temporarily
relieved from duties until everything gets back into track. This applies to
attorneys to but we still have to make every effort to back up things etc… so
you petition the court to “suspend” duties while you recoup etc…
 But, not just sympathy for beneficiaries rather we need to show substantial
impairment to the material trust purposes. Sympathy alone is NOT
substantial impairment.
 Administrative/Investment Limitations: petition the court to be relived
from investment limitations when the limitation is hurting the trust.
 Distribution Provision: getting distribution for distribution provision is VERY
difficult. Courts are NOT likely to allow it. (grandma’s trust per stripes,
where she would have technically left it to her 5 grandkids, but 3 were
adopted out so legally they lost their rights but the court allowed the
deviation because of the unilateral error since grandma did not know the
kids had been adopted out).
 Equitable Deviation: is on the rise but NOT in CA. allows deviation that is in
furtherance of material trust purpose.
 Subsequent Will: Will dated after the trust does NOT revoke the trust when
there is boilerplate language “all of my property.” If client wanted to void
the trust, you can do so with a subsequent will but the will has to specify
such action and refer to the specific trust. So boilerplate NO but specific
language CAN revoke the trust.
 Substituted Judgment Rule: when the client has special needs or is a child
but we think the trust is necessary to protect the client, we petition the
court to be able to create a document (trust) with the substituted judgment
rule).

Principal & Income Deviation: deviation from standard rules may be allowed in fairness to
income & remainder beneficiaries!
 Income: $ generated from the investment/use of principal trust assets. (ex. Rent, interest,
dividends) new $ is income. It can also be $ (revenue) from agricultural operations, Mining
operations or timber operations as well.
 Principal: asset trustee is responsible for protecting.
 Under some circumstances trustee can use some of the $ from the sale of the stock and
give it to the income beneficiary even though it is not income. Trustee looks at the bigger
picture and tries to balance things out in fairness to the income beneficiary. (Microsoft
stocks ex were Gates invested the income back in the company and income dividends then
would be shorthanded as opposed to the remainders)
Charitable Purpose Trust: rule of perpetuities does NOT apply. Sufficiently beneficial to the
community as a whole and promotes philanthropic or humanitarian purposes. Has to be
identified as a charitable purpose trust! Trustee needs to go out to the community and do
‘work.’
o Benevolence is not the same as a charitable trust. Benevolence-An act of kindness
or generosity to individuals. Is there a community/public benefit? (guy giving $
(income only trust forever) to 1,2, & 3 graders before Easter & Christmas. This was
not a charitable purpose because it was not for the community as a whole and they
might have not used the money for educational purposes, court said he was just
trying to create a monument to himself). [private benevolent trusts cannot go on
forever!]
o Charitable purpose is NOT the same as charity as beneficiary! If trustee’s only job is
to deliver a check then most likely it will be private trust with a charity beneficiary
and will then be subject to the rule against perpetuities RAP.

Special Characteristics of Charitable Purpose Trusts:

1) Favorable Tax Considerations: Federal tax exemption for the beneficiary of up to 11.2
million.
2) Ascertainable beneficiaries are NOT required as long as you have a charitable purpose
(ex. I want the trustee to help the homeless then it is up to the trustee’s discretion to
find a way to help-use the $) The charitable purpose can be related to animals.
3) RAP does not apply if it is a charitable purpose trust.
4) Enforcement By State AG’s Office: A homeless does not have standing against the
trustee of the charitable purpose trust for homeless but if he goes to the AG’s office,
then AG has standing.

Cy Pres doctrine: (as near as possible) Applicable to charitable purpose trusts ONLY. charitable
purpose that is impossible/impractical to fulfill or illegal or surplus funds for specific purpose.
[charitable purpose; impractical/impossible/illegal/surplus; general charitable intent of
settlor; modification is reasonable] Lil ol man left all his money to save dodo birds but when he
dies the dodo birds were already extinct then if lil old man had a general charitable intent to
protect the animals then we can ask for a reasonable modification of the purpose of the trust
and use it to save another endangered bird etc. (trust to save dodo birds, but the birds are
extinct before ol man dies, thus it is impossible to fulfill.) shift the purpose over to another
purpose that is not impractical or impossible to fulfill. (needs all 4 elements). You can’t use the
Cypres doctrine (as near as possible) with a private trust. Alter the trust in order to meet the
trust’s purpose.

Honorary Trusts (3rd type): someone puts $ into the trust and tells the trustee please do this
with the $. Please instead of shall because it is not subject to the trustee performing the
request. (valid but not enforceable) [ex. We hope you do x; erecting monument, care of graves,
saying of masses, care of animals.
Pet Trusts: enforceable!! You can leave $ for the benefit of the animal. $ can be held in the
trust until the death of the animal. So the measuring life of this trust can be the life of the
animal but it can also be a human life. Animal must be alive at the time of death or specify a
survival clause or whatever the gestation is (right?). Whatever animal is in existence +
whatever is in gestation at time of death. Animals are personal assets. Remainder
beneficiaries also take what is left in these (pet) trusts. Some of the remainder $ can be
released even if the animal is not dead, so caution client about excess funding in pet trusts.
Rule of perpetuities does apply. Don’t leave the $ to the pet itself/directly bur rather leave it to
someone else to use for the pet’s care. [care of definite group of animals for lifetime of
animals alive at time of Tor’s death; T for pet’s lifetime subject to ct. review for excessive
funding at expense of remainder beneficiaries; RAP applies, measuring life can be nonhuman]

The Trustee
 Lack of trustee will not invalidate the trust.
 Persons/Entities to Serve:
o Qualifications: 18yrs of age at least + of sound mind.
o Trust Instrument 1st: always look to the trust first to figure out who the trustee is.
o Consent of Bs When None Named Or Able to Serve:
 When 2 trustees and 1 dies, the surviving trustee continues to be the sole
trustee
 Someone who is a named trustee does not need to accept if they don’t want
to serve. Prepare a form.
 When no more trustees are in line to serve, the consent of all beneficiaries
is required to appoint someone. If split between beneficiaries, then you
present to the court the options and beneficiaries make their argument and J
decides.
o Petition the Court to Remove the Trustee for Cause: if beneficiary does not like the
trustee is NOT enough. BUT embezzlement, breach of duty, fraud, self-dealing,
incapacity, insolvency or bankruptcy, hostility between B & Tee, disqualification (if
care giver, witness, beneficiary are trustees then they may be disqualified due to
the rebuttable presumption of undue influence) are grounds for petitioning the
court to remove a trustee. There can be co-trustees but all signatures are needed
when this is the case.
o Attorney as Trustee – PR rules also apply: (CPAs are usually very good at being
trustees). Trustee rules & PR apply!.
o Agent under Power of Attorney is not a trustee
 General Duties as a Trustee:
1. Administer the trust (if you accept or else you can say no)
2. Loyalty: act in a timely manner & follow the T, even if he disagrees
3. Impartiality: treat all beneficiaries the same!
4. Avoid Conflict: self-dealing prohibited!
5. Adverse Trust: don’t represent a trust that has a conflict with one of your trusts.
 6. Control & Preserve the Assets: insure real estate, change bank accounts to the
name of the trustees. Trustee needs to take possession of the assets (by titling
them in his name as trustee of the trust.
7. Productivity: make the $ & assets productive. $ put it in a bank so its starts earning
interest. If stocks or bonds maybe cash out & invest it in something better.
8. Product Investments: repealed (now Prudent Investor Rule).
9. Separation & Identification: in the trust, so put name, trustee. Identify assets as
separate from their own and only in the capacity of trustees!!
10. Enforce Claims: If the T is owed $, it is the Tee’s duty to enforce those claims! ex.
Enforce eviction of a tenant that is no paying rent.
11. Defend Assets: If there is a challenge to T’s ownership of certain assets, it is the
Tee’s job to Stand & Defend the assets.
12. Duty Not to Delegate: they can hire attorneys & CPAs, investment consultants to
assist but they have to oversee (know what is happening). Trustee must do his due
diligence when choosing people to delegate/hire.
13. Co-Trustees: are responsible for each other! But if they took action to correct
situation then no liability for the one that tried to make things right. They are all
responsible for everything, the can’t split duties!
14. Skills: If a successor trustee hold themselves out to have particular skills
when it comes to administering trusts, they may be held to a higher
standard than those who do not possess such skills. ex. If bank says trust
department is the best in the world, they have to live up to the expectation. Perform
at the top tier as attorney & trustee!
 Standard of Care:
o General Standard: reasonable (not perfect) care, skill and caution under
circumstances then prevailing that a prudent person would use to accomplish trust
purposes. Reasonable care under the circumstances at the time the decision was
made!!!!
o Effect of Compensation: waiving compensation is NOT a defense to a breach of
duty, once you accept to be a trustee! If breach of duty/ies beneficiaries can sue
trustee and thus trustee can be liable! Also unpaid Tee still has duties!
o Exculpatory Clauses: OK in CA. Not for intentional misconduct, gross negligence,
reckless disregard or personal profit. excuses some mistakes but there are statutory
clauses that list things that are not exculpatory.
o Beneficiaries’ Bad faith claim: if beneficiaries bring a bad faith claim against trustee,
the court can have the beneficiaries’ trust share pay attorney fees of the trustee if
it is a bad faith effort/claim against trustee.
 Accounting & Reports:
o Duty: duty to account & report status of trust at least annually
o Contents: balance sheet, list of assets (inventory) when trustee took over and the
assets are valued at the time of death. Unless it is a complex real estate then we
might need a real estate appraisal. Bank accounts: easy, how much $ in the account.
Stocks: take the highest stock trade & the lowest and take the average. We include
the income that comes in during the administration of the trust. We subtract:
 disbursements (expenses trustee needed to pay out including bills and bills related
to the maintenance of any and all assets). We add the value of the asset and
numbers have to match. If trust calls for it (income distribution at some point in time
to x person then that is taken into account as well). If we know a big expense is
coming up we need to give the beneficiary a heads up but you don’t cash it out until
you need to. Attorney/Client privilege is not automatically protected but when in
doubt courts lean towards protections under billing under Attorney/Client privilege.
So keep 2 sets of billing as a recommendation. Clients conduct and/or litigation
problems keep separate so it is protected but billings helping the client do their job
as trustee will not be protected. If mom & pop are trustee and they choose not to
account they are entitled to not accounting. But when the trust becomes Irrevocable
theeen, trustee needs to start accounting for and this applies!
o Exceptions to Duty to Account: If trust waives the duty! Do pop & mom trustees to
each other don’t need to write the waiver in the trust so they have to annually
account for it but they can always waive it when the time comes. But for successor
trustees waiver must be included in the trust unless all Beneficiaries unanimous
decision decide to waive it. Even if waiver in the trust for succeeding trustee
beneficiaries can petition the court to make the trustee account for the trust if
they reasonable believe a breach occurred.
o Beneficiary Entitled to Copy of Trust When It Becomes Irrevocable: No copy of trust
to beneficiaries until it becomes irrevocable! When copy is sent out they have 120
days to contest (challenge: person needs probable clause even if no contest clause,
if it is found that there was no probable clause and there is a no contest clause then
they will forfeit the benefit) unless there is a no-contest clause in the trust.
 Prudent Investor Rule:
o Investment Standard: Invest w/Reas. Care, Skill, & Prudence w/Objectives of T & Bs
needs in Mind. leaving it to chance is a NO. Any investment can be appropriate if it is
part of the bigger scheme (we want a diverse portfolio).
o Individual Asset Evaluation: no legal investment is per se a breach, we evaluate
each as part of overall strategy. So, if one investment goes down and trustee
justifies that investment as part of an overall diverse scheme, he will be ok. Trustee
can delegate but they have to act reasonably in choosing the person and act
reasonably in overseeing the person making the decisions (financial investment
advisor).
o Relevant Circumstances: according to the economic conditions at time the
investment is made. He must consider inflation, deflation, liquidity needs.
o Duty to Diversify: Balanced Portfolio Theory: We want trustee to keep an open
mind in regard to investments and keep a balanced portfolio. We don’t put all the
eggs in the one basket.
 Failure to Diversify will not be a breach if justified by trust terms or difficult
assets.
 Delegation to qualified investment advisor is ok w/Tee’s oversight.
 Liability of Trustees to 3rd Parties: Tee is NOT personally liable UNLESS acted Intentionally
OR Negligently in administration of T. automobile shop in the trust, ee of the shop was
 closing the gate and it squished a customer of the shop. Customer sued the trustee
personally. Trustee must hire competent people to run the business, trustee must get
insurance!, and trustee should isolate assets (business can be set up as corporation: a legal
entity and have the trust own all the stocks so all the trust is not liable in a case like the
automobile shop).
 Protection for 3rd Parties: Justifiable Reliance on representations of authority by Tee
protects 3d party acting in good faith-Certification of Trust. if trust gives them the legal
authority to assits in a sale, then it is ok to justifiable rely upon on the statements on the
certification of trust.
 Trustee De Son Tort: if someone acts as a trustee by tortious conduct! Outside person
wrongfully interfering w/T property may be compelled to acts as a Tee. [not really the
trustee but acts as if and makes people think she is] then the court can say she is a trustee
de son tort and thus all the duties and breaches are brought upon the person!
 Power of Trustee: Even if the trust is silent there are powers conferred by law. So if no
power by trust or law, we can petition the court to confer power by equity.
o Conferred or limited by T
o Conferred by law
o Necessary in equity to carry out valid trust purpose.

2 essays (each 25%: 25 points each)

30 MC (30%)
Use ALL the facts!!!!

Class gift: granny leaves equally to grandchildren, this is reasonable ascertainable

Consideration in CA is not necessary for transfer of …..
Merger: settlor (creator/client) same as testator (he also wants a will). Setllor can be the
trustee to begin administering his assets. Likewise, he becomes the beneficiary. (trustor,
trustee & beneficiary). Historically this would trigger the merger, which is a NO. But in CA there
is an exception: if the he/she is a life-estate beneficiary, but there must be a remainder
beneficiary. If no remainder beneficiary then the trust was invalid because of the merger
doctrine! Assets would then turn into a resulting trust be up for distribution through either will
or intestacy distribution! Merger does not apply for wills because you can’t come back after
death to be the trustee of your will! It only applies to intervivos trusts. Even if remainder
beneficiary dies before settlors the merger doctrine does not apply as long as there was a
named remainder beneficiary. If this happens we apply the anti-lapse doctrine and the assets
would go to pre-deceased beneficiary’s issue.
Trustee &/or beneficiaries can amend an irrevocable trust in regards uneconomical principal,
changed circumstances BUT we first need the irrevocability of the trust, either stated in the
trust or by dead of the settlor.
Or: Presumption of joint tenancy, rebuttable.
And or anything else: presume tenant in common
Joe, Sue: primary presumption in CA is TIC, rebuttable.
 Unles “Bob & Sue as joint tenants” because then it is a joint tenancy & there is right of
survivalship.
INITIALS:
Joint tenancy needs affirmative steps to ….(break it?)
Charitable purposes are not subject to RAP. (trust has to say I want trustee to use x$ to have a
charitable purposes). But if trust says to kick $ out to a charity (write a check) then RAP applies.
Survivorship clause: 120 hours for intestacy only. Will & trust: whatever docs say if no, in CA we
only need C&C evidence of survivorship even if it is a minute or 2.
State law controls the trust.
Cause a mortis gift: if gift is given under circumstances that leads a reasonable person to
believe there is impeding peril then it is an intervivos conveyance. We need the same elements
for an intervivos conveyance. (look for the 3 elements of intervivos conveyance: donative
intent, delivery, acceptance). But when Donative intent, delivery of asset & acceptance of the
gift are all met then it is irrevocable unless gift was motivated by impending peril, then the gift
is revocable. And obviously donor has to have survived to claim gift through cause a mortis to
get his “gift”/property back. There can be constructive delivery! (means in place for the person
to be able to take possession of the asset even if it did not occur before donor died).
If he says wrote a valid will/trust: just state “per the facts the will/trust is valid.” But don’t go
through the process of proving why the will/trust valid!! Or for any other given.
Accounts of bank that are set up as joint Tenancy have the presumption that if one party
unilaterally severed the joint tenancy the other person is then gifted ½ of the account (even if
the whole account was the party that severed to begin with). Rebuttable by C&C Evidence.
Exoneration: son gets building A (asset) then son gets the mortgage/loan etc unless the trust or
will specifically exonerates the son and says “to son free and clear.”
Resulting trust: when there is a trust with no where to go, this is the method it goes from trust
to estate to be distributed either through will or intestacy.
Constructive trust: remedy when there is a dispute of true ownership of the asset. When
someone else has an ownership claim to the asset. Involuntary trustee arises out of this
situation if the person has possession to the asset but there is a dispute as to ownership.