Judge Russell Austin

Probate Court No 1

Office 713-755-6084 ask for Kimberly

Home 713-522-8495 after 7 p.m.

 

WILLS TRUSTS & ESTATES

 

Tuesday, August 15, 2000

 

Will – relates to real property and Testament – relates to personal propty.  TX doesn’t require indiv to leave anything to children whereas e.g. France, ea child gets a share.  TX has incorporated Spanish Civil law into intestate succession. 

1066 under Norman system, state court passed law on whether real estate would pass from one lord to another lord—so, the royal courts controlled passage of title of real property.  The court that controlled passage of personal property was the ecclesiastical courts.  Importance of tithing, so poorer families had to pay to get their recently deceased out of purgatory.  Mortmain statutes: prohibited passage of property to charity b/c of abuse by the church by blackmailing the dying to passing property to church for fear of going to hell.  Only 3 states today have Mortmain statutes.

1750 BC Hammurabi’s Code in Babylonia see handout – great similarity to TX’s code today. 

 

Jurisdiction: 15 statutory probate courts in TX, 4 in Harris County (3 in Dallas, 2 in san Antonio, 2 in Tarrant county, 1 in El Paso, 1 in Travis county, 1 in Galveston – major metropolitan areas).  Created by legislature. All statutory probate courts are called probate court no whatever, if not called “probate” then it’s a constitutional county court dealing w/probate. 

 

“super-jurisdiction” for probate court:

A. Exclusive e jurisdiction

1)       estates: these first two (estates and guardianships) are likely to keep growing areas of law b/c as the baby boomers begin to age, retire, die in next 10 yrs will begin the largest exchange of wealth estimated to be 3-10 trillion dollars.

a.       testate = w/ will

b.       intestate = w/o will

2)       guardianships: 3 forms

a.       person: when grandma etc can no longer can for herself

b.       estate: when person in good health but mentally incapacitated

c.       person & estate: both physically & mentally debilitated 

3)       Trusts

a.       inter-vivos (during life)

b.       testamentary

c.       charitable – very popular is the SPCA next biggest church also Shriners

4)       Mental Health: in Harris Co, courts 3 & 4 handle all the mental health. From TX Govt Code chapter 25 --  no 1 gets 30% of all probate and guardianship matters, ditto no 2 then 3 &4 get 20% each b/c they do all the mental health matters.  They do 2 things:

a.       Orders for Protective custody: hearing [cost to taxpayer 2-3k], treatment for up to 21 days at MHMR (then possible xfr to private facility if private insurance covers) [cost to taxpayer 14k]

1.       based on probable cause, have reason to believe person is a danger to themselves (probable cause is an affidavit from family member or someone that shows their dangerous behavior)

2.       person is a danger to others (schizo etc)

3.       patient will deteriorate if don’t sign it – e.g.—schizo if off medication will deteriorate

b.       orders for forced medication hearings: when someone at MHMR won’t take the prescribed medication have to have hearing

B. Concurrent Juris w/ district courts when:

1)       the matter being heard is appertaining or incident to estate: §5A(b) of Probate code

2)       when a personal representative has filed lawsuit or is a dependent. §5A(c) of probate code.  E.g. if someone killed due to Dr.’s neg, wrongful death suit in dist ct, but then when estate is probated and  administrator appted then the wrongful death case is transferred to probate ct b/c personal rep is now a party to suit OR matter is incident to estate, under wither theory, probate court gets jur.

3)       In any trust matter: TPC §5B “reach out and touch someone” statute -- if there’s a case in dist ct a litigant wants to xfr, probate judge decides on whether there’s a xfr.  Often won’t xfr if there’s a trial date already set b/c statute reads MAY not Shall.  POSSIBLE TEST QUESTION: A district ct may not transfer something from probate ct to district court. See g 8 of what every lawyer wants to know about probate cts.

C. Pendent and Ancillary jur: Govt code CHPTR 25 & probate code –

1.       e.g. 80 yr. Old sick man family wants caregiver for him, fall in love, go to Vegas w/$500 mil to get married.  The family brings him back, but he’s married.  If under guardianship of estate, then he’s incapacitated and marriage is voidable. But she wants to go to family ct not probate ct, can get to probate ct under pendent jur and can null marriage in 2 wks as compared to 2 yrs in family ct. 

2.       In Re Graham: see handout – any divorce can be held so long as related to matter in court. Pg 23 Stubbs v Ortega can go straight to probate ct and file there instead of filing in family ct first in 80 yr. Old man situation.

3.       Why?  Better to have these all handled in one ct/one judge b/c efficiency of system/quicker resolution.

 

If not in area w/ statutory probate court, then get probated by constitutional county court (where judge doesn’t have to be an atty).  They can:

1.       probate will,

2.       grant letters of testamentary,

3.       administer a dependent estate,

4.       settle claims/accounts,

5.       settle estate

6.       partition estate

7.       distribute estate

CANNOT:

1.       hear any litigious matter (if file contest over appt of executor, e.g., then issue must be heard in county ct at law or district court, where the judges must be lawyers.  But can request that the matter be xfrd to a probate court rather than either of these)

 

Probate court at law jur can hear:

a.       Anything a const county ct judge

b.       Anything that is litigated

DO NOT:

a.       have §5B xfr power.

b.       Power to hear lawsuit brought by personal rep or brought against personal rep.

 

WILLS:

Mechanism by which dispose of property, but do not have to actually dispose of any property in the will. section 3 of code provides all definitions but here are some --

Testator: male person who makes will (female testatrix, etc)

Independent executor: manages decedent’s estate free of ct supervision.  Testator can make executor dependent if don’t trust executor and want ct supervisions (so must post bond).

Legatee and Devisee:

 

Thursday, August 17, 2000

 

Use Johnson's annotated probate code

Time line: Babylonian empire/Hammurabi code 1750 bc à Greeks à Romans à Germanic law codes à neo-roman (west

§3

§4

§5

Meaning of term last will & testament

§8 concurrent jur of probate ct & dist ct

meaning of in re graham & steps v Ortega cases

 

§37: basic code section for purpose of probate will in state of Texas.  Tells you  that when father prepares will and leaves to mom, at death immediately vests in mom. Also if will appts mom as executrix, apptment takes effect immediately at death of dad.  If devise 10$ specific bequest, etc other specific bequest then says I leave residue to my heirs, §37 says that vests immediately in the heirs subject to debts of the estate.  Always subject to exempt statutes in Texas, e.g., homestead exemption (§283-285 of probate code) another exemption statute in property code §42.001 and lastly, the  family allowance in §287-293 of probate code.  The last one is important – if dad dies leaving house to mom and also a lot of credit cards to be paid, §37 find a way to set aside the homestead so creditors can’t get the house.  Only 3 things can attach to a homestead: purchase money mortgage, taxes (including ad valorem) and lastly, mechanic’s and materialmen’s lien.  What about stuff in house? Concurrently  with homestead exemption application, file application to set aside exempt property (42.001) all furnishings in house, heirlooms, 1 car per family member dependent upon transportation (even if a dependent is only 4 yrs old, mom can keep a car on 4 yr. old’s behalf). §37 also allows mom to get  a family allowance, so also file an application to give mom this family allowance – prove up what they spent in previous years for amount to be set aside (tax returns etc).

            5. property left to heirs is subject to delinquent child support and continuing child support obligation whether contractual or whatever.    In above scenario, dad dies but was also paying child support when died, the other wife will go to probate court get the child support reduced to judgment then the residual heirs (not the specific legatees) will get that child support taken out of that.

            6. right to possession of decedent’s estate (after they qualify themselves) by the appted executor.  Which could be a problem for a married couple when one spouse dies and leaves someone other than the remaining spouse, and that executor comes over and takes possession of house, accounts, cars, etc.

 

§57 WHO CAN EXECUTE A WILL

1.       At least 18 yr. Old

2.       less than 18 but lawfully married

3.       less than 18 but in armed forces/national guard

4.       only condition to meet (in addition to 18 or married or in military or maritime services or national guard) is must be of sound mind

5.       to determine sound mind: videotape them and have questions on video so have proof

 

T. Jefferson: while you’re alive, you only have a life estate and when you die, your estate reverts to the state.  No right to inheritance, it is a civil right given to you by the state, and the state can take it away. 

Blackstone: no natural law theory that allows you  a right to inheritance.

 

Hodel v Irving pg 3: Justice O’Connor says the American-Indians: the right to pass on property to one’s family in particular has been part of the Anglo-Saxon jurisprudence since feudal times.  But how many Indians have any relation to                     “”.

So 500 Indians on one tract of land, keep passing down to children until someone has 1/160th interest in an acre of land.  Under Indian land consolidation act, when someone dies, unless they have a will leaving it to someone, and constitute at least 2% of the whole or worth at least worth $100, then the land escheats back to the tribal council. 

This opinion shows that don’t have a right at law to inherit anything from anybody.  In Irving Trust case, holding specifically says you don’t have a right to inherit, state can take that right away from you. 

 

But today, the Dept of Interior can’t account for the 550 million dollars that represent the fractional shares owned by the Indians. 

 

Inheritance promotes interfamily dependence, promotes young’uns in taking care of elderly parents/grand, societal benefits.

Against inheritance: promotes the economic/social schism in America, also doesn’t reward work/not merit-based and therefore encourages generations of lazy brats who don’t do anything but spend the money they inherited from mum & daddy. 

Estate tax: keep -- b/c get 26 billion/year but costs 16 billion to administer. 

 

Blum pg 18 & halbock will be on exam

Shapira pg 24: not state discrimination, but private discrimination.  State can’t enforce it, but ct upheld the will. 

 

Hinduism  à Judaism à Buddhism à Christianity à Islam

(reformed & orthodox is each)           (catholic and protestant)             and (Sunni and Shiite)

 

Tuesday, August 22, 2000

 

From last class --

1.       Jefferson believes indiv possesses a life estate in wealth, no right to inheritance

2.       Blackstone: no natural right to inheritance

3.       Blackstone:  inheritance is a civil right allowed by the state

4.       Blum--inheritance should be abolished through the progressive tax schedule.

5.       Hodell Irving tells us that the SCt believes that inheritance is a significant property right.

6.       Irving trust case -- there is no constitutionally protected right to an inheritance.

7.       Revocable intervivos trust is one of 6 substitutes for a will

8.       4 reasons for an inheritance, outlined in holbock article

9.       2 central arguments against right to inheritance

10.   only 3 states still have a Mortmain statute

11.   what is a Mortmain statute

12.   restrictive devisees tainted w/private discrimination is constitutionally protected

13.   TX probate code 57 tells us who can execute a will

14.   TX probate code 37 tells us that an estate vests immediately in an heir when a decedent dies

15.   "        "                     "                  '' that a personal rep's fiduciary standard is that of a trustee

 

Deviney v NationsBank:

(1)     look at testator's intent when construing at will; can look to extrinsic evidence.

(2)     not fee simple b/c of express condition -- only have a life estate interest.   it's fee simple when "I give Blackacre to Joe"

(3)     condition subsequent: event when occurs, grantees their estate terminates when grantor reenters land.  So here, condition subsequent is that if it's partitioned, it goes to sibling not wife/daughter

(4)     executory limitation: automatically divests grantee of title when it occurs

(5)     class gift: occurs when a devise to a group of people having some sort of relationship w/grantor or with each other; i.e. I give my property to my brothers and sisters.

(6)     What happens when make class gift and someone dies -- predecease decedent, then his share lapses in favor of surviving class members (doesn't go down to their heirs unless will specifies that), after decedent, then class member has a vested interest that passes down to his heirs.

 

Goodwin v Southtex:

(1)     Straw's authority to enter into k is important here b/c an independent executor is liable for acts of whoever you delegate duties to -- even though independent executrix didn't enter into the k, an ordinary reasonable person would've thought straw had authority so independent executor is liable.

 

PROBATE CODE

§45 -- talks about community estate and community property, on intestate death and you're married, all community property of deceased spouse passes to surviving spouse if:

(1)     there are no kids  or

(2)     if there are kids out of this marriage, then 45.2, then wife inherits

BUT 45(b) children of a decedent's prior marriage:

(1)     then surviving spouse only gets 1/2 of community property and the decedent's children from prior marriage gets the decedent's 1/2

see commentary under this § in Johanson, prior to 1993: kids got decedent's 1/2 and surviving spouse gets his 1/2.  This applies to decedents who died prior to 1993.  This is the 1st two paragraphs of the commentary under §45, will be on exam. 

 

§46 -- joint tenancies NOT JTWROS (§440 439 is JTWROS)

interest of decedent in joint estate does not go to joint owner but to estate or intestacy as if joint tenancy were severed. 

§b: says §a doesn't apply to agreements between spouses regarding their community property

 

§47 -- survival by 120 hours: if a person fails to survive decedent by 120 hours then can't inherit b/c considered to be predeceased.  Only if die w/o will.  If have will, then will probably have a survival period in there.  Reason: so not taking from one decedent's estate transferring to another decedent's estate then to that decedent's beneficiary, instead just goes straight to the initial decedent's beneficiaries.  "common disaster rule".  TX, if can't determine when someone died, then consider that person to have predeceased.  Also applies to community property, joint ownership, life insurance , etc

§47(f): if there is a living trust, etc provisions have been made that are different from this section, then the k or will or whatever provision applies to trump this statute. 

 

§58 -- interests that can pass under a will.  Every person who is competent (have capacity) can bequeath estate as they see fit.  Can disinherit someone, etc. but can't give away more than you own (can't give away spouse's 1/2).  Some  states require wife, whatever, to get so  much.  Can make specific bequests.  (c) a gift of personal propty doesn't include contents unless will directs that the contents are included: can't say I give my car to my sister and she gets the jewelry in it unless say that I give my car and its contents to my sister.  Ditto for real property, devise of real property doesn't include personal property in it -- e.g. giving sis house doesn't mean she gets the china in it unless say I give my house and its contents to sis (d) contents: tangible personal property other than title personal property e.g. clothing etc other personal property that doesn't require title transfer.  Title personal propty: needs document to transfer, i.e. car, stock. 

 

Pg 34: probate and non-probate property and §57 pg 94: probate assets, what passes under terms of will or under intestacy.  Non-probate, passes outside of will or outside intestacy.  I.e. life insurance policy -- it's a k btwn you and life insurance company k'ual obligations, ditto for IRA, the designated beneficiary gets it, not under will or whatever.  Employee benefits are also non-probate assets b/c have designated bene.  JTWROS bank accounts go to survivor, not under will or intestacy.  But for estate tax purposes, IRS includes everything probate and non-probate. 

 

§58A: bequests to trustees -- trust must be established during testator's lifetime by testator otherwise bequest will lapse (not necessarily simultaneously w/will)

 devise or bequest is not invalid b/c trust is amendable or revocable -- i.e. don't need to have irrevocable. 

Unless will provides otherwise, revocation or amendment of trust before testator's death will cause a bequest to lapse.

"pour over gift" will pours asset into trust. 

 

§58B: devises and bequests that are void --

1.       devise or bequest to atty (atty's employee) who prepares will is void (and there's a disciplinary rule preventing this) exception -- for atty's relations by consanguinity or affinity

 

§68: paragraph a -- an exception to survival language in §47: ONLY APPLIES TO DESCENDANTS (or descendants of testator's parents) 

dad has children 1,2,3 then child 3 dies who has child a and b.  under §47, children a & b are SOL b/c 3 is considered predeceased so it all goes to 1&2 but §68 allows 3's shares to go to a &b (3's kids) b/c 3 was a descendent of testator.   Whereas if dad left kids 1 and 2 and girlfriend but girlfriend didn't survive dad by 120 hours, her kids/heirs a and b are SOL b/c they don't get the §68 exception.  So kids 1 &2 get it all. 

 

opening probate = opening estate.

 

Functions of probate

1)       evidence of transfer of title/Probate a will in order to transfer title of asset,

2)       pay creditors,

3)       distribute estate either accd'g to will or to laws of intestacy . 

 

Thursday, August 24, 2000

 

            TX disciplinary rules 1.01: competency

 

            Simpson v Calivas pg 59: does atty owe duty of ® care to intended bene? B/c of 3rd party bene exception, and foreseeability (it is foreseeable that a bene would be injured) then an atty can be liable to a 3rd party bene to a will.  Collateral estoppel issue isn't a issue in Harris county b/c of statutory probate ct has same jur as const.

Greathouse v McConnell 982 SW2d 165 to see a case.  Jur is incident to the estate.

            Hotz v Minyard pg 66: privity exists b/c atty represented daughter at one time so he owed her a duty to act in good faith and not to make misreps, which he did.  Although privity may not have been req'd since TX says that privity doesn't need to be present for negligent misrep, and this guy actual misrep.  Damages?  Yes b/c she didn't fight the will when she could've. 

            Arlett: no privity req'd for neg misrep. 

            Barcello: atty retained by testator owes no duty to persons named under a will or trust.   Only TX MD NE NY OH maintains a privity bar.

 

PROBATE CODE:

 

§73: all wills must be probated w/I 4 yrs after decedent's death or file application to muniment of title and will have to prove not in default - -something beyond your control [gives the will effect].  Unless, have to receive or recover funds for propty due to estate. 

 

§75: person probating will has duty to deliver it to the clerk of the court.  Possible ways to get the will: arrested/put in jail, be held accountable for damages.

 

§76: allows an executor or any interested person to make application to probate it (interested person = a person who has a propty right or a claim in the estate)

 

§77 : order of persons qualified to serve, letters of testamentary. In this order; executor,  Surviving spouse, principal devises, then any legatee, next of kin, any person of good character residing in county, or any person not disqualified.  If want surviving spouse but have an executor, then have to show why executor should be disqualified under §78.

 

§79: a person may waive their right to serve in favor of someone else.

 

§80: alleviate creditor

 

check all forms against code

 

§83: conflicting will applications

 

independent administrator with will annexed "wwa" --  appointed by ct not by the testator, like an executor.

 

§84: procedure to prove up will in court.  Self-proved -- 4 yrs hadn't elapses, decedent resident of Harris, executor not disqualified.  Not self-proved -- W to will.  W must appear live in court or bring a deposition -- NO AFFIDAVITS.  Non-residents, can do deposition on written questions.  If all W are dead/missing, can bring in 2 disinterested W (not a direct beneficiary of the will). 

 

§86: nuncupated wills -- oral will -- back to cowboys in prairies dying without paper (toilet or otherwise).  Need 3 credible W that bear testimony that the words are the testators.  Have to speak the words and then put testimony on paper and sign it. 

 

Who maintains custody of probated will?  They will deposited in the clerk of the county it was probated in by §90.

 

§92 an heir can compel the settlement of estate after any lapse of time if it appears that the administration has not been closed.  (although other 149 and 373 provisions say you have to wait either 1 or 2 years)   

 

foreign wills: applicable statutes for probating a foreign will previously probated in other jur.  §95 and 105? File an exemplified copy or authenticated? Copy.  They also ask for judgment order or decree and the will itself.  Then file in real propty records.  If need letters testamentary, have to ask and present an order or clerks' office won't issue it.  §95b2 -- issue citations to devisees/heirs if not admitted in domicile

 

 

Tuesday, August 29, 2000

 

1.       Executor is liable for independent acts of 3rd parties to which executor has delegated responsibility.

2.       Will construction matter: testator's intent

3.       If someone devisees you, then you obtain a fee simple title to the property -- debt free "subject to" mortgage

4.       Class gift: "my children" or "my nieces"

5.       Loss gain of devisee due to condition subsequent

6.       Executory limitation

7.       Difference btwn probatable and non-probatable asset -- non-probatable such as life insurance, IRA. 

8.       *****if a H & W married, and have children born of their marriage, in event of either spouse's death, the total of the estate goes to the surviving spouse, effective 9/1/93. ******  

9.       3 categories of surviving spouse: 1) ceremonial wife (church wedding) 2) common-law  (holding self out to world, agreement, and something) 3) putative (where H & W married, she in good faith but he has a wife somewhere) when he dies, she gets some share. 

10.   Joint tenancy per TPC 46

11.   Different requirements and outcomes of 5 day survival clause of §47

12.   Ramifications of §68

13.   Callabus case

14.   Minyard case

15.   Arlett v Patterson -- no privity rule doesn't apply to negligent rep

16.   Barcello -- same as Janssen only to trust (one of 5 states that have no privity of k)

17.   Janssen: Don Janssen (SR partner of Fulbright) -- no privity of k for beneficiaries of will (3rd party beneficiaries of wills)  privity rule will probably be gone soon

18.   Latent v patent ambiguity:

19.   Preparatory v mandatory language: usually preparatory language is found in holographic wills i.e. I hope, you should,  I desire vs. mandatory language in k language, doesn't lend itself to construction, you shall, you must.  Whereas in holographic will gotta figure out what they meant

20.   Can bequeath property to trustee

21.   Void devise pursuant to §58b: if related to you in 2nd degree of consanguinity or affinity can prepare a will that leaves something to you the attorney, but not for anyone else.  Atty appointed as executor void or enforceable? Enforceable, if prepare will and going to get goodies then that's void.  But if appointed executor, then that's okay (can make money of wealthy person's estate).

22.   2 formal types of probate procedures

23.   informal: muniment of title

24.   basic responsibility in rep client (1.01) shouldn't take on a position as atty for someone unless competent to do job. 

 

Janus v Tarasewicz pg 78: in simultaneous death cases, issue is who died first.  In TX, have §47e -- survivor must survive at least 120 hours otherwise deemed to predecease.  Stnd of proof: preponderance of the evidence.  More clear cut outcome if clear and convincing? Also if had been clear and convincing would mother in-law have brought law suit for $100k?  doubt it

 

In America more people die intestate than testate, possibly b/c people think they're never going to die or don't want to think about their deaths and never make a will. 

 

§38-44 of TPC is basic scheme for descent and distribution (intestate) see handout.  Comes into play even if have a will. 

 

Public perception is that the larger the estate, the larger the children's share, whereas the smaller estate, the larger surviving spouse's share.

 

§43 TPC: per capita with representation (don’t worry about per stirpes) -- if there are 3 bene to decedent's estate, C dies but leaves D à 1/3 A, 1/3 B, and 1/3 D C's heir (0 to C)

applies to community and separate property.  Separate realty: if A owns a vacation home separately, A and B are married, have C & D kids and E a child from previous marriage.  A dies.  B gets 1/3 life estate of the vacation home.  C D E each take 1/3, all subject to B's life estate.  A's $1 mil CD that is separate property -- B gets 1/3 outright, or 333,333.33 and 3 kids take 2/3 equally.  Surviving spouse (§70) manage affairs for minor children, but when they reach age of majority, they take their share. 

§48-54 of code determines heirs.  If leave residuary estate to "heirs" then someone who you didn't want to leave anything to (left him out in the specific bequests) gets, or could get, something under the residuary when leave it to the "heirs"  -- can disinherit someone under your will, but can't disinherit someone under the descent and distribution, so have to be careful how you structure the will.  

Does TX make a distinction over property's source?  No -- no ancestral property in TX §39.  All property you receive by descent and distribution is fee simple. 

§70a: stock splits, dividends and new issues you get, but don't get any accessions to purchase options or plans for reinvestments. 

 

Thursday, August 31, 2000

 

Example of questions, from last exam. 

1.       will to daughter for $1 mil if she goes to Harvard and graduates with a 3.0. she graduates with 2.8. GPA

a.       she doesn't get it

b.       daughter forfeits devise

c.       daughter receives b/c personal discriminatory devise is void and violation of public policy

2.       A married to B, B dies and remarries C. A dies, C claims 1/3 fee simple int in propty. A's daughter claims C doesn't get it. Judge Austin rules in favor of C.  reverse or affirm? Reverse b/c it's separate property so surviving C gets only 1/3 life estate

3.       What form of ambiguity exists in a will construction when can't be carried out?  Latent patent extrinsic or intrinsic? 

4.       Qualify as executor of will, gives funds to brother who invested in high risk stock and loses $$.  Do heirs as bene have standing?  Is executor liable for loss?  Do heirs and executor share loss equally?  Answer: executor liable for loss.

5.       B wrote holographic will: I leave my $1 mil CD to my favorite charity … Roseanne Greeley.  It was written on Shriners hospital, Roseanne argues superfluous applies.  Shriners or Roseanne?

 

From last class:

1.       who may make application to pursuant TPC §76: any interested party (heir devisee or legatee)

2.       who qual to serve, what priority ct gives to the qualifications for executor?

3.       what disqualifies someone to serve as executor?  Under 18, felon

4.       whether or not a person can waive to serve as executor under §79: yes

5.       when conflicting wills are probated under §84(?) what procedure? If first will has been admitted to probate (filed, brought applicant down, proven up will accd'g to TPC, person taken oath, then that person will stay executor pending will contest) but if ct hasn't appted, then 3rd party appted.  E.g. 2 people filing will to probate, will contest, judge will appt 3rd party to administer estate pending will contest (usually a lawyer and gets paid $150-220/hr but not for people straight out of law school).

6.       §84 prove up will in ct

7.       §85 prove up will not producible in court: will not producible -- e.g. B dies gotta will, can't find original but someone has Xerox copy and want to probate (chance of getting it probated ranges from 10% to 50%).  Presumption: if can't find original of will  then the testator destroyed.  Know the procedure

8.       §86 procedure to prove up a nuncupative or oral will: history -- cowboys on range

9.       §87 written testimony requirement to prove up

10.   §90 who maintains custody of the will : county clerk

11.   §94 when do terms become effective: when it is probated, but not before

12.   §92 when heir can compel distribution: after a yr.

13.   §93 s/l for contesting a will: 2 yrs

14.   §95-104 foreign will statutes: read the paper he wrote on special procedures to learn about probating foreign wills

15.   effect of probating foreign will is muniment of title then look through 96-99

16.   § proof requirements

17.   effect of dying w/o will

18.   public perception regarding stat scheme descent

19.   pros and cons of ancestral inheritance

20.   §47c & e ins policy proceeds in simultaneous death sit

21.   evidentiary standard in brain death cases

22.   dist scheme under §43 when intestate

23.   barcello arlett: bene's right to sue atty for malp in preparation of will/trust

24.   s/l to probate will: 4 yrs

25.   duty of will custodian

26.   remedies avail for non-production of will under TPC and TRCP: TCP judge can hold in contempt, put in jail for 3 days -- under TRCP put in jail for 30-60 days.

 

TRANSFERS TO CHILDREN:

 

Does TPC allow a half sister/bro to inherit by intestate succession: yes §41b -- allows half blood to inherit but only half as much as a whole blood.  If only half bloods, then they'll inherit as if whole.

TX follows Scottish rule , not English rule (where they don't take)

 

When is a person a person for purposes of inheritance? How is social religious and economic issue of being a person resolve? Gestation conception birth?  General CL rule is birth is 280 days from gestation.  Uniform parentage act, it's w/I 300 days of gestation.  TX §41a : there shall no right of inheritance unless heir to inherit is in being.  Therefore, child must be born, out of womb, breathing. 

 

Born out of wedlock: can inherit from dad?  Texas family code provides child's right to inherit is presumed if man is biological father.  Presumption child born of marital union (or w/I 300 days after marriage), H is child's father.  Marriage means actual marriage, or attempted to get married but it's void (bigamist) or voidable (getting married w/I 30 day period after divorce).  Also paternity is presumed if parties married after child's birth and H voluntarily signs paternity stmt in family code 13.22.  paternity stmt must be acknowledged.  Or have a divorce decree that requires H to pay child support and proves up.  also paternity is presumed on basis of birth certificate (Austin doesn't like it b/c it's a presumption against some male that's the father and the informant is the mom).    Paternity also assumed if he holds out child as his child before child is 18. 

Child born out of wedlock can also inherit from maternal side §42.

            Application to determine heirship process: §48-58 of code. 

 

Child born after will made: what if will doesn't provide for after-born children in the definition § (if it weren't' for barcello and Janssen, then attys would be in court every week for malp)

§67 TPC: child left out of will.  Child takes an equal share along w/any other children named in will except that if decedent left entire estate to a surviving spouse, then that case, child takes -0-. 

 

Hall v Vallandingham pg 98: do children adopted retain right to inherit from natural parent?  MD has eliminated that adopted child's right to inherit from natural parents.  (TX and VT one of first 2 states to have adoption statutes) MD POSITION NOT TX. 

 

TX positions §40: adopted child is considered a natural child of the adopted parents - -inherits from adopted parent and adopted parent's kin and vice versa.  Natural parents do no inherit from child, but adopted child inherits from natural parents

161.206 family code: if parent-child relationship  is terminated, then ct may enter an order that child may not inherit from natural parents (b/c adoption proceedings are sealed)

162.507: adopted adult can inherit through adopted parents and natural parents, but biological parent may not inherit through adopted child.

Pg 105: same-sex parents -- partner adopts the child the other partner has thorough artificial parent, can child inherit from both parents? In Mass, can inherit from both. A lesbian rship is compatible w/parent child rship (??where), but in NY they found that (pg 107) a sexual rship is not compatible with parent child rship. 

 

A consents to be a surrogate mom, agrees B's H will fertilize the egg, which he does.  A gets $10k but after birth, wants to keep baby.  A and H are natural parents, H and A are legal parents unless A gives B permission to adopt and be legal parents.  The k is void for public policy reason b/c of the consideration. 

What happens if surrogate doesn’t want baby but A and H are splitting up and neither are genetically involved.  A wants the baby but H doesn’t (doesn't want to pay child support).  Here, k will be enforce and not enforcing it would be against public policy.  Pg 104. 

 

Can stepchild inherit from step parent by intestacy not in Texas

Adoption by estoppel when foster parents take custody of child under agmt w/natural parent(s) to adopt the child but they never carry out the agmt.   (if child relies on agmt, takes surname, etc) have equitable adoption. 

O'Neal v Wilkes pg 108: was child equitably adopted?  B/c there must be an agmt/k with child's natural parent, not a guardian or conservator under a divorce decree w/authority to enter into k but her the agmt was with Page with whom child was just living. So poor kid gets screwed.

 

Demer v Demer: grandma and granddad, mirror wills: under gram's equally to 4 kids if anyone dies then the decedents get the kid's share but granddad's said issue instead of decedent -- which ct took as a special meaning that meant from the body so the adopted adult wouldn't get anything (although it wouldn't apply to adopted children) [and but for barcello and Janssen, could've sued atty for malp b/c gdad's will was due to old form that used "issue"]

Hecht v superior ct pg 117:  disposition of sperm after the decedent's death.  Girlfriend wants it and kids don't want her to get it.  Ct reasoned that the sperm was property \ decedent has decision making authority of the sperm -- CA public policy isn't against artificial insemination of unmarried women or post mortem conception. 

 

Tuesday, September 05, 2000

 

1.       Use of terms gestation conception in birth to resolve "in being"

2.       In being rule to inherit in TX TPC 41a

3.       Presumption of inheritance right child born wedlock from gather

4.       42 a out of, always from mom

5.       predetermined child?

6.       relative rights of adopted child §40

7.       relative rights adopted adult  Demer vs. Demer and TX family code 162.057

8.       biological parent inherit through adopted adult.

9.       Whose legal mother where genetic mom puts egg in surrogate mom?  US genetic, UK surrogate

10.   What if egg is by surrogate and sperm from dad

11.   Adoption by estoppel

12.   B/P in equitable adoption

13.   What are rights of equitably adopted child under TX Fam code 162.017c

 

Can an alien inherit from a TX res? Yes §41c TPC

 

What is an advancement?  TPC §44 advancement statutes -- value of property given a intestate bene by the decedent during his life.  Sine qua non of advancement, only applies in intestate succession.  Advancement exists only if decedent or heir acknowledges in writing that the transfer is an advancement (gotta be a written acceptance or a donation)  decedent at time of gift only but donee at any time. 

Value of advancement determined  by: at the time the heir received the property or at time of decedent's death, which ever occurred first (e.g. if have a pod account or JTWROS but the value of that is not determined until death when heir gets right to account)  if donee predeceases decedent then advancement is not taken into account.

CL rule: [TPC doesn't follow CL] gift to  a child is presumed to be an advancement.  TX rule: add value of advancement to value of estate. 

Satisfaction of legacy also §44: CL assumes that an intervivos gift by decedent to a will bene was in satisfaction in whole or in part of the devise left to that person.  Case law in TX -- a lifetime gift is presumptively not in satisfaction

 

Pg 147 examination of Chinese system of determining worthy heirs -- those who contributed to decedents get the dough, those who ditched mom & dad get nada.  This extends to outside the nuclear family.  Wouldn't work here b/c China is very rural whereas US is much more mobile, less nuclear, hyphenated Americans like Asian-American (??? What the hell does this have anything to do with this?)  in 1956 passed §423 -- required a spouse or parent or adult child to take care of child/dad then this was upheld in redwood 552 SW2d something in 1977, then in 1988, 14th ct in Reynolds v Firestone said non-custodial parent of an adult has no obligation to support, 1993 repealed §423.  1997, §776A -- ward (mom or dad in nursing home etc)  have obligation to take care of child? 

 

Troy vs. Hart pg 151: L in hospice w/cancer, his sister dies who leaves him and 2 other sisters her estate then one of the sisters decides to get L to sign disclaimer of the estate.  So L's power of atty person files suit, sister hires atty to get L to drop suit and revoke power of atty.  L's power of atty person stops this.  MD followed NY rule in that must inform Medicaid w/I 10 days of receiving the inheritance, but before could, the sisters took his money, atty for sister said will cover the reimbursement for Medicaid.  (he's dead)

TX -- miller trust, to avoid spending your heir's inheritance, put all money in miller trust then the trustee spends $$ for your benefit but you also get Medicaid benefits.  And then theoretically, when you die, trust will reimburse the state for the care.  But in state of Texas, there's no one to notify and reimburse, so family gets to keep the money.  PI Yi Mao is the guru of Medicaid/care/miller trust.

 

In re Mahoney pg 141: general rules of descent provide that decedent w/o issue's estate goes to surviving spouse but here, she was killer, so VT had no law.  3 choices:

1.       passes to spouse whether or not spouse was killer

2.       if you're slayer, you don't get it

3.       spouse is constructive trustee and must pass on to parents

chose #3 but depends on whether voluntary or involuntary manslaughter, so have to go back to circuit ct to determine whether there was intent

 

In Texas, §41d : when a bene kills principal -- insurance proceeds: policy proceeds go to contingent bene if no contingent, then goes to nearest kin, TX ins code 21.23.  same as VT for intestate, constructive trustee. Accomplice loses too.  TX rule also applies to negligent homicide. 

If die of  suicide, inherit same as natural death.

 

When is a case over? If can't get criminal conviction, got to civil ct for wrongful death then if that's doesn’t work, go to federal ct for civil rights action. 

 

Thompson v Mays supp cases: TX rule impose constructive trust on bene's inheritance when it is found that a bene intentionally and wrongfully caused death of testator.

Simon v Dipple supp: H killed W, exception to code under 41a if kill due to insanity, rule doesn't apply (b/c cant be willful since he's crazy)

 

§37A: disclaimer statute -- a will bene or life ins been or surviving party to survivorship estate -- recognizes that no one can be compelled to be a bene of another person's gift.  If disclaim a gift, then law treats you as having predeceased the decedent.  No take backs

 

Who can disclaim:

1.       executor or administer can disclaim on behalf of decedent, for estate tax purposes, or

2.       a guardian on behalf of incapacitated person

3.       guardian ad litem on behalf of unborn unascertained or incapacitated person

4.       agent under 499 of code (statutory durable power of atty act)

why disclaim:

1.       tax purposes (if disclaim, then IRS treats as never having owned or received that property, so gift over to heirs or 3rd parties which will be tax free

2.       to avoid creditors

 

when:

1.       bene of gift intestate can partially or complete disclaim w/I 9 months of decedent's death.

2.       Must in writing

3.       Must be notarized

4.       Must be filed in probate ct

5.       Copy to executor/administrator

 

If disclaim:

1.       Can't revoke,

2.       Can't designate who gets the gift

 

Charitable bene: §128 can disclaim gift but charity must be notified w/I 30 days of oath of executor then have 9 months from that 30 day period to disclaim (some charities will disclaim real estate b/c of environmental reasons i.e. it was a superfund site)

 

Can disclaim life estate? Yes

Can disclaim future interest? Doesn’t have to be disclaimed until future interest is no longer contingent.  However, all these are rules of disclaimer under TPC §37a but have other rules under IRC which requires disclaimer w/I 9 months of decedents' death unless minor in which case must disclaim w/I 9 months of coming of age. 

 

Assignment of property vs. disclaimer: §37B - -reverse of disclaimer, for some reason, you assign whatever you inherit to some one else.  But the assignor pays the taxes so have to be careful of assignment vs. disclaimer.  Can require be in writing, be filed in probate court. 

 

Leave someone $100k in trust, and sis is trustee can you assign trust to sister to avoid spendthrift provisions?  No.

 

Thursday, September 07, 2000

 

1.       rights of murderer to inherit

2.       when a constructive trust will be imposed generally

3.       Texas position on suicide and inheritance

4.       Application of the constructive theory upon principals and accomplices in TX

5.       Disclaim theory pursuant to uniform probate code

6.       Disclaimer theory treated in TPC

7.       Effect of disclaiming a trust interest

8.       Who claim disclaim a gift: anybody

9.       What purpose of disclaimer: avoid estate taxes

10.   When you can disclaim : up to 9 months after decedent's death

11.   Can charity disclaim: yes, but charity must have 30 days notice of gift then 9 months runs after that period

12.   Effect of a untimely disclaimer

13.   Rules of disclaiming a life estate and/or future interest: fut int when it vests (no longer a contingency attached to it)

14.   Difference between a disclaimer and an assignment

15.   Estoppel theory as it relates to a disclaimer: someone dies leaves you something in will, executor calls you and tells you cash the check, spend part of it then contest will, can you contest will if taken part of the bequest that was given to you? No -- once taken any benefit you are estopped from contesting. 

 

Nell v Yett supp case: s/l case under TPC §93-- have 2 yrs to bring your claim and that's it. 

In re Stritmatter pg 159: an insane delusion is a legal, not a psychiatric concept.  During will contest, can't ask doctor the ultimate question of whether testator was under insane delusion b/c no greater weight.  Insane delusion: idea that has no basis in fact or reason and testator adheres to it no matter what. If testator insists that H or W no longer loves him/her, and continues to believe that no matter what proof or H or W says this is not an insane delusion b/c love is subjective.

An insane delusion can be grounds to set aside will when a contestant's proof is sufficient to show that the terms of the will were directly influenced by the insane delusion (like making a ridiculous bequest to some org or country. 

In re Honigman pg 166: will upheld b/c marital love is subjective

Reynolds v. Park supp case: The landmark

case of Brown v. Mitchell, 88 Tex. 350, 31 S.W. 621 (1895), held that a witness, whether lay or expert, may not give testimony

which is a legal conclusion as to whether a person has the mental capacity to make a will.  But a lay person can testify as to the 4 elements:

  1. know the extent and nature of your propty [you know that your property is community, where it's located, etc]
  2. objects of your bounty [do you know who your kids are, parents, etc]
  3. understands the transaction involved [understand you are making a will]
  4. understands the above 3 as whole [that you're making a will, that will represent distribution of your property to the following persons and their relationship with you]

 

In re Horton supp case wills 4: headnote 9 gives elements of mental capacity, also code §10 of commentary section (read commentary section on will contest***) also Johanson's commentary section is the BarBri review for wills/probate.

      Mental capacity and sound mind are two different legal terms with separate meanings.  Sound mind doesn't equal mental capacity, although some COA mesh the two together. 

      To contest will: contestant must have a direct pecuniary interest that would be affected by probate of the will. E.g. creditor would NOT (only on intestate decedent -- this is a high dollar estates where lawyer gets appointed)

      If issue is raised whether someone has standing on if can contest: do motion in limine hearing.  §243 of code.  If contest filed before appt, then 3rd party neutral appointed but not otherwise.  In will contest, all bene and all decedent's heirs must be made parties. 

 

Tuesday, September 12, 2000

 

1.       §93

2.       creditor cannot contest

3.       creditor can open

4.       all members of class must be represented

5.       questions of standing are resolved by motion in limine

6.       executor's right to defend

7.       estoppel

8.       necessary parties

9.       4 things for testamentary capacity : knowing nature and character of property, objects of bounty, understanding disposition making.

10.   testamentary vs. k'ual capacity: must have more capacity to enter into k to rotate tire than to execute a will

11.   some of evidentiary matters that directly bear on testamentary capacity: past conduct, incompetence, testimony

12.   def of sound mind and mental capacity from evidentiary standpoint

 

Burden of Proof

proponent of will always has B/P to prove up will (so gets to start): need to show testator was of sound mind on day she executed, that it was witnessed, self proven and attested -- the formalities of the execution of the will.  Self proven: §59 -- affidavit back of will that testator came and signed will, witnesses signed, all formalities were followed, all sign off on affidavit. But self proving affidavit isn't integral part of will and doesn't do away with B/P.

            once proven up by proponent and admitted to probate, then the B/P shifts.

What was state of mind of testator on day will was executed -- lucid or not e.g. if will executed in Jan 3rd, and in Nov of previous year he was sent to a psych hospital for 72 hours does this show state of mind on day will executed in Jan?  no -- may go to weight of evidence, but doesn’t make will invalid.  If a month later diagnosed with paranoid schizophrenia, that still doesn't make will invalid just goes to the weight, along with Dr.'s testimony and lawyer's testimony.  If in march of 2000, he is declared incompetent by a court, that still doesn't make will invalid and is inadmissible.  Why isn't court's declaration that he's incompetent good evidence? B/c the standard for being declared incompetent is different and \ inadmissible. 

 

Undue Influence

            Coercion.  If there is no coercion involved in transaction, left with simple influence.  Is sexual activity coercion?  Accd'g to Lord Hannen pg 175-6, no.  Coercion is when a decedent would say that (if alive) this is not my wish but I must do it.  Several types of rships tend to put parties into this situation -- atty-client, Dr-patient, shrink-patient, and caregiver-elderly patient. 

 

[Grounds for contesting will:

·         Under

·         Improper execution: when everyone is supposed to be in room, but W aren't in presence of one another or notary, etc

·         Lack of testamentary capacity

·         Fraud

·         Mistake

·         Testator didn't know contents of his will]

 

Contested Will:

1.         appoint temporary administrator (attys really want these appointments b/c usually a large estate, learn a lot from the contest, makes a ton of $$)  this assumes that no executor was appointed b/c that person will remain executor throughout will contest, even if there's 2 or more competing will.  First person appointed to any will, will stay appointed. 

2.         Powers of temporary administrator: §132, powers that judge gives.  You prepare the order and judge will decide what you get and what you don't.  anything you do as temporary administrator that judge didn't grant power to do, then the act is void and you're stuck with the liability.  Can also petition to have powers expanded. §294-296 and 146-7

3.         In independent administration, ct has limited participation.  Independent executor doesn't have to follow procedure under TPC.  Joe dies, Joe's bro is exec, mortgage company wants to get paid -- can mortgage co file foreclosure against executor or have to go to ct for the claim?  Just file foreclosure b/c executor stands in shoes of the decedent.  Whereas w/o will, then mortgage co must file in claims procedure in court.

4.         Notice for unsecured creditors: executors must give actual notice of appt to unsecured creditors w/I one month of appointment.  If comptroller of public accounts, by certified mail (for taxes) otherwise, done through publication of a newspaper of general circulation (daily court review or the Houstonian not the Chronicle) 

5.         Unsecured creditor may file a claim at any time before estate is closed. Only way to cut off unsecured creditor is under §294(d) -- give actual notice by cert or reg mail to unsecured creditor and expressly state that they have to present their claim w/I 4 months or their claim is barred.  A lot of these big credit card co don't file in time or use forms that don't comply with TX statute so can reject it, and save estate ton of money

6.         Secured creditor: must give notice w/I 2 months of qualification by cert mail.  When Mortgagee files suit, executor has 6 months from notice of foreclosure to respond.

7.         What about secondary executors? (if the executor dies) They don’t have to give notice all over again.  If you fail to give timely notice in compliance, you end up with personal liability. 

8.         §243 -- before 5th sentence: first part is about executor defending/prosecuting a will; after 5th sentence is about devisee/legatee/beneficiary prosecuting/defending will.  Will contests are $$ and lawyers get paid under this section (expert fees, associated attys etc) to get paid under §243 must submit jury charge issue -- executor brought action in good faith with just cause.  And trier of fact must make an affirmative finding of fact that executor brought action in good faith and with just cause. 

9.         Evan v may: supp case - - elements of undue influence in a will contest: the will contestant must prove:  (1) the existence and exertion of an influence;  (2) the effective operation of such influence so as to subvert or overpower the mind of the testator at the time of the execution of the testament;  and (3) the execution of a testament which the testator thereof would not have executed but for such influence.   The burden of proving undue influence is on the contestant to prove the allegation by a preponderance of the evidence.  The contestant didn't prove these elements and unnatural rship     doesn't constitute undue influence.

10.      Johnson: atty should've told client to get bank to manage portfolio, get a real tax atty, tell client options!

 

Thursday, September 14, 2000

 

1.       what undue influence is in real world

2.       is it grounds for will contest?

3.       What does court generally do to admin estate when there's a will contest

4.       What are the basic statutes relating to claims presentiment in payment

5.       Notice reqmts for secured and unsecured (un--notice w/I 1 month, secured w/I 2 mos)

6.       How the expenses of defending a will are satisfied pursuant to §243 (top to executor, bottom to heir/devisee

7.       Elements of undue influence

8.       3 evidentiary stnds of undue influence

9.       applicability of the in terum or no contest clause

10.   procedural reqmts for jury finding on no contest clause (good faith and just cause)

11.   B/P on will contest

12.   When confidential relationship may rise to a presumption on undue influence

13.   Use of declaratory judgment to circumvent no contest clause

14.   When a sexual rship may constitute undue influence

15.   Applicability of an unnatural rship such as lifemates & that arrangements applicability to undue influence, if any

16.   Disclosure reqmts of atty pursuant to accepting fiduciary relationship under a will

 

 

Fraud

consists of making that which is false appear to be true to testator.  When a devise under will is a result of fraud, will and gift are invalid. 

 

Must prove:

1.       speaker KNOWINGLY made a false representation

2.       the false representation was made with the intent to deceive the testator

3.       testator was ignorant of the falsity

4.       the testator RELIED UPON the false representation and thereby made a will or made a gift under the will that wouldn't've been made otherwise

 

types of fraud:

1.       fraud in the execution: false rep made as to the nature or contents of the instrument

2.       fraud in the inducement: when false rep made that influenced testator's motivation for making the will or for making a gift under the will

 

Latham v Father Divine pg 215: extended constructive trust theory

Something (supp case): is a suit for tortious interference a will contest?  No

Thomson v Deloitte (supp case):  no cause of action for the lost oppty to prevent someone from changing will

Jennings v surp? (supp case):  any devisee or heir/legatee is an indispensable party to a will.

 

S/L for fraud.  4 years from the date of the fraudulent act.  Intentional act from receiving an inheritance. 

Tortious interference: actual or constructive intentional or un w/a person's right to receive an inheritance.  tortfeasors is liable  for the loss of the inheritance or the gift.  NOT a will contest (not questioning the validity of the will) no the no contest will provision isn't triggered.  S/L is 2 years from the time of discovery or when a ® person would've discovered the tort.

 

How to distinguish fraud from mistake: H &W use same atty, their wills get messed up and they sign each other's will, in the absence of fraud or undue influence, a mistaken belief by testator that affects the will or a devise under the will is not admissible.  Not admissible b/c then everyone would claim there's a mistake in the will -- slippery slope.

 

MISTAKEN OMISSION: without fraud or undue influence, no extrinsic evidence allowed to show testator mistakenly omitted a will provision.  Plain meaning rule: prohibits introduction of evidence that contradicts the plain meaning of will unless there's latent or patent ambiguity).

Latent or patent ambiguity: e.g. a latent ambiguity exists when the will's language is clear on its face but when applied to the facts and circs before you, amounts to a mis-description.  Like if judge left Blackacre to niece Marisa, but decedent doesn't have a niece Marisa, has a cousin Marisa, this is latent ambiguity.  Patent ambiguity: when it appears on face of will.  Judge writes will I leave my estate to my beloved son Russell Austin, but he has 2 sons, Russell Parker Austin and Russell smith Austin, this is patent ambiguity

 

·         Presumption that any person who executes will knew contents of will, have to overcome that presumption.  But will could be contested based on claim that the testator didn't know contents of will.  E.g. testator is blind, or is illiterate. Or a foreign language speaking person whose will is written in English. 

 

·         In terroreum clause (no contest) clause: TX will enforce this clause, but is strictly construed (give person every benefit of doubt).  One way to get around is to get finding by trier of fact that action was brought in good faith and with just case (and can't be brought up on appeal). Not triggered when file for a final accounting, contest distribution or the appointment of an executor or guardian of a minor child.  or file declaratory judgment action. 

 

Tuesday, September 19, 2000

Next Thurs is a short class with a substitute.

 

From class 10

1.       what constitutes fraud in TX

2.       what must prove to obtain a finding of fraud

3.       what are types of fraud as it relates to wills

4.       what is fraud in the inducement

5.       "       "  fraud in the execution

6.       doctrine of constructive trusts as it relates to fraud in will

7.       prohibition of §69A of TPC

8.       tortious interference w/inheritance

9.       cause of action for lost opportunity to prevent someone from changing will (don't have in TX)

10.   who are indispensable parties in will contest (all heirs devisees and legatees)

11.   CPRC (civil practice and remedies code) statute of limitation of 4 yrs as it relates to fraud

12.   Distinguish mistake from fraud

13.   What constitutes mistake

14.   What constitutes mistake in omission

15.   Admissibility of extrinsic evidence re: issue of mistake

16.   Plain meaning rule (2-3 exam questions)

17.   How to use extrinsic evidence to prove up latent or patent ambiguity

18.   Grounds for will contest

19.   Effect of will contest

 

 

Chapter 3 -- Wills: Formalities and forms

§A: Execution of Wills:

1.       who can execute wills: §57 --

a.       18 yrs old  or

b.       lawfully married (ceremonially or Cl)  or

c.       member of armed forces or auxiliaries thereof   or

d.       maritime services and

e.       plus have to be of sound mind

2.       what is a will:

a.       a testamentary instrument that is revocable during your lifetime but operative only upon your death

b.       may or may not dispose of your property -- may only appoint an executor, but will doesn't necessarily need to appoint executor. Will make only revoke previous wills.

c.       may only direct how property is NOT to be disposed of -- §58b -- Negative bequest will.  A trust document can also direct how propty is not distributed -- §112.053 of property code (trusts may contain direct as how property is NOT to be distributed in the event the trust should fail or terminate for any reason or you revoke trust)

d.       must be testamentary intent -- letter of intent is not testamentary instrument.  If see words my last will, creates rebuttable presumption that document is a will

e.       codicil: alters, amends, modifies a will already in existence.  Must be executed with like formalities as a will.

3.       3 types of wills generally recognized in TX and a possible fourth

a.       testated: typical will by atty, executed by testator, at least 2 W, may or may not have a self proving affidavit (allows court not to require W to be in court when will is proven up 20 something yrs later)

b.       holographic

c.       nuncupative (oral) will: to allow personal propty ONLY, have to be made at time of death and at place of last illness. (also other stuff about # W etc)

d.       conditional: operative only if some condition is satisfied -- TX is a switch hitter on the issue of conditional wills. Some jur only say it's indicative of testator's intent others only look at the four corners. 

4.       Prerequisites for enforceable attested will:

a.       must be signed by testator, or by someone else (if illiterate or something) with 3 credible W who will attest to the sig (Jo Jones by Bill Smith)

b.       must be W'd by 2 W -- must be disinterested W who are in sound mind and at least 15 yrs old (must be over the age of 14)

c.       W must sign in presence in of testator

1)       line of sight rule test: testator actually sees W sign will

2)       conscious presence test: the TX view.  Will doesn’t have to be witnessed directly in front of testator but if testator had been so disposed by exerting some physical act, he could have seen W sign will (e.g. cancer patient is dying behind a screen where W are signing will, had he leaned over, could see person sign the will-- had they signed across the hall, wouldn't be good b/c can't see through the wall) limitations: testator's slight exertion presumes W's being in same area. [point being that W not being in same room doesn’t count]

a)       order of signing: no order required.  However, signing process must be all part of one contemporaneous process (testator can't sign on Monday and W sign on Tuesday)

b)       not required:

i.                     testator doesn't need to publish the will

ii.                   testator may sign will anywhere in the will (doesn't have to be signed at the foot [end/last page] of will)

iii.                  \w do not have to sign in presence of one another but must sign in testator's presence

5.        In re Groffman line of sight rule, inapplicable in Texas. If delineation (notes on will) made before will was executed then okay, after will is executed, then interdelineation is NOT a valid addition to will, but doesn't make whole will invalid. Presumption is that it was made after, so will strike the notes whatever it did (devisee, negative bequest or appoint, whatever)

6.       Holographic wills:

a.       must be wholly in handwriting of testator. 

b.       Need not be dated. 

c.       Testator's signature can appear anywhere. 

d.       Can be written on anything -- on back of Randall's receipt. 

e.       Supurfluage -- extraneous words not necessary to complete will.  Extraneous material must not be apart of will and incorporated into will.  I.e. if will is written on hotel stationary, then disregard preprinted hotel name and address, but if he devisees a gift to the Westin hotel, then the preprinted matter is part of will and doesn’t count -- b/c a holographic will must be WHOLLY w/I in HANDWRITING.

f.         Must be testamentary intent

g.       These are the most contested -- too much preparatory language

h.       Can't change beneficiary designation of a nonprobatable asset through the will

7.       §84 -- how to get a will admitted to probate (assuming regular attested will, bring down 1 W to court) or can prove up will through interrogatories.  If both W are dead or gone, bring down 2 DISINTERESTED W who can testify to the testator's signature.  If can't find 2 disinterested, can bring 2 disinterested W to testify to one of the W's sig. 

8.       Presumptions to attestation clause: appears below testator's signature and above W's sig.  Attestation clause: recitation that all formalities of will have been followed.  This is prima facie evidence that the will is valid.  However, the presumption of validity may be substituted for a W's faulty memory.  Different from self proving affidavit

a.       attestation clause is corroborative only

b.       self proving affidavit is evidentiary, serves in place of testimony (sworn statement)

c.       Borne exception: if sign self proving affidavit instead of sign on last page, can substitute sig on self proving affidavit for sig on will, but can not use self proving affidavit thereafter

d.       Fact that W is a bene as well as attesting W doesn't' invalidate will -- §61 purging statute: eliminates gift to become disinterested W. 

e.       Saving statute: §62 -- provides that the bequest is not void if the testimony of the attesting W who's also a beneficiary can be corroborated by disinterested and credible person (like atty, or atty's employee)

9.       Estate of Parsons pg 236:

10.   In re pavlinko's estate pg 247:  no latent or patent ambiguity

11.   IN re rainy:

12.   In re kimmeL : a holographic will can be in form of letter.  Need testamentary capacity

13.   Nickels v rowen:

14.   Conscious presence test:

15.   Short v short: need 1 W to prove up will in court

 

 

1.       who may execute will

2.       reqmts to execute will

3.       reqmts for codicil

4.       negative bequests

5.       TX property code 112.053 allows a trustee to direct how property is not to be disposed of similar to probate code

6.       What types of wills are recognized in TX (attested, holographic, oral)

7.       What is conditional will

8.       Requirements for enforceable attested will

9.       Order of signing will in state of TX

10.   Not required in will in TX in execution ceremony

11.   Difference between line of sight and conscious presence

12.   Holographic will

13.   What is surplus rule w/regard to a holographic will

14.   How we prove up will to be admitted to probate

15.   presumptions we give to an attested will

16.   Difference between attested will and self proven will

17.   TX rule regarding devise to a W §61 of TPC

18.   Applicability of savings statutes as to a W under §62

19.   Inapplicability of saving statues to become a disinterested W

20.   Inapplicability of an estate to cure a will execution

21.   Rule of substantial compliance  in TX (after boren)

 

 

Revocation: only by statute -- no CL revocation

§63: 2 basic ways

1.       subsequent will or subsequent writing: like codicil , or a declaration in writing with similar ceremony as the will itself

2.       physical act: simply scratching out is nsf (but could be in other states)

 

divorce -- by operation of law, results in a partial revocation of will

could also leave something to a W and that portion of the will is revoked.

 

 

Harrison v Burg : hasn't done anything additional to revoke will so wouldn't meet TX reqmts, but if had ripped it up, so would've been suff.  Duplicative wills: presumption is that if can't show every will  that person wrote, then assumption is that revocation of one will revokes all of them. 

 

Thompson v Royal : will not revoked b/c voiding paragraphs wasn't entirely in her handwriting and wasn't attested so  revocation wasn't good and there was no cutting, tearing, burnings whatever, so doesn’t revoke. 

 

2. Dependent relative revocation and revival: not accepted in TX (too many problems in determining what someone intended after they died).  Executed one document then another document, intending revoke 1st one but it was based on mistaken assumption (?)

 

            Carter v First United Methodist church of Albany pg 286:  interlineations aren't valid revocations of a whole attested wills.  If it was holographic will, then interlineations are okay, but must resign document (really republishing will as of date of note)

 

If have attested will, with interlineations, needs initial on every change b/c then people will raise questions on whether changes were made before or after execution ceremony

 

Estate of Alburn pg 292: have will #1 and #2 and number 2 says I revoke all prior wills but then tears #2 and thinks this will revive #1.  Can't go back to first will, but b/c she was revoking the will by mistake, then the second will is revived. the result would be intestacy b/c TX doesn't allow dependent revocation.  TX doesn't allow it b/c too difficult to determine a decedent's intent since decedent is dead. So to revive a will in TX, can only execute a new document that revives it w/all formalities of a will (W, testator, self proving affidavit). 

 

Physical acts to revoke: would tearing a corner be suff? No.  but tearing it in half, even if it's only one page of a 150 page will is suff.  Writing at the top is nsf in TX also. 

Writing w/will executed w/formalities: can revoke an attested will with a holographic will or vice versa, can revoke with a codicil, can revoke with a document w/all the formalities of the will and meets the reqmts of the will.

 

 

Revocation of wills by operation of law:

Divorce -- §69, all bequests to spouse are void after divorce. Also, if ex is named fiduciary in will,  that designation is void also. 

Smith (supp case) -- this result was codified in statute. §69b

If already divorced and want to leave something to ex, then that's okay. 

There's also a statute on life insurance, but in us SCt -- would ERISA preempt state law (if insurance is under ERISA would TX divorce revocation law be preempted to let ex-spouse keep ERISA insurance)

TX Fam code: 7.005: insurance of spouses -- if divorce decree gives the policy then get it.  But if divorce decree doesn’t mention, then it's community property

Will Witnesses:

Saving W bequests -- § 62  as long as will can be proven by another W, W who was a beneficiary can keep it.  Just can't be testifying to the will to get the bequest.  Must do it at time will is probated -- this is the moment that determines.

 

 

 

To revoke:

a.       Need testamentary capacity

b.       Need like formalities as long as meet reqmts for will in TX

 

Most common method of revocation is execution of a new will

1.       Document of implied revocation: have two wills -- first will says I leave everything to A and 2nd will says I leave everything to B but 2nd will doesn't say that revoke 1st will ct will look at it and say there's implied revocation.   But presumption is against revocation.  If 1st will says I leave my house to A and 2nd says I leave car to B, ct will read them together

2.       Operation of law revocation §69 voids portions of will benefiting an ex-spouse when will was written before divorce and the will constitutes to exist after the divorce

3.       If remarry spouse, then it's moot issue -- only what happens at time of death matters

4.       provisions of will become null and void if leave something to w and can't corroborate otherwise

5.       procedure to look at if W is a bene

 

physical act:

1.       destroying it burying burning it, etc must physically injury it.  Writing void also nsf -- doesn't physically injure it and doesn’t fulfill requirements of a will in TX.

2.       must have testamentary intent -- physical act and intent must be present together.

3.       Partial revocation -- no such thing in TX, except in holographic will, can modify document (which is really republication of will) which can't do to a typewritten or attested will.  If someone only destroys part of will, with no intent to destroy whole will then whole will shall be probated including part of provision intended to revoke. 

4.       Physical act must be done by testator or by someone at testator's direction and in testator's presence. 

5.       B/P: until will is admitted to probate, burden is on proponent, including revocation.  If can't produce will, presumption is that it's been revoked.

6.       After will is admitted to probate, then proponent won and shifted burden. 

7.       Rule of revocation with duplicate wills: if don’t have all wills at court when probating will, then presumption is that they're revoked. 

8.       Revive an earlier will: not in TX, maybe other states.  Once revoked, revoked for all purposes.  Can republish it -- resign like did the first time.  Or, codicil and incorporate terms into the codicil.

 

Tuesday, September 26, 2000

 

Class 12:

1.       the methods by which will can be revocated, pursuant to §63

2.       capacity as a requirement for will revocation

3.       revocation by operation of law under TPC §69 e.g. divorce

4.       effect of divorce on non-probatable assets

5.       the common methods of revoking a will (most common tear it up)

6.       doctrine of revocation by implication

7.       doctrine of revocation by physical act

8.       inapplicability of partial revocation by physical act

9.       doctrine of partial revocation by interdelineation

10.   B/P in will revocation belongs to ?

11.   Non-probatable will offered to revoke an earlier probated will?

12.   Can revive an earlier revoked will?

13.   What is doctrine of dependent relative revocation?  Apply in TX? NO.

 

 

Cutler v Ament  supp case:  will w/self-proving affidavit, but it has to be subscribed and sworn to, but wasn't sworn to here, so not valid aff but doesn’t invalidate will.  Now have to prove it up through W but if W aren't available, then 2 disinterested W to testify to testator's sig.

 

Section C: Components of a will

1.       integration of wills: was will complete when executed -- all papers were present at time of execution.  Stapled, bradded together creates presumption that it was all together.

  1. two doctrines -- extrinsic evidence allowed to prove up

1)       doctrine of facts of independent significance -- permits extrinsic evidence to id will bene or property passing under the will.  E.g. have crappy car, make will leaving it someone, buy new car, bene gets which?  New car b/c motivation behind buying new car was to have a new car, not change testamentary thing.  Also to id bene -- in 1970 employer leaves -ees each $1k upon death.  In 1995, two of them hired, 2 new ones hired.  Dies in 2000 are old employees still bene?  No b/c law presumes his firing and hiring people isn't testamentary claim -- acts of significant independence.  As it relates to property -- devisee of personal propty doesn't include contents thereof unless otherwise specifically stated.  Devise of real property doesn’t include any personal property or contents thereof unless will otherwise provides.  Bank safety box -- 3 things can be removed: deed to burial plot, insurance policy and a will.  Can't take asset of personal property that is titled -- so if get the "contents of safety deposit box" that EXCLUDES any titles.

2)       doctrine of incorporation by reference: allows a document not present at the time the will was executed to be incorporated by reference

a)       document must be in existence at time will was executed (can't refer to a future document)

b)       document must be clearly identifiable from will's language so as to preclude any mistake (title and date to document)

c)       Clark v Greenhalge: court allowed extrinsic evidence -- incorporating the notebook into the will

  1. not to be confused

1)       "doctrine" of will integration

2)       "doctrine" of republication by codicil: will having been executed on last valid codicil date.  Pretermitted child  example-- Johnson v Johnson: pg 311.  Will on 1 typewrtiten paper, not dated, not signed or witnessed.  But court found that the codicil republished the will (but have to have a valid will to begin with)

 

 

NEXT CLASS:

 

1.  5 reasons why revocable trust popular

2.       why pour-over will useful

3.       statute of wills doesn't apply to making of a trust

4.       common law rule of revocation by destruction doesn’t apply to a trust.

5.       Trust is revoked by express written terms

6.       Trust language directing the payment of creditors by trustee as discretionary act shouldn't be construed as mandatory i.e. if trustee has discretion to pay creditors then it's only a discretion, creditors can't force trustee to pay

7.       Creditor can reach trust assets while trustor is alive

8.       Meaning of spendthrift trust

9.       Revocable trust is valid even though it is not funded during trustee's life e.g. life insurance policy

10.   Effect of Uniform Testamentary Additions to Trust Act

11.   Benefits of a revocable trust.

 

Mahoney v Grainger Pg 410: plain meaning rule applies b/c no latent/patent ambiguity \ no extrinsic evidence allowed.

Morrison pg 414: allowed extrinsic evidence b/c it was an anomaly case -- ct was trying to set aside will b/c it was against public policy.

Estate of Russell pg 417: residuary created b/c gift to a dog.  Gift to dog (cat etc) goes to an honorarium trust (leave $ in a trust as if the will created a trust).  Gift rules do not apply b/c there was no class, would have to infer a class.

Erickson v Erickson pg 427: couple prepares will couple of days before their wedding, but CT statute that will is revoked in case of marriage.  So when they got married, the will was revoked by operation of law.  They found out a decade later when one of them died.  Extrinsic evidence wasn't allowed, so bene's only remedy was to sue the lawyer. 

 

Section B: Death of Bene Before Death of Testator

Allen v Talley pg 441: will gave gifts to living brothers and sisters = words of survivorship, therefore those who didn't' survive her nor their heirs are entitled to take under Mary's will.

 

Jackson v shcutlz Another case:  heirs are selling property but title co won't close it b/c think it has bad title, so they bring this action to clear title.  Rule of construction -- changed "and" to "or".

 

Class gifts

Dawson v yucus: pg 449.  Bene's predeceased testator thereby creating a latent ambiguity and allowed extrinsic evidence.  Just b/c one individual is named, doesn’t mean it can't be a class, but not the case here.  She knew what a class was, but chose to only name two. Anti-lapse statute doesn't apply here b/c not a descendant, but does in TX.

 

In re Moss:  class gift case, another anomaly in that ct wants to make sure they get it. 

 

Section C: Changes IN property after Execution of Will: specific and General Devises compared

Wassermann v Cohen pg 459:  does doctrine of ademption (gift which doesn't exist anymore) by extinction apply to a specific gift of real estate contained in a revocable inter vivos trust.

 

Thursday, October 12, 2000 -- class 16

Franz: used power of atty to revoke trust but not in Texas, can't do this unless this power is clearly identified in the power of atty.

 

Tuesday, October 17, 2000

 

From class 17:

1.       Exclusion of extrinsic evidence when plain meaning rule apply

2.       Admission of extrisinic evidence show lack of testamentary intent

3.       Applicable of TPC §68 --anti-lapse statute

4.       Applicable of class gift rule

 

Will not produced: individual who makes will, family knows it exists. He dies.  Family goes looking for it, and will is missing.  When will is missing and it was last seen in presence of testator, law presumes it was revoked.  But can produce a copy and ask to probate a will not producible.  If it's a Xerox copy that hasn't been executed, chances of getting probated is almost zero.  Would have to prove up through W that they were there and saw it executed, notarized, etc. basically everything.  If it's an executed copy, then would probated but will still have to get W to testify to prove it up.  Then must overcome presumption that it was revoked -- tricky part. 

            One: will was lost.  Two: was accidentally destroyed. 

 

Probate a holographic will: not self proven, pg 6 of handout, can prove by deposition on written questions  à go get original from clerk, then notify the opposing counsel (or notify the world by posting for 10 days) that will be serving interrogatories.  [if have to choose between 3, 5, or 10 days, choose 10 it's the better answer]  then will send  the interrogates and have them answer them in presence of notary, have them return it with the original and seal and mark it and mail it back.  When it back at law office, will hand it over to judge at the hearing.

 

Proceedings before death - in absence of direct evidence of death.  §72 -- application must provide sufficient circumstantial evidence of facts surrounding disappearance, the probability of death, time & place of death and a minimum of 7 years must have passed.

Notice -- posting and publication (in a newspaper of general circulation in county last resided or last seen)

Then, after letters of administration then ct may require that person who's appt to make a search by notifying law enforcement agencies, public service agencies or getting PI to search for the person.

Distribution: after someone's been appted, then can't make distributions until 3 yrs after.

If it turns out he's alive, he can only file a claim to get back what's left.  BFPs are protected.

 

Appt of temporary administrators:  someone must be appt personal representative of decedent in an emergency.  **only good for 180 days** i.e. 6 m months.  Apptee must satisfy bond w/I 1 day of judge signing order.  usually estates needing this are only really big or really little.  Temp administrator gets to decide disposition of major property so many jockeying for getting property and temp administrator is likely to also be appted permanent administrator.

 

Same "pending will or administration contest" -- appted when there's been a contest.  Contests to administrator's fees must be filed w/I 30 days -- so you (temp administrator) bill every month, not all at once at the end.

 

Pg 19 -- ct appted successor independent executor -- all must agree to apptment.

 

Setting aside the homestead: if independent administration, exec is qualified, the executor can set aside homestead for the surviving spouse.  Executors can also set aside all exempt property for benefit of surviving spouse, executor should also make available to surviving spouse a family allowance.  If dependent administration, then should make application of court to do these things (or ask court to do if the independent and executor won't do it)  Before executor has filed inventory if file to set aside homestead, the application to do so must be verified and showing the condition of estate, don't have to do this verification if it's after inventory.

Rural homestead -- up to 200 acres -- rural if there are no municipal.  Anything over 200 acres is considered a general asset, just as bank account.  Surviving spouse determines where the 200 acres homestead should be, not court etc.  in urban, it's one acre.

 

******you set aside homestead, now what are responsibility of surviving spouse as to the homestead --

1.       pay taxes

2.       pay maintenance

3.       make general repairs

4.       pay mortgage interest

 

remaindermen must:

1.       keep it insured

2.       pay principal on the mortgage

 

purchase money mortgage, M&M lien and tax -- only things home can be foreclosed on

 

partition if surviving spouse dies or abandons property.

 

Can partition if have adult child living at home.

 

Exempt propty -- limitation is no more than 60k for family, and no more than 30k to a single adult who is not a member of the constituent family.

 

If Joe bob died w/o homestead, can get higher exemption.

 

Family allowance: decedent w/surviving spouse w/no separate income/estate, to take care of so she files for family allowance.  Must show she has no separate estate.  Show as proof, her tax returns.  Can be paid in lump sum or monthly.  Two creditors can touch family allowance -- debts of last illness or expenses of internment -- max combined is 15k.

 

**If she doesn’t' get down to court for 9 months, statute says §286 from date of decedent's death, get a year's allowance, so does she only get it for the remaining 3 months?  This question is unsettled -- but judge Austin will give a year's worth.  Other courts, will only give what's left. 

 

Exempt property isn't surviving spouse's forever, will be distributed like any other asset if the estate was solvent.  If was insolvent, then she keeps all the exempt property. 

 

 

Exam: pretermitted child will appear on test, this like

 

Thursday, October 19, 2000

 

Azcunce v Estate of Azcunce pg 537: codicil has effect of republishing will

 

in re Estate of Laura pg 548: a reference to an individual cuts out the indiv's descendents

 

Lake v Lake supp case:  (Dallas) Don was married to Mary lake, had 3 kids, divorced, executed property settlement agreement including child support for after death.  Don dies, child support was current at time of death.  Property settlement agreement was silent on SS credit -- are heirs entitled to SS credit?  TX law applies b/c he died here.  Ct denied SS benefits as a credit to child support b/c settlement agreement was silent, as was the will.  Also b/c when start paying into SS admin you are not creating a plan to pay for pretermitted child.

 

Gorsky supp case -- (San Antonio) opposite, get credit.

 

Tuesday, October 24, 2000

 

CREATION AND VALIDITY OF TRUSTS

 

1.       historical origins: trusts are common law based, not civil law -- e.g. LA doesn't have trusts only things similar things

2.       TX Trust Code: successor to TX Trust Act. Many trust documents still refer to trust act because were written before 1984 when it was .

3.       110.02 actual terms of trust will prevail, if it silent, if code is silent, then revert to CL.

4.       Types of trust: covered under code is called "Express" trust (code only applies to express trusts, does not apply to resulting trusts (form of implied trust) constructive trusts, business trusts or security instruments (not a trust at all).

5.       Resulting trust: created by court to give effect to presumed intentions -- arises from transaction itself not agreement between parties.  I.e. courts may infer from parties' conduct that trust was intended.  To prevent unjust enrichment

6.       Constructive trust: really a remedy, court created - -when it's unfair to allow an owner of property to retain the property (see Hieble v Hieble, when mother conveys to son in anticipation of death/terminal illness he refuses to reconvey and court finds that there was a constructive trust).

7.       Express trust: a legal (fiduciary) trust rship where a person (a.k.a. settlor trustor grantor creator) intentionally transfers property that he owns (a.k.a. res, corpus, principal, trust property) to a person or entitle (trustee) who holds the property for the benefit of another person (bene), with the interests of the bene, the admin provisions of the trust, the duties and powers of the trustee, and the other terms of the trust being set out in the document creating the trust (declaration of trust, trust instrument, trust agreement, will) if any, or otherwise being imposed by applicable law.

8.       Inter vivos/testamentary: created in a will is a testamentary trust (governed by Texas trust code, not probate code), created during person's lifetime is called an inter vivos trust.

9.       Statutory trusts: 867 (§867 of probate code) guardianship trust to manage assets of incapacitated person -- also 142 trust (§142 of property code) manage assets of minor

10.   Revocable: can be amended, revoked by settlor, or irrevocable, cannot be amended or revoked by settlor.  Inter vivos can be revocable or irr, testamentary are always irrevocable.

11.   Revocable in Texas unless expressly made irrevocable.

12.   Active vs. passive: trustee must have duties to perform to be an active trust -- if no duties to perform, then trust fails it's passive and beneficiaries take legal title to the trust fund. See 112.032 (applies statute of uses from real property) trust is considered executed.

13.   Private/charitable/honorary: private is when there are ascertainable beneficiaries, but if no ascertainable individuals but trust was created for charitable purposes then it's called charitable trust, if honorary -- unenforceable -- no ascertainable individuals - left to the cat.

14.   In Texas -- usually see private express trusts (although charitable trusts have increased)

15.   Required elements of express trust

  1. there must be a settlor:

1. settlor must have capacity -- same capacity as capacity to make a will

  1. there must be an act creating the trust entity -- 112.001

1.       self declaration of trust (property owner declares he's

2.       xfr to 3rd person as trustee

3.       testamentary trust

4.       exercise of power of appointment (authority given by donor to donee to dispose of property on donor's behalf)

5.       promise held in trust -- promise to another promise

  1. no consideration is required -- 112.003.  but is required to make a promise to create a trust in the future.
  2. Statute of frauds -- whatever the method of creation for the trust is, the trust must be in writing 112.004 exception of oral trust of personal property which is enforceable if xfror expresses simultaneously the intention to create a trust at the same time the property is xfrd.
  3. Settler's sig doesn't need to be witnessed or acknowledged, but if it's not acknowledged then it can't be filed /recorded in deed records
  4. There must an intent to create a trust.  Must manifest intention (very subjective)

1.       no magic words, don't need to use words trust or trustee.  Use of words of trust or trustee don't necessarily create the intent

2.       must be specifically definite so that court knows

3.       precatory language: must create obligation on part of trustee, so saying I wish or it is my desire only creates intent and doesn't create obligation.  Trustee not required to follow precatory (wishy washy) language.  Mere fact precatory language is used doesn’t preclude court finding enforceable obligation but it is an uphill battle.

  1. Trust purpose - -trust must have a purpose

1.       any purpose that is not illegal

2.       against public policy  i.e. encouraging person to divorce or marry unless it's testamentary and says until she marries.

  1. Separation of legal and equitable title -- doctrine of merger, there must a separation of legal and equitable title to have a trust.  Legal and equitable ownership must be vested in different persons, legal in trustee and equitable in the bene. Right of possession not necessary to vest for equitable owner but is for legal owner.  Why -- trust relationship presupposes enforceable fid duties, there must be someone who can hold trustee responsible for carrying out duties/to terms of the trust.  But can be a bene and a co-trustee (okay b/c there's another person for accountability)
  2. Must be a trustee

1.       must have legal capacity (legal age, competent, capacity to enter into k), can be individual or corporation (must be able to do business in TX) settlor can be trustee so long as not bene

2.       need affirmative acceptance -- if do accept, have no liabilities. (bene are presumed to have accepted) sig doesn’t need to be acknowledged.  If doesn't' accept (or die or resign), and no successor is named, then any interested party can ask court to appoint a successor trustee.  A court will not let a trust fail for want of a trustee.  Must do something affirmative, like sig or do trustee actions.

3.       If multiple trustees:  if 3 or more, majority rules, but if only two, then no tie breaker and try to get a long.

4.       Bond -- corporate trustee not required to give a bond, and non corporate must unless otherwise waived in the trust document (usually is)

5.       Trust is not a separate entity -- it is the trustee who is the legal entity who can sue, enter into k and etc.  (same as estate)

6.       Ancillary trustee: trustee may not be qualified to do biz in the jurisdiction some trust property is located, TX code allows trustee to appoint ancillary trustee (but usually trust document addresses this)

  1. Trust property -- a trust cannot be created unless there is trust property -- must be xferable property.  Any type of property whether real intangible or tangible, including claims contract rights.

1.       Property must be adequately and specifically described. 

2.       Addition -- trustee can receive property additions, but doesn't have to accept property addition.

  1. Delivery of trust property to trustee-- intention w/o delivery is of no legal consequence
  2. Trust beneficiary

1.       can be a class, unborn future bene but there must be someone who can hold trustee responsible

2.       type of interest: can be vested, contingent, future

3.       ascertainability: bene must be ascertainable for there must be someone who can enforce the trust, or it will fail as a private trust.

4.       Acceptance is presumed unless he disclaims the interest.

5.       Rule against perpetuities.

 

Discretionary and Spendthrift trusts:

 

Marksman: exculpatory clause in will that unless trustee was willfully negligent, then no liability but ct said those kind of clauses wouldn't be strictly construed.  6 factors to determine whether there was ???

Need disclosure and consent if have multiple clients. 

 

A trustee's actions are governed by trust instrument -- not trustee's will BUT in a discretionary trust, trustee has discretion to do as he will.  Even so, courts apply a ® test to trustee's actions since trust  is for the bene's benefit.

 

Trustee has to be careful, in exercising discretion, to be mindful of the remainder bene so don't go outside of authority in distributing money or remainderman will come after you for un® distributions to the current bene (that they won't get).

 

Spendthrift trust:  clause w/I trust  -- so bene can't alienate it and it's not subj to creditors of the bene -- protects the bene from himself. 

 

Spendthrift provisions has exceptions -- child support, can't hid behind the provisions to not pay child support.  Another exception:  if someone furnishes necessaries then the furnisher can get paid.  IRS is another exception. 

 

EXAM QUESTIONS: Spendthrift, exculpatory clause, some spendthrift exceptions from the case

 

Tuesday, October 31, 2000

Trust modifications and terminations

 

Most common mod: change of trustees.  Also, e.g., split up one large family trust into 3 separate family trusts b/c the 3 branches of the family hated each other.

 

Special needs trust: trust created for disabled person eligible for govt assistance.  Instead of providing for maintenance, only provides for special things so it doesn't disqualify the person from getting special needs.  Court refused to allow modification and terminated the trust.

 

Could also ask court to terminate trust where uneconomical to continue the trust.

 

Brown: terminated trust b/c the trust's purpose had been accomplished and was no longer needed.  Had they found it was a spendthrift trust, then might have been able to keep it.  TX law: statute in property code, 112,054., judicial modification or termination of trusts: if bene or trustee petitions court to mod or terminate trust, the court may do so if the purposes of the trust have been fulfilled, or become illegal or impossible to fulfill, or b/c of circumstances unknown or unanticipated to settlor, fulfilling the purpose would be self defeating. 

 

Charitable trusts

Shenandoah valley : not charitable in the legal sense, since only provided, basically "Candy money". 

 

Rule against perpetuities & charitable trusts: RAP doesn't apply to charitable trusts.  This candy money trust failed to be a charitable trust and therefore, ran afoul of RAP

 

Doctrine of sigh pray "as near as possible": look at intent -- a general intent to do good for community, or specially for a hospital.  Trust will not fail if there was a general intent.  Allows redefinition of what trust property is used for when original purpose is impossible or impractical.

 

A donor of a charitable trust doesn't have standing to enforce the terms.  Once donor makes the gift, they're out of it, up to atty gen of the state to enforce the terms.  Their opinion is based on leg hist of the uniform act.  And there's a tax reason for it as well. 

 

Uniform trust act: not adopted in Texas, and not many other states either.  Unform trust act does allow standing to donors.