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Trusts and Estates (Decedents' Estates (Validity (Codicil is a later…

- - - - A codicil must be executed in the same manner as a will.
      - Some states will accept an amendment through incorporation by reference such as a list of personal property if the will manifests intent to incorporate the document.
    - - Three Elements
        
        Mental capacity to execute a will is a lower standard than capacity required to contract.
        
        Testator must be 18 years old or older at date of execution of will;
        
        Testator understands the nature of the act;
        
        Testator understands the nature and extent of his property;
        
        Beneficiaries are the natural objects of his bounty; and
        
        Testator understands the nature of the disposition he is making.
        
        The exercise of undue influence requires:
        • Influence exerted on testator;
        • Effect of influence overpowers the testator’s mind and free will; and
        • Product of influence was a will not being executed but for the influence.
        
        Fraud could be fraud in the factum or fraud in the inducement.
  - - - This statute operates to save the gift when the predeceased beneficiary was in a specified degree of relationship to the testator and left descendants.
    - - Be in writing or other record;
      - Declare the disclaimer;
      - Describe the interest or power disclaimed;
      - Be signed by the disclaiming party; and
      - Be delivered or filed.
  - - - Majority rule—per capita with representation
      - Modern trend—per capita at each generational level
- - - - An inter vivos trust created by a declaration of trust by the property owner, stating the trustee holds the property as trustee in trust.
      - • An inter vivos trust created by transfer of property during settlor’s lifetime.
      - • A testamentary trust created by a will. In addition, “pour over” provisions in a will are allowed. Pour over
        provisions direct the transfer of property into a trust established either by the testator during his lifetime or by another person rather than creating a brand-new trust.
  - - - • settle or abandon trust claims;
      - • exercise all rights and powers an unmarried individual has over his own property;
      - • borrow money;
      - • sell or lease trust assets;
      - • apportion trust income; and
      - • incur reasonable expenses necessary to maintain trust property.
    - - Duty of loyalty and good faith:
        
        • No self-dealing, unless trust permits specific acts
        
        • No personal benefit other than official compensation
        
        • No apparent conflict of interest
        
        • Keep trust assets segregated from personal assets
      - Duty to preserve trust property and make it productive:
        
        • Objective standard of care unless superior skills warrant a higher standard of care
        
        • Prudent investor rule governs:
        
        • Trustee is permitted to invest trust assets as would a prudent investor, considering both the interests of life beneficiaries and remaindermen.
        Thus, the trustee must consider both the investment’s ability to produce a reasonable rate of income and the safety of the principal.
        
        • Trustee must seek to diversify the investments.
        
        • Standard is reasonable care, skill, and caution.
        
        • Some states maintain a “legal list” approach of approved types of investments.
      - Duty to dispose of wasting or non-productive assets
      - Duty to maintain accounting of transactions
      - Duty to enforce claims and defend trust from attack