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

Wills and Trusts Outline

Power to Transmit Property at Death: Its Justifications and Limitations
I. Policy of Passing Wealth at Death
a. Testamentary freedom
i. Right to pass on property after you die
ii. Right to decide who gets it
iii. To decide form in which they get it
1. e.g. out right, in trust
iv. Right to appoint someone else to decide how to make these decisions
b. Why we respect testamentary freedom
i. Why do we not allow dead people to vote
1. Less stake in outcome of election
2. Not as informed about future election
ii. Why we should not allow dead people to pass on property -> reasons to limit testamentary freedom
1. Not as well informed about current circumstances
2. Don’t have to deal with consequences of their decisions
3. Unfair advantage to the advantage (keep the rich from getting richer)
a. Inequality of wealth largely due to inheritance
b. Weakening arguments
i. “wealth” mainly given when parents alive
1. E.g. education, down payment on house, etc.
ii. loss of wealth
iii. Why we should allow dead people to pass on property -> reasons not to limit testamentary freedom
1. People should be able to do what they wish with their property at their death
2. Encourages accumulation of wealth
3. Notion that is it a natural right
4. Brings great pleasure that when they die, their heirs will be taken care of
5. Taking care of family
6. Encourages utilization of property
7. Encourages saving
c. Seven values grounded in inheritance laws
i. Promotion of donative intent/freedom
ii. Administrative convenience
iii. Implementation of marital sharing theory
iv. Responsiveness to changing nature of family
1. E.g. conduit theory
a. step children, blended families
v. Deemphasis of formulism
1. UPC § 2-503 – harmless error
vi. Desire for uniformity
1. See it in elective share, but not intestacy
vii. Unification of wills and will substitutes
1. Trend is to apply law of wills to will substitutes
2. BUT they don’t always apply
II. “Dead Hand” Problem
a. RTP § 10.1
i. The donor’s intention is given effect to the maximum extend allowed by law
b. RTT § 29(c)
i. Invalidates trusts that are contrary to public policy
c. Standing
i. Requires a direct pecuniary interest in success of your challenge
1. No standing just because you are named in the will
2. E.g. You are an heir
d. Rules of law that prohibit or restrict freedom of disposition
i. Spousal rights
ii. Creditor’s rights
iii. Unreasonable restraints on alienation
iv. Unreasonable restraints on marriage
1. RSPDT § 6.2
a. A reasonable restraint on marriage is valid
i. Unreasonable if unlikely to happen
2. RTT
a. Any devise intended to induce a beneficiary to act or refrain from acting in an intimate area of one’s life is invalid
v. Disruption of family interactions
vi. Provisions promoting separation or divorce
vii. Impermissible racial or other categoric restrictions
viii. Provisions encouraging illegal activity
1. e.g. tortious behavior
ix. Rules against perpetuities and accumulations
x. Waste
1. A will provision directly destruction of property at death not valid
a. But property owner can destroy property while alive
e. Will construction
i. Testator’s intent
1. Modern approach
a. Looks at structure of language/devise
b. Will not look into decedent’s mind
2. Traditional approach
a. Will look into decedent’s mind
ii. Invalidated provision
1. Struck from will
2. Some jxd
a. Gift over will still occur despite invalid condition
i. E.g. to my son if he divorces his wife and if not, then to my daughter
III. Probate and Nonprobate Property
a. Probate
i. Property that passes under the decedent’s will or by intestacy
b. Nonprobate
i. Property passing under an instrument other than a will
ii. Includes
1. Joint tenancy property
a. Real and personal
2. Life insurance
3. Contracts payable-on-death provisions
4. Interests in trust

I. Capacity and Contest
a. Mental capacity
i. Definition -> the amount of memory and understanding necessary to execute a will
1. Test is one of capability, not of actual knowledge
2. Legal presumption -> in favor of sanity
3. Lucid interval
a. i.e. only looking at a snapshot of a particular time; how was that person’s memory at that particular point?
ii. Test
1. Testator must know the nature and extent of his property
2. Must know the natural object of his bounty
a. i.e. the people he wants to favor
3. Must need to know that he is making a will and the disposition he is making
4. The ability to hold the first 3 things above long enough to execute a will
iii. Rationale
1. Protect testamentary freedom
a. Want to effect the testator’s intent
2. Protect the testator’s family
iv. Limits
1. Not as great as your capacity to devise your property during your life
a. E.g. conveying a deed
2. Rationale
a. Interested in protecting the testator’s property during their life since they’ll have to live with the consequences
b. Insane delusion
i. Often combined with mental capacity
ii. Delusion -> a false conception of reality
iii. Insane delusion -> belief in a supposed state of facts that do not exist, and which no rational person would believe
1. Majority approach
a. A delusion is still insane even if there is some factual basis for it if a rational person in the testat

ce of it results in more likelihood of finding UI
b. Usually need a suspicious circumstance
2. Definitions
a. A fiduciary relationship as a matter of law
i. Further inquiry not needed
b. Due to actual circumstances
i. Do you depend on this person for advice?
ii. Do you depend on this person for needs?
c. Extreme closeness
d. Extreme dependence
vii. Reasons for disinheritance
1. Reasons for not including honest details
a. Evidence of motive of UI
b. Giving disinherited people move reason to sue
c. If you get the details wrong, suggests testator was not of sound mind
i. what else is testator wrong about???
d. Risk that details proven untrue
e. Giving jury reason to redistribute estate
f. Risk of libel
2. Alternatives
a. Write a letter and give it to attorney
i. Only open letter if needed
ii. Gives no reason for others to contest or sue
viii. No-contest clause
1. Majority approach
a. No-contest clause enforced unless there is probable cause for the contest
i. If the contest has merit, no-contest clause not enforced
ii. Rationale
1. discourage contests lacking merit
2. encourages contests with merit
2. Minority approach (CA included)
a. Clause enforced unless beneficiary alleges forgery or subsequent revocation by a later will or codicil, or beneficiary is contesting a provision benefiting the drafter of the will or any witness thereto
ix. Bequests to attorneys
1. Regulated by ABA rules and state laws
2. If a person who is a lawyer drafting the will in which he benefits, then that is bad practice
a. Exceptions
i. Relatives
1. close blood relations and domestic spouse
ii. Independent counsel certification (CA)
d. Fraud
i. Elements
1. Misrepresentation
2. Intent to mislead
a. Negligent misrepresentation not sufficient
3. Intent to influence will
4. Does mislead
5. Does influence will
ii. Consequences
1. A provision procured by fraud is void
iii. Fraud in inducement
1. Misrepresentation causes testator to execute will
2. Inducement v. UI
a. UI
i. Replacing freewill of testator with freewill of influencer
ii. The UI will is not testator’s will
b. Inducement