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Trusts & Estates - Coggle Diagram

- - - - Fraud = in factum--misrepresentation as to nature of contents of will; in the inducement--misrepresentation as to facts that would influence testator's motivation to make will in first place
      - Undue influence
        
        Influence exerted on testaor
        
        Effect of influence overpowers testator's mind & free will
        
        Product of influence was will not being executed but for influence
      - No contest clause = attempts to disqualify anyone contesting will from taking under it; most states say ineffectual if person affected had reasonable cause to contest; enforceable if unsuccessful and no probable cause existed
      - Mental capacity = lower std. than required to contract; requires:
        
        Testator 18+ at date of execution
        
        Testator understands nature of act
        
        Testator understands nature/extent of property
        
        Benes natural objects of bounty
        
        Testator understands nature of disposition making
  - - - Partial allowed under UPC
      - Dependent relative revocation = testator revokes old will w/ intention newly execute one replaces it; if new one not made or invalid, some jurisdictions will admit revoked will to probate; need evidence of testator's intent
        TESTATOR REVOKES BASED ON MISTAKE OF LAW OR FACT WHERE WOULD HAVE MADE DIFFERENT BEQUEST BUT FOR MISTAKEN BELIEF
      - Methods
        
        Written instrument = executing subsequent will or codicil
        
        Physical act = burning, tearing, canceling, obliterating, destroying will or any part of it
        
        Operation of law = divorce after making will; all provisions in favor of ex-spouse ineffective, unless intended to survive divorce; or surviving spouse married testator after testator executed will--entitled to value of share would have receive via intestacy
      - Presumptions = will found after testator's death, but mutilated; requires extrinsic evidence to show testator's intent
      - Revival after revocation = after undergoing all formalities of making will or codicil; otherwise previous will revived only if evident from circumstances of revocation of subsequent will or testator's contemporary declarations that intended previous will to take effect as executed
  - - - General legacy = payable out of general assets of decedent's estate and not separated or distinguished fund from other things of same kind
      - Demonstrative bequest = certain sum to be paid out of particular fund (i.e. "100 shares of stock" -- bene entitled to value of 100 shares if particular fund not in existence at testator's death)
      - Specific bequest or devise = gift of specific article/other property, identified & distinguished from all other things of same kind, satisfied only by delivery of particular thing (i.e. "my car")
- - - - borrow money
      - sell or lease trust assets
      - exercise all rights & powers an unmarried individual has over own property
      - apportion trust income
      - settle or abandon trust claims
      - incur reasonable expenses necessary to maintain trust property
    - - dispose of wasting or non-productive assets
      - maintain accounting of transactions
      - preserve property & make it productive
      - enforce claims & defend trust from attack
      - loyalty & good faith
    - - trustees liable to benes when duties breached:
        
        whether authorized to perform task
        
        whether peformed to required std of care
        
        remedies:
        compelling trustee to convey property back to trust; recovering profits made by trustee; returning appreciation/profits made by trustee; returning appreciation/profits from comingled funds; punitive damages; removal as trustee
        may also be liable to 3rd parties
  - - - Settlor's capacity
        similar to testator's capacity to form a will
        
        Intent
        present intent to create now, not in future;
        no particular words required, just manifestation of intent to create
        
        Trustee
        mental capacity to administer; not a minor or mentally incompetent; corps ok (state statutes may impose addt'l reqs; settlor can name themselves as trustee
        
        Res---trust property
        settlor places title to trust property & delivers to trustee by: inter vivos transfer; or testamentary trust (testator can direct executor of will to distribute property to trustee)
        
        Identifiable beneficiary
        except for charitable trusts, trust must have definite or ascertainable benes; benes are equitable owners of trust property
        
        Proper purpose
        any purpose except one that is illegal, violates Rule Against Perpetuities, or contrary to public policy
        
        1 more item...
    - - Beneficiaries
        
        If conflicts w/ material purpose of trust, settlor's consent required
        
        If does not conflict w/ material purpose of trust, settlor's consent not required
        
        If all benes do not agree, court may modify or terminate trust when:
        
        could have been modified if all benes had consented; and
        
        interests of any nonconsenting benes will be adequately protected
      - Trustee when property's value less than $50,000 and amt insufficient to justify cost of administration
      - Settlor can revoke or amend unless irrevocable
      - Spendthrift provision
        
        bene cannot voluntarily or involuntarily transfer their interests
        
        N/A if income already paid to bene/creditors can then reach
        
        does not protect against:
        
        claim by govt
        
        claim for child support
        
        claim for spousal maintenance
        
        claim for necessary supplies
        
        claim for services rendered to bene
        
        settlor cannot create own spendthrift trust to avoid creditor's claims
        
        trustee's creditor cannot reach trust property b/c the trust owns the property
      - Discretionary provision
        
        vest addt'l power in trustee to decide when to distribute income of the trust
        
        if bene's interest stems from this provision, bene has no "right" to income until trustee distributes it
        
        trustee's discretion subject to abuse of discretion review
  - - - Indefinite benes = trust cannot be restricted to small group of peole even if benes payable for charitable purposes
      - Charitable purpose
        
        Advancement of religion
        
        Promotion of health
        
        Performance of govt & municipal purposes (parks & rec)
        
        Advancement of education
        
        Relief of poverty
        
        Other purposes to benefit the communit
        
        Can be broad
        
        Objective must be to benefit public, but settlor can have selfish reason i.e., reducing tax burden
      - Rule Against Perpetuities = limited application; trust may have perpetual existence; if preceded by noncharitable estate, charitable interest must vest w/ period of time proscribed by RAP
      - Cy pres doctrine = when designated charity not in existence at settlor's death, court may redirect trust to purpose as near as possible to charitable endeavor designated by settlor
      - Termination = if charitable trust cannot be performed as intended & reqs for cy pres not met, charitable trust terms& resulting trust in favor of settlor's estate results
    - - Inter vivos trust created by transfer of property during settlor's lifetime
      - Testamentary trust created by a will; "pour over" provisions allowed (direct transfer of property into a trust established by testator during their lifetime or by another person
      - Inter vivos trust created by declaration of trust by the property owner, stating trustee holds the property as trustee in trust