Professional Documents
Culture Documents
2
1.02...................................................Spousal Intestate Succession
2
1.03....................................Descendants and Intestate Succession
2
1.04................................Other Relatives and Intestate Succession
3
1.05...................................................Altering Intestate Succession
4
1.06.....................................................................Defining spouse
6
1.07..............................................................Defining descendant
8
Article II.WILLS...........................................................................11
Section 2.01...................................................Formalities for Attested Wills
11
Section 2.02...............................................Formalities for Unattested Wills
13
Section 2.03.........................................................................................Intent
13
Section 2.04.....................................................................................Capacity
14
Section 2.05........................................................................ Undue Influence
15
Section 2.06..........................................................................................Fraud
15
Section 2.07...................................................................................Remedies
16
Section 2.08.......Unattested Documents: when can a will incorporate by
reference? 16
Section 2.09...............................................................Representation Issues
17
Section 2.10.................................... Revocation by Subsequent Instrument
17
Section 2.11......................................................................Revocation by Act
17
Section 2.12................................Revocation by Changes in Circumstances
18
Section 2.13.......................................................................................Revival
18
Section 2.14................................................Dependent Relative Revocation
19
Section 2.15..................................................Lapse and Anti-lapse Statutes
20
Section 2.16..Will Substitutes: Creation, Revocation, and Subsidiary Law
of Wills
22
Section 2.17...................................................................Protecting Spouses
24
Article III.TRUSTS.......................................................................26
Section 3.01............................................ Private Trusts and their elements
26
Section 3.02........................................................................Parties to Trusts
27
Section 3.03...........................................................................Trustee Duties
28
Section 3.04....................................................Beneficiary Rights on a Trust
28
Section 3.05................................................ Trust Restraints on Alienability
30
Section 3.06..........................................Trust Termination and Modification
30
Section 3.07.......................................................................Charitable Trusts
31
Section 3.08.......................................................................................Cy Pres
32
Section 3.09.....................................Enforcing Charitable Trust Obligations
32
Article IV.Recap..........................................................................33
Article I.
Section I.1
INTESTATE SUCCESSION
Generally
(iv)
(v)
(vi)
(vii)
Section I.2
Section I.3
1) (b) per capita at each generation: property divided into as many equal shares as there
are surviving descendants in the generation nearest the designated ancestor which
contains one or more surviving descendants; and deceased descendants in same
general who left surviving descendants. Each surviving descendant is allocated 1
share. Remaining shares combined and divided in same manner among descendants
2) (c) Per stirpes: property divided into as many equal shares as there are surviving
children of designated ancestor and deceased children who left surviving descendants.
Each surviving child is allocated 1 share. Desceased childrens share divded in the
same manner w subdivision repeating at each succeeding generation until property
fully allocated among descendants.
(c) Guardianship
(i) What about when distributing assets and minors are in the picture?
1) Minors have a conservatorship or guardian appointed to manage their property for
them
2) Problem with guardianship is that it is burdensome and creates lots of costs in name of
protecting minor (trusts are easier and better way to plan)
3) Always advise clients to name a guardian for their minor child
Section I.4
ii)
iii)
iv)
a.
Section I.5
iii)
2)
(i)
(ii)
(iii)
1)
2)
(C) if by law or under the instrument, the descendants of the disclaimant would
share in the disclaimed interest by any method of representation had the disclaimant
died before the time of distribution, the disclaimed interest passes only to the
descendants of the disclaimant who survive the time of distribution
NOTE: in disclaimer only the interest disclaimed passes; NOT the estate if disclaim
looks like per stirpes
(b) Contractual agreements
Can K around statutes provided all relevant parties agree
Policy: drafting trying to figure out what most people would want but if actual heirs
think alt preferable, probate courts will allow
Problems:
Getting agreement from all successors can be a challenge
Limits potpeople will put up obstacles b/c dont want to take less
1) Court holds that a negative will is not clear enough expression of intention to block
intestacy going to wife
2) Stmt saying provisions go to wife instead of statutory rights is not a negative will; maj
says that statutory rights do not include intestacy rights and therefore she can take
from intestacy.
Section I.6
Defining spouse
(a) Consider
(i) Donative intent
(ii) Financial interdependency
(iii) Emotional support
(iv) Vulnerability of surviving spouse
(v) Aministrability and efficiency in the intestate system ; universal application
(b) IF a spouse, take. If not, no. Status determination under UPC
(c) UPC Provisions
(i) 2-802effect of divorce, annulment, and decree of separation
1) (a) An indiv who is divorced from the decedent or whose marriage to the decedent has
been annulled is not a surviving spouse unless, by virtue of a subsequent marriage, he
[or she] is married to the decedent at the time of death. A decree of separation that
does not terminate the status of H & W is not a divorce
a) An exclusion definition
2) (b) A surviving spouse doesnt include:
a) (1) an individual who obtains or consents to a final decree or judgment of divorce
from the decedent or an annulment of their marriage, which decree or judgment isnt
recognized as valid in this state, unless subsequently they participate in a marriage
ceremony purporting to marry each other to the other or live together as H & W;
i) Good faith idea - if people believe in good faith that they are divorced, they'll be
treated as divorced in this situation
ii) Idea/intent of the statute is that if people have a decree that they believe is good &
then act based on that decree, will allow people to rely on that (for both 1 & 2)
iii) Issue of remarriage arises in elective share statutes - b/c UPC elective shares are
determined in part by how long the parties were married, & if there are two
marriages, those periods will be added together
iv) Annulment acts in the same way as a divorce
v) Need a final order/decree (Holmes case, below - had none)
b) (2) an individual who, following an invalid decree or judgment of divorce or
annulment obtained by the decedent, participates in a marriage ceremony w/ a 3rd
indiv; or
c) (3) an indiv who was a party to a valid proceeding concluded by an order purporting
to terminate all marital rights
(ii)
(d) Cases
(i) Holmes v. Fentress, p.61
1) Neff left everything to Geissinger, will invalidated. Q of whether G takes under
intestacy b/c held themselves out as divorced but divorce was ineffective. G does take
under intestacy;
2) Could take under UPC, too, b/c no decree. Under 2-802(b) the almost-divorce
situations require having some final order or statement from the court; here, H&W
made a petition to the court but there was no decree
3)
(ii) In re Quarg, p.66 [contract approach to partnership]
1) Court upholds contract between deceased and second partner. K language: I be your
life partner and in return I get access to your assets
2) Considerations: interest in marital property by virtue of mutual efforts during
relationship contributing to creation, acquisition, and preservation of such property
3) Broad ruling for people in this situation
4) Criticisms for using contract approach a) Any requirement of an express contract runs into the problem of people having to opt
into it - will tilt who is protected in favor of more wealthy & more sophisticated
parties (in terms of law & financial transactions) - biasing effect
b) Disrespectful to treat these relationships like business arrangements/financial
transactions - family relationships have status protection b/c wont inquire into
relationships (will just get rights based on that status)
5)
(e) Classifications of partnerships
(i) Putative spouse
1) Any person who has co-habited with another to whom he is not legally married in the
good faith belief that he was married to that person; there was a ceremonial marriage
but something defective
(ii) Common law spouses
1) No ceremonial marriage: just decided to be married. Act married. Generally, must hold
yourself out, but cannot be common law married if you say you are not married and
are just living together. [NY accepts]
(iii) Same sex partners
1) Unsettled area. Some have to rely on the K arrangement.
2) Four main approaches:
a) Spousal status is the only kind of status of this type - only available to opposite-sex
partners; have to rely on wills and K arrangements.
b) Spouse is the only category of this type - but available to everyone, opposite &
same-sex partners
c)
i)
ii)
iii)
d)
i)
Civil unions - a new status but w/ all the same rights & responsibilities of the spouse
status, just called something different (trying for a middle ground)
Once someone achieves the status of being a member of a civil union, they will get
all the same rights/responsibilities of spouses
Members of a civil union - under UPC - would be treated exactly as spouses
get intestacy rightsvarious limitations
Reciprocal beneficiaries - adopting a new status (in other states called "domestic
partners"). Formal (n/ functional) - ie, must be formalized w/ license, state's
authority, etc. - no question into the relationship
W/ that status, couple is entitled to a set of rights/responsibilities that are NOT
exactly the same as the ones for spouses
Section I.7
Defining descendant
(a) When interpreting a doc, look at intent first and then look at intestacy
definitions
(b) UPC provisions
(i) 2-114 Parent barred from inheriting in certain circumstances
1) (a) A parent is barred from inheriting from or through a child of the parent if:
a) (1) the parents parental rights were terminated and the parent-child relationship was
not judicially reestablished; or
b) (2) the child died before reaching 18 & there is clear and convincing evidence that
immed before the childs death the parental rights of the parent could have been
terminated under state law on the basis of nonsupport, abandonment, abuse, neglect,
or other actions or inactions of the parent towards the child
i) States differ on the grounds that will bar a parent from inhering - but always some
kind of parental misconduct. High standard of proof (b/c controversial)
2)
(ii) 2-117 No distinction based on marital status
(iii) 2-118 adoptee and adoptees adoptive parent or parents
1) adopted children take from their adoptive parents; creates a legal parent-child
relationship
(iv) 2-119 Relationship between Adoptee and Genetic Parents
(v) 2-120 Child conceived by assisted reproduction other than child born to gestational
carrier
1) no potential relationship between child and donor only. Egg or sperm donor is not the
relative.
2) Presumptions: husband of birth mother = father; birth cert, whoever is on that is the
parent.
3) Posthumous child, conceived using decedents frozen sperm: have to show, by clear
and convincing evidence, that decedent intended the child to be his.
(vi) 2-121 Child born to gestational carrier:
10
1) if surrogate who is also genetic mother of child, that person is a potential parent (of
last resort)
(vii) 2-705 Class gifts construed to accord with intestate succession
1) should people other than those whose assets are at stake be able to determine who are
takers?
2) (f) adoptee not considered child of adoptive parent unless
i) adoption took place before adoptee reached 18 years of age; adoptive parent was
adoptees step or foster parent; or adoptive parent functioned as parent before
adoptee reached 18
(c) Classifications
(i) Clear genetic children born of wedlock-(2-117)
(ii) Adopted children (2-118; 2-119)
1) Once adopted, treated as biological child.
2) Once adopted, can no longer inherit from or through biological parents (In re
Donnelly)
a) Some wiggle room when biological parent remarries after other bio parents death
and new spouse adopts. (2-119)
3) Equitable adoptionlooks at where children are foster or step children and parents
wanted to adopt but defective somehow (not in upc)
4) stranger to the adoption doctrine: when talking about gift to testators own children,
adoptive children will be included. But when talking about gift from testator to
testators brother, what about the brothers kids?
a) Interpretive rule: if no other info about intent of donor, going to assume if a sranger
to adoption then didnt meant to include adoptive children in class gift.
b) Generally rejected today. Overtaken by 705(f)
(iii) Nonmarital children
1) All children take from and through parents under intestacy
2) More about evidence than intestacyeasy to prove matrilineal but hard to prove
patrilineal if a nonmarital child
3) Uniform Parentage Act:
i) Sets up a series of presumptions that can be used to conclude a person is the father,
based on marriage to the mother at the time of the child's birth, married to the
mother during the period of gestation/child's birth, H agrees to be named on the
birth cert., etc.
ii) Can be rebutted but after some time period, the presumptions are irrebuttable
iii) Relies heavily on genetic testing & refusal to submit to a genetic test can be used to
determine paternity against the person that refuses.
b)
(iv) Assisted reproduction children (2-120; 2-121)
11
12
Article II.
WILLS
13
(v)
1)
2)
(vi)
1)
(vii)
1)
(viii)
1)
(ix)
1)
(i)
(ii)
(iii)
1)
2)
3)
4)
(i)
(ii)
(iii)
Signature of testator
Dated and signed at the bottom as witnesses watch
In NY, must be at the end of the will b/c anything after signature will be ignored
Attestation
Each witness should read aloud the attestation clause and sign and date
Integration
Staple the pages together
Self-proving affidavit
Affidavit witnesses signed when signed will that declare that saw all the formalities
complied with; creates presumption that formalities complied with
Notarization
UPC says that notarization is sufficient to fulfill the attestation requirement; but notary
alone does not meet attestation unless states adopted upc 2008 amendments.
(c) Reasons for formalities
Evidentiary; cautionary; protective; channeling
Lawyer supervising who fucks up can be liable to intended divisees
Policy discussion:
Achieving donative intent - but in some of these cases, donative intent doesn't seem to
be actuated
Protecting vulnerable parties
Fairness - treating people fairly in a way that makes sense based on a lay person's view
& not undermining the legitimacy of the legal structure. Formalities may create
problems for unsophisticated parties - make it seem that the law is unfair
Need something administrable - a system that provides good evidence of someone's
intention; the formalities serve a good purpose here
(d) Regimes
Strict Compliance: mckellar; follows everything from 502
Substantial Compliance: convincing attempt to comply such that the will is trustworthy
(small defect)
Harmless Error: upc 503. Can dispense with formalities if there is a doc and clear and
convincing evidence that the decedent intended doc to be will; irrelevant whether treid
to meet formalities
(e) Cases
14
15
3) Takeaways:
a) If 2 people do not properly witness doc, 2-503 allows doc to still be treated as if it
had been when clear andn convincing evidence that decedent intended as will.
b) UPC auths notarized wills in writing, signed by testator , and notarized= valid
execution b/c notarys principal duty is to verify identity of person signing doc
c) Policy consideration: public thinks of notaries as officially legal so ease of access
16
(i)
(i)
1)
2)
3)
4)
5)
6)
17
18
(i)
1)
(ii)
(i)
1)
2)
3)
(ii)
1)
2)
3)
4)
5)
6)
7)
8)
(i)
1)
2)
19
3) But for causationbut for the undue influence would she still have taken the actions
she did?
(e) Vulnerability of Estate Plans
(i) Unmarried cohabiters
(ii) Surviving spouse, but not spouse producing descendants
(iii) In terrorem/No contest clause (if you bring a contest, you forfeit devise) (2-517)
1) Automatically makes it look suspicious. Works best with a complex plan where parties
may fight each other. Many courts find unenforceable but in NY upheld.
(f) Attorneys Professional Responsibilities
(i) Cannot name self as bene in will lawyer is drafting; unless a close, familiar relationship
exists
20
(i) Doc must be in existence at time of will AND the will must reference the doc. Many
courts will refuse to incorporate even if excellent evidence that the doc was in existence
b/c not mentioned in a will.
(ii) NY does not allow at all. BUT can allow exhibits as part of will?
(b) Acts of Independent Significance: all jurisdictions give effect to devises
that identify the property or the devisee by reference to acts and facts
that have independent significance (2-513)
(i) Restatement: Meaning of a dispositive or other provision in a will may be supplied or
affected by an external circumstance referred to in the will, unless the external
circumstance has no significance apart from its effect upon the will
1) For ex. - devise to my partners at the time of my death - doesnt undermine
formalities b/c those are determined independently of the will
(ii) If people are not specifically named in the will, there will be independent events that
determine who can take under the devise
(iii) Dont want the doctrine to provide a work-around will formalities - doctrine is trying to
prevent writings or acts by testators that will only affect terms in the will, and nothing
else in the world
(iv) Accepted by every jurisdiction
(v) UPC - a statutory exception to the common law doctrine: see 2-513
(c)
(d) UPC provisions
(i) 2-502: holographic will argument would be that the letter was intended as a will in
itself. More difficult to prove than harmless error
1) will is holographic if material provisions are in testators handwriting and signed by
testator.
(ii) 2-503: harmless error argument would be that letter intended b clear and convincing
evidence to be an amendment/codicil
(iii) 2-510Incorporation by reference
(iv) 2-512: independent significance
1) a will can dispose of property by reference to acts and events BUT acts must have
independent significance; if no significance other than testamentary transfer, invalid.
(v) 2-513: Separate Writing
1) A will may refer to written statement or list to dispose of items of tangible personal
property not otherwise specifically disposed of by the will. The writing must be signed
by testator and describe items to be distributed with particularity
2) does not need to be witness or handwritten; in practice only for less valuable things
no money
a) Older version reqd handwritten but no signature; new version reqs signature only
3) The writing may be referred to as one to be in existence at the time of the testators
death; it may be prepared before or after the execution of the will; it may be altered by
the testator after its preparation; and it may be a writing that has no significance apart
from its effect on the dispositions made by the will.
4)
(e) Cases
21
(i)
1)
2)
3)
22
23
(i)
(ii)
1)
(i)
1)
2)
24
a) presumption: is against revival. Will 1 remains revoked to the extent that the
revocation of the 2nd willshows revocation included revival. Most likely, instructions
in 3rd will give info about what to reoke and what to revive. Wont need to revive 1
b/c have terms in will3
(d) Cases
(i) Estate of Boysen, p.228
1) Will 1 leaves farm to sun but on condition he pays isster; will 2 leaves farm to son on
condition he pays worth of estate. Will 2 expressly revokes all prior wills. When
testator finds will 1, tears up will 2is will 1 revived?
a) Presumption is that it is not revived but there may be enough evidence to do so.
b) Court orders lower court on remand to consider (1) did testator know will 1 in
existence? (2) did testator know nature or extent of property/disposition made by will
1? (3) did testator disclose intent to make disposition which earlier will directs? If all
answers yes then revived.
(ii) Boysen aftermath
1) UPC 2-509 comments reject the Boysen questionsintend rebuttal to be more general
inquiry
25
2) Testator must intent that the destruction of the old will is dependent on validity of the
new willmust be proved by substantial evidence of probative value
3) in this case, no evidence that revocation of will 2 depended on the validity of will1
therefore not DRR. Intestacy takes over.
a) Note: under UPC could have probated will 2.
(iii) Schneider v. Harrington, p.239 [partial revocation]
1) f: testator wanted to make changes so marked up will crossing out a, a claims crossedout provisions do not take effect
2) court wants to accept cross-outs as partial revocation but filling in new info doesnt
meet formalities, so will standards as originally drawn
3) cancellations only effective if substitutions valid, which they are not
4) also no residuary clause this would result in partial intestacy
a) fiction of conditional intent closest to reality in this type of case
(i)
(ii)
(iii)
(i)
(ii)
(iii)
(iv)
1)
(v)
1)
2)
(a) Lawyers may and possibly msut reach out to their clients to inform them
of laws or circumstances changing the distribution of their estates. This
is a pretty significant loophole to genl PR rule against solicitation.
(b) Types of devises
Specific: a testamentary disposition of a specifically identified asset (e.g. family farm
or diamond ring
General: a testamentary disposition, usually of a specified amount of money or quantity
of property, that is payable from general assets o the estate
Residuary: a testamentary disposition of property of testators net probate estate not
disposed y a specific, general, or demonstrative devise (aka leftovers)
(c) Types of changes
Ademption: specific devise adeemed (aka rendered ineffective) if testator no longer
owns the specifically devised property at deathyou cannot give away something you
dont own
Abatement: when testator dies and estate does not include enough assets to pay for all
the devisesall devises except specific devises are reduced. All other devises reduced.
Accessions/Accretions: when estate of class of takers grows after testator writes will;
can have enlargement of specific devise (e.g. stock splits, specific devisees gets benefits
of the extra shares)
Set-off/satisfaction: similar to concept of advancement in intestacy. Provision in will
providing devise to indiv was given during the life of the testator.
There must be a written expression of intent to satisfy devise by interv vivos gift
Lapse:
When beneficiary dies between execution and probatedead people cant own
property so have to figure out what to do with their devise
Makes for a lot of complexity you can end up having partially intestate estates, and it
can also defeat testators intention. Think about who the takers would be children,
grandchildren, e.g. We would think, and the drafters of the UPC though, that the
testator would prefer to have their predeceased takers descendants take than for it to
go through intestacy.
26
3) Antilapse statutes started to come into force to correct the harshness of the common
law rule of lapse.
4) Typically, courts will look for general intent; residuary; then to intestacy
(d) Advent of anti-lapse statutes
(i) Remedial in nature. Tends to preserve equality of treatment among different lines of
succession.
(ii) Beneficiary Must survive testator by 120 hours
(iii) Intestacy is last resorttry to save from that.
(iv) Will allow predeceaseds descendants to take by representation
(v) If there is language providing for a back-up, that alternative devise trumps the antilapse
provision.
(e) UPC provisions
(i) 2-601-scope. In absence of a finding of a contrary intention, rules of construction in
this part control the construction of a will.
1) Policy: testator probable would have made had he thought about it/produces result
closest to testators probable intention; applies to relatives of testator
(ii) 2-603-Antilapse Statute
1) These dont prevent lapse its still not possible to give property to dead people.
2) (b): What kind of takers will the antilapse apply to?
a) Grandparent, a descendant of a grandparent, or a stepchild of either the testator or the
donor of a power of appointment.
b) Holder of a power of appointment is someone who gets not actual property, but the
right to devise property (sometimes they may devise to themselves, sometimes they
must give it to others).
c) NB: The antilapse statute does not apply to create a substitute gift for a spouse.
Why?
i) Part of the rationale behind the antilapse statute is that people arent thinking
through the possibility of predeceasing descendants. So spouses arent included
because they likely either (a) draft their wills together, or (b) be contemplating that
one of them will predecease the other. If it were to apply to spouses, it could defeat
ii) If we put in place a substitute gift to the descendants of a surviving spouse, then
property could go to unshared descendants of a spouse this could possibly defeat
donative intent.
3) UPC Anti-lapse [2-603(b)(1)]
a) T $40K to A, residue to B. A and B are Ts children.
i) A predeceases leaving child (A, Jr.), $40K goes to A, Jr.
ii) A and B predeceases, only B with surviving descendants. Residue goes to Bs
descendants.
iii) Idea: because A and B are testators children, the statute assumes that rather than
having all of the assets go through intestacy that the testator would rather have a
substitute gift go to his or her own descendants.
27
5)
(i)
1)
2)
3)
(f) Cases
Ruotolo v. Tietjen, p.280
Antilapse statute enacted to prevent operation of lapse and unintended disinheritance.
Statute is remedial and receive liberal construction. Any doubts recolved in favor of its
operation.
Therefore, works of survivorship such as if she survives me alone do not constitute a
provision in the will for the contingency of the death of a bene and are insufficient to
negate operation of antilapse statute.
As a result, devise to dead relative does not lapse, but instead descends to her issue.
Section II.17 Will Substitutes: Creation, Revocation, and Subsidiary Law of Wills
(i)
1)
2)
(ii)
(iii)
(iv)
(v)
28
29
30
2) RULE: even though trust is revocable, creditors cannot reach underlying property in a
trust UNLESS trust was set up to defeat those creditors. (aka cannot create a trust once
you know the creditor is looming)
31
32
33
Article III.
TRUSTS
34
i)
35
36
37
38
39
For:
tax base: will encourage people to go out of state
donative intent: undermines function of trust
creditors better to bear risk since they can do their homework
people will just turn to other methods less reachable by creditors
Against:
efficiency: creditors will be able to get $ anyway, no reason to let this legal obstacle
get in the way
2) drives up cost of credit: research / enforcement
3) encourages spinelessness: allows people to be their worst selves, encourages
aristocracy
4) differential treatment between inherited and earned wealth
(iii)
40
4) Duress clause:
a) Trustee directed to ignore any directions received from settlor or protector under
duress
b) Linked to auto-termination. Triggered by a settlor or protector who is under duress
(aka court order directing compliance)
5) Flight provision
a) Trustee authd to change site of trust if claim against trust threatens to be successful
b) Virtually guarantees offshore APT will never be subject to creditors claims
(b) Cases
(i) FTC v. Affordable Mediaorder of contempt against settlor as protector. Settlor could
have tried to resigned but would bely his complicity in trying to hide his money.
(ii) In re Lawrencelawrence sent to jail for not sharing assets after 6 years and no sign he
would change mind, civil contempt no longer valid compliance measure so judge
required his release
(c) UTC Provisions
(i) 501Rights of Beneficiarys Creditor or Assignee
1) to the extent a beneficiarys interest is not subject to a ST provision, court may auth a
creditor or assignee of the bene to reach the benes interest by attachment of present or
future distribution to or for the bene of the be or other means court may limit the
award to such relief as is appropriate under the circ
(ii) 502Spendthrift Provision
1) (a) ST provision valid only if it restrains both voluntary and involuntary transfer of a
bene interest
2) (b) A term of trust providing that the interest of a bene is held subject to a ST Trust
or words of similar import is sufficient to restrain both voluntary AND involuntary
transfer of benes interest.
3) (c) Bene may not transfer an interest in a trust in violation of a valid spendthrift
provision and except as otherwise provided, a creditor or assignee of the bene may not
reach the interest or a distribution by trustee before its receipt by the bene
(iii) 503Exceptions to Spendthrift Provision
1) (a) child includes any person for whom an order or judgment for child support has
been entered in this or another state
2) (b) a ST provision is unenforceable against
a) (1) a bene child, spouse, or former spouse who has a judgment or court order against
the bene for support or maintenance
b) (2) a judgment creditor who has provided services for the protection of a benes
interet in the trust
c) (3) a claim of this state or US to the extent a statute of this state or federal law so
provides
41
(b) Reasons
(i) Unforeseen circumstances
(c) Cases
(i) Claflin v. Claflin, p.524 [termination w consent; no violation of material purpose]
1) No termination of trust when all benes did not consent
2) Plaintiff tried to say that the trsut was in violation of the material purpose of the settlor
by postponing enjoyment of trustcourt did not buy it.
(ii) Petition of Wolcott, p.533 [modification]
1) Ok to allow invasion of principal to a limited degree because primary purpose of trust
was to protect widow and living benes all agreed to it however cannot have a straight
up mod w consent b/c there are unborn issue who have to be considered.
2) If trust provided for trustees discretionary power to deviate in certain circumstances,
would avoid this problem.
(d) UTC Provisions
(i) UTC 411Modification or Termination of Noncharitable Irrevocable Trust by
Consent
1) (a) may be modified or terminated upon consent of settlor + all benes
2) (b) may terminate upon consent of all benes if court concludes continuance is not
necessary to achieve any material purpose of the trust; may be modified upon consent
of all benes if court concludes mod is not inconsistent w material purpose of the trust
3) retains consent/material purpose requirement
4) (c) ST provision alone does not presume material purpose
5) (d) upon termination, trustee shall distribute trust property as agreed by benes
6) (e) if not all the benes consent to mod or terminationcan be approved by court IF
a) (1) all benes had consented the trust could have been modified or terminated AND
(2) interests of bene who does not consent will be adequately protected
(ii) UTC 412Modification or Termination Because of Unanticipated Circumstances or
Inabilty to Administer Trust Effectively
1) (a) The court may modify the administrative or dispositive terms of a trust or terminate
the trust if, because of circumstances not anticipated by the settlor, modification or
termination will further the purposes of the trust. To the extent practicable, the
modification must be made in accordance with the settlor's probable intention.
2) [only for admin deviation] (b) The court may modify the administrative terms of a
trust if continuation of the trust on its existing terms would be impracticable or
wasteful or impair the trust's administration.
3) (c) Upon termination of a trust under this section, the trustee shall distribute the trust
property in a manner consistent with the purposes of the trust.
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(i) res
(ii) intent
(iii) trustee: absent trustee can be reappointed
(b) Unique to charitable trusts
(i) Beneficiaries: do not have to be names; instead should be an indefinite class
(ii) Charitable purpose
1) Advancement of education
2) Relief of poverty
3) Advancement of education
4) Promotion of health
5) Promotion of government/municipal
6) Other purposes beneficial to community
(c) Cases
(i) Bob Jones Univ:
1) Engaged in education AND also racially discriminatory admission practices.
Exemption status revoked on basis of viol of 14thA. Not charitable. Contravening
public policy
2) Education is not enough. Additionally cannot contravene public policy.
(ii) Shenandoah Valley National Bank v. Taylor, p.554
1) Court refused to modify trust because did not meet charitable purpose and was in
violation of RAP
a) question about charitable b/c if not actually charity then against the rule against
perpetuities
b) intestacy next of kin challenges as violating RAP and then would get money
c) advancement of education: while the language states the money should be spent in
furtherance of his obtainment of education after out of the hands of the trustee no
enforcement mechanism
d) relief for the poor: no proof of impoverishment and not a poor town. No financial
needs testing set up in trust
e) other purposes for benefit of community: benevolence trust is not enough for a
charitable
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(i)
(ii)
(i)
(ii)
1)
2)
(iii)
1)
2)
(a) Doctrine
After determining that specific charitable intent was no longer possible to be fulfilled,
then court has reformation power in line with charitable ends
Distributive deviation
(b) Cases
Polio hypo: charitable trusts created to develop cur for polio, once the vaccine was
invested the trusts became obsolete so money could be used for other medical research
Estate of Buck, p.561
Court did not grant cy pres when SF Foundation (trustee) moved to extend scope of
grant; cited the donative intent
New trustee named instead
Barnes Foundation
Court followed deviation doctrine to allow for a new building to save the paintings
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2) Financial accountability is the focus for AGs to protect donors and orgs
a) Why?
i) Financial is the most tangible area to enforcea lot easier to track
ii) Can use the same tools they are used to using
iii) Go after corruption and criminal acts
iv) Difficult for AG to go after charities with rich supporters when an elected official
so the financial shit is black and white
3) Prevention v. reactiondifficult
4) Mission accountability
a) Bedrock. Need money to make it happen and need the mission to support your org to
give you their money
b) Area could be improved, but difficult for AG to enforce and least able to help in
navigating the tension btn original mission and keeping relevant
(ii) Takeaway
1) Charitable activity is a large part of estate plans of many
2) Need to understand to help plan an estate
(d) UTC
(i) UTC 405(c)recognizing enforcement gap
1) Settlor has standing to enforce at least purposes of charitable trust, probably also to
address fiduciary breaches BUT estate of settlor does not have this enforcement power
Article IV.
Recap
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