Term
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Definition
| (1) T must have capcity; (2) will must be in writing; (3) will must be signed by T; (4) will must be signed by 2 attesting witnesses; (5) each witness must sign in the presence of T |
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Term
| What if the attesting witness is also a beneficiary? |
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Definition
| Will is not void, but bequests to witness are void, UNLESS (1) will can be proved without testimony of interested witness; (2) the interested witness's testimony can be corroborated by a disinterested witness; OR (3) the interested witness would be an heir under intestacy. |
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Term
| What are the formality requirements for a holographic will? |
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Definition
| (1) Wholly in T's writing; (2) signed by T; and (3) intended to be a will by T |
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Term
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Definition
| Applies when (1) a beneficiary dies before the T; (2) the beneficiary is a decedent of the T's parents; (3) survived by a decendent that survived the T by at least 120 hours. |
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Term
| Disclaim by heir or beneficiary |
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Definition
| (1) must be in writing, signed and acknoweldged by a notary public; (2) must state disclaimant is not in arrears on child support; (3) must be filed within 9 months of the decedent's death; (4) filed with the probate court and copy to personal representatives |
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Term
| Lifetime Gift to Heir or Will Beneficiary |
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Definition
| Not treated as an advancement UNLESS (1) declared as such in contemporaneous writing by donor OR (2) acknowledged as such in writing by the donee |
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Term
| Pre-termitted Spouse Statute? |
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Definition
| No--but spouse has the following claims: (1) probate homestead or $45,000 cash allowance in lieu of homestead; (2) family allowance; (3) exempt personal property (up to $60,000 in tangible personal perperty); (4) $30,000 allowance in lieu of # 3. |
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Term
| Pretermitted Child Statute? |
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Definition
| Yes-(1) If no other children exist when the will is executed or if there are other children when will is executed but they are not provided for, then the pretermitted child takes intestate share of all property devised or bequested to the other parent of the child. (2) If there are other children when the will is executed and they are provided for, then the pretermitted child's share is limited to the gift to such other children. NEW STATUTE: Pretermitted child's share limited to 1/2 of the parents |
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Term
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Definition
| (1) by a subsequent testamentary instrument that expressly revokes earleir will or (2) by physical act |
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Term
| Dependent Relative Revocation |
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Definition
| Where T revokes a will based on a mistake of law or fact as to the validity of another disposition. This equity-type doctrine permits the court to disregard the revocation that was based on the mistake of law or fact if it finds that the act of revocation was premised on, was conditioned on--was dependent on-- the validity of another disposition. |
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Term
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Definition
| Specific Gifts- Beneficiary takes $0. Does not apply to demonstrative legacies |
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Term
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Definition
| For wills executed before September 1, 2005, absent contrary will provisions liens on specifically devised property are exonerated from residuary estate and entitled to be taken free and clear. For wills executed after September 1, 2005, the exoneration of liens doctrine does not apply. |
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Term
| Incorporation by Reference |
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Definition
| An extrinsic document, not present when the will was executed and thus not part of the duly executed will, can be incorporated by reference into the will if: (1) writing must be in existence when will executed; (2) will must show an intent to incorporate the writing; and (3) document must be clearly identified by language in the will, such that there can be no mistake as to the identity of the document referred to. |
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Term
| Acts of Independent Significance |
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Definition
| Lifetime Act + Lifetime Purpose/motive |
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Term
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Definition
| (1) Property passing by right of survivorship; (2) property passing by contract; (3) property held in trust; (4) property over which the decedent held a power of appointment |
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Term
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Definition
| General Testamentary POA/Takers in default of Appointment/Special Testamentary POA |
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Term
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Definition
| Did the T have sufficient capacity to (1) understand the nature of what he was doing; (2) know the nature and approximate value of his property; (3) know the natural objects of his bounty; (4) understadn the disposition he was making. |
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Term
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Definition
| (1) existence and exertion of influence; (2) effect was to overpower the mind and will of the T; (3) product was will that would not have been but for the influence |
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Term
| What procedures may an independent executor use to close the administration? |
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Definition
| (1) File closing report with verified affidavits (property initially received; debts and expenses paid; and names and addresses of distributees); (2) File notice of closing with verified affidavits (all known debts and expenses paid and addresses of distributees); (3) file for declaratory judgment (seeking judicial discharge) |
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Term
| Can an estate be administered without court supervision or involvement? |
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Definition
| Yes-through an independent administration. An independent administration is authorized when (1) provided for in the will OR (2) if all distributees agree. |
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Term
| What actions must the personal representative take within 120 days after appointment? |
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Definition
| (1) he must post fiduciary bond within 20 days; (2) must publish notice of administration in newspaper within 1 month; (3) must give notice to named will beneficiaries within 60 days after appointment; (4) must file inventory within 90 days; (5) must file a certificate that notice to the beneficiaries was given within 90 days. |
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Term
| What are two methods that an estate can be administered with least burden of cost without appointment of a personal representative? |
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Definition
| (1) Where there is a will, probate the will as a muniment of title; (2) where the T dies intestate, a statutory heirship proceeding; (3) through small estate administration by affidavit if the T died intestate and the value of the probate estate is less then $50,000 (excluding homestead and exempt personal property) |
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Term
| Priority as to who can be appointed personal representative? (dependent administration) |
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Definition
| (1) exector named in the will; (2) surviving spouse; (3) principle beneficiary; (4) another other beneficiary in the will; (5) next of kin |
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Term
| Compensation for executors? |
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Definition
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Term
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Definition
| At a probate proceeding, a personal representative (called an executor if named in the decedent's will or an administrator if named by the court) is appointed to carry out the estate administration. |
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Term
| Is there a SOL for probating a will? |
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Definition
| A will cannot be admitted to probate more than 4 years after the T's death, UNLESS it is shown that the party applying for probate was not in default in failing to present the will within the 4 year period. |
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Term
| What procedures apply to presentment of creditor's claims against an estate in (1) a dependent administration and (2) an independent administration? |
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Definition
| Both-Personal Rep must file notice in newspaper in county of pubication within 4 months after being appointed requiring all persons with claims agains the estate to present them within the time prescribed by law. In a dependent administration, a general creditor must file an authenticated claim supported by an affidavit with the probate court or administrator. Administrator must then write a memo allowing or rejecting the claim within 30 days. In a dependent administration, a creditor cannot bring a COA, unless the claim is first presented to the administrator and rejected by the court. |
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Term
| Permissive Personal Notice to Unsecured Creditors |
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Definition
| Personal representative may give personal notice by registered or certified mail to GCs stating that the GCs must present their claims within 120 days or claims are barred. |
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Term
| Personal Notice to Secured Creditors |
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Definition
| Within 2 months after being appointed, a personal rep must give personal notice by registered or certified mail to SCs with valid liens. |
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Term
| When can the creditor present its claim for payment out of the general assets of the estate if the note is not yet due? |
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Definition
| Within (1) 6 months after the date of appointment of the personal rep OR (2) within 4 months after receipt of personal notice SC must file its claim as a matured, secured creditor. Otherwise, it is classified as a preferred debt and lien creditor (i.e. he can foreclose but no deficiency judgment) |
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Term
| Claims against an estate are paid in what order? |
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Definition
| (1) Funeral expenses and expenses of law ilness, up to $15,000 (then federal tax liens; then family allowance); (2) expenses of administration; (3) secured claims, to extent covered by lien; (4) child support arrearages reduced to judgment; (5) state tax; (6) claims for repayment of Medicaid assistance paid by state; (7) cost of confinement in TDC; (8) all other claims |
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Term
| What is the appropriate venue for appointment of a guardian? |
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Definition
| (1) Guardian for minor-county where parent resides; (2) guardian for incapacitated result-county where proposed ward resides or county where principle estate is located; (3) guardian named in parents will-county where will was probated or county where appointee resides |
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Term
| Who is eligible to be appointed guardian of the person and estate of a minor? |
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Definition
| Surviving parent presumption-last surviving parent can name guardian of the child. It is presumed that person designated by parent is in the child's best interest, but presumption is not conclusive. If child over 12, they can choose their own guardian. |
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Term
| Who is eligible to be appointed guardian of the person and estate of an incapacitated adult? |
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Definition
| (1) Person named by last surviving parent in will or other written declaration. (2) Person named in writing, witnessed by Designation of Guardian before need arises (Designation is prima facie evidence that named person is in the ward's best interest). |
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Term
| General Test: Who should be appointed guardian of the ward? |
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Definition
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Term
| Who is disqualified from being appointed guardian? |
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Definition
| (1) incapacitated persons; (2) conflict of interest; (3) inexperience, lack of education or other reasons; (4) a persons whose conduct is notoriously bad; (5) convicted sex offender. |
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Term
| What actions must the guardian take within 60 days of appointment? |
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Definition
| (1) must qualify by taking oath and posting fiduciary bond within 20 days; (2) must publish notice of administration in newspaper in county within a month; (3) must file an inventory of the estate within 30 days; (4) must file an application for monthly allowance to be expended on the ward's behalf without prior court approval within 30 days. |
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Term
| Reimbursement for guardian of person? |
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Definition
| Clear and convincting evidence that the expenditures were reasonable and proper and not possible or convenient to get court's prior approval |
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Term
| Guardian of Estate/Financial Prudence Duty |
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Definition
| The guardian of an estate has a duty to invest all funds and assets that are not immediatly needed for the ward's education, support or maintenance. The guardian must manage and invest funds as a prudent person would. |
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Term
| Does a guardian of estate need court approval before investing assets? |
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Definition
| Generally yes-unless the asset is on the statutorily approved list-US government bonds; State of Texas bonds, and interest bearing accounts insured by the FDIC. A guardian who wishes to invest in assets not on the legal list must file an investment plan with the court within 180 days after his or her appointment. |
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Term
| Compensation for a guardian |
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Definition
| Reasonable compensation. 5% of the ward's gross income + 5% of all money paid out of the estate is considered reasonable |
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Term
| What things can a guardian do without court order or approval? |
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Definition
| (1) retain property received at the inception of the guardianship or (2) insure property, pay taxes, court bond premiums, vote stock, ect. General, presumption though is that the guardian needs court approval |
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Term
| Trust Formation Requirements |
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Definition
| Settlor delivers title to trust property to a trustee for the benefit of beneficiaries with intent to create a trust |
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Term
| What does permforming an accounting include? |
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Definition
| report property initially received; receipts and disbursements; property now on hand + liabilities |
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Term
| Are perticular wards needed to create a trust? |
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Definition
| No-dont have to even say "trust" or "trustee" |
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Term
| What is the critical destinction between a charitable trust and a non-charitable trust? |
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Definition
| Non-charitable Trust: beneficiaries must be definite and interest must vest within RAP. Charitable Trust: beneficiaries do not have to be definite and not subject to RAP. |
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Term
| Does the intent to create a trust have to be imminent? |
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Definition
| Yes and No. If intent is to create a promise in the future, there has to be consideration |
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Term
| Do trusts have to be in writing? |
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Definition
| Generally Yes. All trusts have to be in writing-except a transfer of personal property to a trustee other than the settlor or beneficiary coupled with a declaration of intent simultaneous with or prior to the transfer. |
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Term
| Are trusts presumed revocable or irrevocable? |
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Definition
| Revocable. In Texas, all inter vivos trusts are revocable and amendable by the settlor unless expressly made irrevocable and unamendable. |
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Term
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Definition
| Provides a means for adding testamentary assets to a trust created by the testator during lifetime. By statute, such a pour-over gift is valid (1) even if trust is subject to revocation and amendment and is later amended or (2) even if trust is unfunded |
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Term
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Definition
| No interest is valid unless it must vest, if at all, not later then 21 years after some life in being at the interest's creation. |
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Term
| If a trust violates RAP, what do we do? |
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Definition
| Cy Pres statute. If the trust violates RAP, the instrument shall be reformed or construed so as to carry out the settlor's general intent. |
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Term
| What are the requirements of a charitable trust? |
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Definition
| (1) Must be for a charitable purpose: confers a substantial social benefit (i.e. religious, educational, poverty, medical research). (2) A certified copy of the petition must be sent to the Texas AG by certified mail, so that the AG can decide whether to appear at the proceeding. |
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Term
| If the named charitable beneficiary under a trust ceases to exist, or ceases to qualify as a charitable trust, what do we do? |
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Definition
| The Trustee may WITHOUT COURT APPROVAL name a new charity as beneficiary. But, must carry out the settlor's general purpose as near as possible to the intended purpose. |
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Term
| An object is the beneficiary, what do we do? |
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Definition
| Create an honorary trust. Trustee is, however, only on their honor to perform. |
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Term
| An animal is the beneficiary of the trust, what do we do? |
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Definition
| Valid, but only animals alive during the settlor's lifetime can be beneficiaries. Remember that an outright bequest to an animal is void. |
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Term
| Purchase Money Resulting Trust |
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Definition
| A pays the purchase price for land, and causes the title to be taken in B's name. A and B are not related. This creates a presumption of a PMRT. |
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Term
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Definition
| Not a trust. It is an equitable remedy whose object is to discourage unjust enrichment. Enables the injured party to recover the very property in dispute. Two elements: (1) unjust enrightment and (2) wrongful conduct. |
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Term
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Definition
| Judgment creditors cannot reach beneficiary's interest in spendthrift trust by garnishment or attachment. Exceptions: (1) contract for necessity; (2) child support; (3) any interest retained by the settlor; (4) federal tax liens. Once income is distributed, it is no longer subject ot the trust or the spendthrift clause. However, creditors would have to file suit each time the beneficiary received a distribution to collect. |
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Term
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Definition
| Irrevocable Trust + Sole discretion of the trustee |
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Term
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Definition
| Beneficary can compel a distribution of amount they need for their support, even if the trust has langauge "at the trustee's sole discretion." |
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Term
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Definition
| Individual trustee; county of the trustee's residence or county in which the situs (principle office) of trust is located. Two trustees: county where trust has been maintained. Corporate Trust: county in which situs of trust has been maintained. |
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Term
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Definition
| Trust beneficiaries are entitled to an acounting, on demand, no sooner than 12 months after trust was created |
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Term
| Scope of Trustee's decision making power? |
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Definition
| Very broad. Generally, if a fee simple owner can do it, so can a trustee. Two exceptions: (1) self-dealing (duty of loyalty) and (2) imprudent investments. |
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Term
| If a trustee breaches their fiduciary duty, what can a beneficary do? |
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Definition
| Beneficiary can (1) bring an action to deny the trustee compensation; (2) bring an action to remove the trustee; (3) ratify the transaction and waive the breach of trust; (4) if the trustee still has possession of the property, the beneficiary can petition for the imposition of a constructive trust. 4 year SOL against Trustee. It doesnt begin to run against him until (1) he repudiates the trust; (2) dies or resigns; (3) gives an accounting and makes full disclosure of the facts upon which action is based. |
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Term
| If there are two or more trustees, and one trustee does not agree with the investment decision of the majority would should he do? |
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Definition
| Majority rules. But, you should take actions to CYA because in Texas each co-trustee has an affirmative duty to prevent breach of trust by a co-trustee. So, dissenting trustee should (1) not participate in the transaction and (2) express dissent in writing. |
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Term
| Uniform Prudent Investor Act |
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Definition
| Trustee has a duty to invest for total return, taking into account potential appreciation and capital gains as well as ordinary income. Prudence is measured at the time that the investment is made, not in hindsight. |
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Term
| Uniform Principle & Income Act |
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Definition
| Trustee can exercise adjustment power in favor of income beneficiary where appropriate and can allocate capital gains and principle to income. |
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Term
| Can a beneficiary bring a direct action against third party who causes injury to trust property? |
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Definition
| No. Trustee has to sue, unless (1) trustee is unable to sue or unwilling to bring action or (2) third party participated with trustee in commiting breach of the trust |
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Term
| How long can a trustee continue to exercise trust power after termination of the trust and for what purpose? |
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Definition
| Reasonable time needed to wind up trust affairs and make distributions to the beneficiaries |
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Term
| Judicial modification or termination of the trust |
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Definition
| Two major ways: (1) a trust terminates automatically according to its terms. (2) Upon petition of a trustee or beneficiary, court may order that the trustee be changed, that the trust terms be modified, or that the trustee be forced or restrained from doing certain acts identified in trust terms if changed circumstances test is met (due to circumstances not known or anticipated by settlor, modification or termination will further the purpose of the trust). One minor way to terminate a trust--uneconomic trust: after giving notice to the beneficiaies, the trustee of a trust having a value of less than $50,000 may terminate the trust without the court's approval if the trustee determines that the cost of administration does not justify continuation. |
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