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Wills and Trusts
Santa Clara University School of Law
Spitko, E. Gary

OUTLINE—WILLS & TRUSTS, Spitko
 
I.                    THE POWER TO TRANSMIT PROPERTY AT DEATH; JUSTIFICATIONS AND LIMITS
A.      Why allow dead people to decide what to do w/ property, but not to vote?
B.      Purpose of limiting power of dead hand:
1.       Dead people don’t have to deal w/ consequences.
a.       But dead people don’t have to deal w/ conseq of property either.
2.       POLICY—Advantages of allowing wills:
a.       Incentive for one to be productive and gather wealth (save $) in lifetime
b.       Security for family members, eases their transition into death.
c.        Economic stability for descendants—not on welfare, helps maintain family.
d.       Property owner is best suited to decide who gets his prop (e.g. small business is better run by one’s son than the gov.).
3.       POLICY—Disadvantages of allowing wills:
a.       Wealth gets passed onto children who are born lucky.
b.       Surviving spouse automatically has right to certain portions of property even if dead spouse intentionally disinherits spouse.
C.      Restraints
1.       Allowed
a.       RULE: A testator may validly impose a restraint on the religion of the spouse of a beneficiary as a condition precedent to inheriting under the will. (Shapiro v. Union)
i.)                   No constitutional violation on right to marry. Son can still get married.
ii.)                  Not agnst public policy. 
(a)     No restraint to marry. 
(b)     Son has option to marry shiksa and not get inheritance. 
(c)     Testator’s intent wasn’t to restrain son’s marriage, it was to promote Judaism.
b.       Partial restraints on marriage allowed.
2.       Not allowed
a.       Banning marriage altogether.
b.       Promoting divorce
3.       Failure of Condition vs. Invalid Condition
a.       Failure of Condition [i.e. if NOT met and there’s no express clause giving alternative condition] i.)                   If ct strikes the condition, the gift takes effect as though the condition had not existed. (E.g. Son gets gift, not Israel, b/c he doesn’t have to marry Jewish anymore.)
b.       Invalid Condition
i.)                   If testator provides for an alternative gift in the event of INVALIDITY of condition (as opp to condition not being met), then most cts will give effect to the alternative gift. (E.g. If dad says to give son $ if he marries Jewish but give son car instead if he marries shiksa, and ct finds the 1st condition invalid, ct will give son car.)
4.       POLICY TODAY: A condition is void if it induces illegal and tortious bhvr, promotes divorce, unrxbly restrains marriage, disrupts family rltnsps.
D.      Policy
1.       Honor intent of testator.
2.       BUT…if testator wants something destroyed, that provision won’t be enforced unless there’s a good reason. 
a.       E.g. Testator directs executor to tear down his house b/c he doesn’t want anyone living in it. 
i.)                   Won’t be enforced by ct unless there’s a good reason. Not wanting anyone to live in it is not good decision.
E.       Who can challenge a will? 2 types of people:
·         Someone who stands to lose in a revised will can challenge the will.
a.       RULE: If a 2nd will reduces the amt from an o.g. will, you can challenge the reduction. If a 2nd will adds, then can’t challenge.
·         People who stand to benefit directly.
a.       People have standing only if they can benefit financially.
F.       3 ways to pass property at death:
1.       Will
2.       Intestacy
3.       Will Substitute
G.      Will Substitutes
1.       Today, most property is transferred via will substitutes rather than wills themselves.
2.       Will Substitutes are an important way to pass property at death. 
a.       Inter vivos revocable trust is the perfect W/S b/c very flexible and doesn’t go to probate.
3.       RULE: Can’t take away rights of an owner to dispose of property rights is a taking w/o just compensation or else it violates owner’s rights guaranteed under 5th Am. (Hodel v. Irving).
II.                  WILLS: CAPACITY AND CONTESTS
Things that go on in testator’s head that may affect validity of will:
·         Mental Capacity
·         Insane Delusion
·         Undue Influence
·         Fraud
 
A.      Mental Capacity—the amt of memory and understanding nec to execute a will. This is what testator is capable of knowing, i.e. the ability to know and understand what he is doing.
1.       Test (lenient std): Testator must…
·         Know nature and extent of property [what he owns] ·         Know natural objects of his bounty [i.e. people he’s expected to favor in will] ·         Comprehend action and its effect [must know what he’s doing and why] ·         Be able to manipulate the first 3 elements in order to execute his will.
 
a.       Hypo: Bill Gates owns so much property and doesn’t know everything he owns, i.e. object of his bounty. Does he have the MC to execute a will?
i.)                   Yes. MC is what he’s capable of knowing. He has the ability to know and understand that he owns property, if he were told to do so.
2.       How is will affected?
a.       RULE: Without MC, entire will is void. (Cp w/ ID, UI, Fraud—only affected provisions are void.)
b.       Lucid interval—a period where testator has full MC.
i.)                   If will is written during lucid interval, then MC is good and will is good.
3.       Mentally Challenged vs. Lacking MC
a.        Mentally challenged person is different from person lacking MC. 
i.)                   E.g. Forrest Gump can’t sell/give his house during his lifetime, but may still execute a will devising house to siblings if he fulfills all elements of MC. 
4.       Purpose of req’ing MC
a.       Don’t want to give effect to will unless it reflects the true desire of testator.
b.       Protects decedent’s family members.
5.       Restraint—Is this a restraint on testamentary freedom?  2 views:
a.       Yes. 
b.       No. Protects someone lacking MC.
c.        But gives judge chance to rewrite will.
B.      Insane Delusion—a belief in a state of supposed facts that do not exist and which no rational person would believe.
1.       Mistake of Fact vs. ID
a.       Mistake: does not invalidate will.
b.       ID: invalidates provisions of will written under ID.
c.        Difference: Mistake is only ignorance and is susceptible to correction if pointed to the truth. ID is belief of false info even if presented w/ the truth.
2.       Test: 
a.       See if testator persists in believing supposed facts which have no existence and agnst all evidence.
3.       How is will affected?
a.       RULE: O

o an alum “give us $10M and we’ll name a bldg after you.” It’s influential, but not UI.
5.       Demonstrating UI
a.       Direct Evidence
i.)                   Hard to prove b/c an evil individual doesn’t normally exert UI in presence of witnesses.
b.       Circumstantial Evidence—look at extrinsic evidence
i.)                   Motive.
(a)     See if UI-er becomes beneficiary (though it’s not req’d)
ii.)                  Unnatural Disposition.
(a)     Disinheritance of close family members
(b)     Devises to charity instead
(c)     Revoking and rewriting will, then dying shortly after
iii.)                Opportunity and Access.
(a)     UI-er lives in close physical proximity
(b)     UI-er has key to testator’s house
iv.)                Rltnsp b/t Testator and Alleged UI-er.
(a)     Confidential rltnsp, kept secrets
(b)     Confidential rltnsp alone isn’t enough to prove UI or to give rise to presumption of UI.
v.)                 Susceptibility and Ability to Resist.
(a)     physical condition
(b)     mental condition
(c)     testator’s age, health, intelligence, business experience
(d)     psychological dependence on UI-er
(e)     physical dependence on UI-er
vi.)                Connection b/t Will and Alleged UI-er.
(a)     The closer the connection b/t the will itself and the alleged UI-er, the greater the likelihood of the ct finding UI. E.g. UI is more likely if UI-er suggested testator needed a will, wrote will, and was physically present when testator executed will.
6.       No-Contest Clauses
a.       For a no-contest clause, need to give enough of an incentive (i.e. give substantial amts of property) for beneficiaries not to fight will.
b.       Should no-contest clauses be enforced?
i.)                   No. 
(a)     Don’t shield atty from liability.
ii.)                  Yes.
(a)     Gives beneficiaries chance to testify agnst will b/c testator may have lacked MC.
D.      Fraud—a false representation of facts w/ the intent that another will rely on the misrepresentation to his detriment. Elements:
·         Misrepresentation
·         Intent to mislead testator
·         Intent to influence the will
·         Must in fact mislead testator
·         Must in fact influence the will
 
1.       How is will affected?
a.       RULE: Only provisions affected by fraud are void. (Cp w/ MC—entire will is void.)
2.       Fraud in the Execution vs. Fraud in the Inducement
Fraud in the Execution—testator is deceived as to either (1) the identity of the instrument the testator signed, or (2) the contents of the will. Fraud prevented testator from knowing the true nature of the document being