Estates and Trust Outline

I.

Introduction
a. Reasons for promoting inheritance
i. Instinct to care for children
ii. Maximizes incentive to build more property
iii. Promote family harmony
iv. Equity issues sometimes property in one persons name was got
through efforts of others
v. Encourages people to remain productive members of society
vi. May be an obligation to support the family especially if there are
small children
b. Reasons for discouraging inheritance
i. Keeps the wealth in the hands of the wealthy
ii. Endorses building personal estate instead of spreading it around
iii. Reduces incentive of potential heirs to build their own capital
iv. Reinforces class system
v. Can cause more conflict within the family due to the wealth
vi. Wills can be ambiguous and intent can be hard to determine
vii. Can cause property interests to dissipate into smaller and smaller
pieces that become economically not useful
c. Important statutes
i. Statute of Wills, 1540 foundation of modern law of wills
ii. Statute of Frauds, 1677 required wills to be in writing
iii. Wills Act, 1837 established will execution procedures
iv. Uniform Probate Code drafted in 1969, revised in 1990. About a
third of states have adopted it at least in part.
d. Terminology
i. Common Law
1. Real property
a. By will devise, devisees, distributees
b. By intestacy descent, heirs
2. Personal property
a. By will legacy, bequest, legatees
b. By intestacy distribution, distributees, next of kin
ii. UPC
1. devisee any taker of land or personal property under a
will
2. heir any taker of land or personal property by intestacy
iii. Probate/non-probate
1. non-probate property: joint tenancy property, life
insurance, contracts with payable on death provisions,
interests in trusts
e. Purposes of probate
i. Prove validity of a will
ii. Identify heirs or devisees
iii. Provide evidence of transfer of title

II.

iv. Protect creditors by requiring payment of debts

v. Distribute decedents property to those intended (after creditors
paid)
f. General probate process
i. Death of deceased
ii. Appointment of personal representative (executor or administrator)
iii. Notice to devisees/heirs and creditors
iv. Administration of estate assets
v. Closing of estate and distribution
g. Professional responsibility
i. Courts have held that attorneys have a duty to a third party
beneficiary because they are more likely to be hurt by an attorneys
negligence when drafting a will. See Simpson v. Calivas.
Intestacy
a. Basic Scheme
i. Advantages to a will
1. stuff goes where you want it to
2. hopefully can avoid upsetting family by making decisions
3. make sure certain parties are taken care of
4. disinherit your children
5. set up a guardian
6. can waive bond requirement
7. estate may be larger at time of death
ii. Policies of intestacy
1. carry out probable intent of average intestate decedent
2. protect financially dependant family
3. avoid complicating property titles and excessive
subdivision of property
4. promote and encourage nuclear family
5. encourage accumulation of property by individuals
6. produce pattern of distribution that recipients believe is
fair/doesnt produce disharmony
iii. MO 474.030 partial intestacy
1. If not all of the estate is validly disposed by will, part not
disposed is distributed by intestacy.
b. Share of Surviving Spouse
i. Must first decide if there is a surviving spouse. General rule in
most states is that spouse has to survive by 120 hours in order to
inherit.
1. MO 461.042 individual who is a beneficiary must
survive by 120 hours to take.
ii. To determine whether there is a spouse must figure out if marriage
is valid. Must look at whether state recognizes common law
marriage or cohabitation. Also must make sure there is no final
divorce decree.
iii. UPC 2-102 surviving spouses share

1. entire estate if there are no descendants or parents or if no

stepchildren
2. First $200k plus of the balance IF no descendants, but
parents
3. First $150k plus of balance IF all Ds descendants are
spouses and surviving spouse had descendants not
descendants of decedent
4. First $100k plus of balance IF decedent has descendants
not descendants of spouse
iv. MO 474.010(1) surviving spouses share
1. entire estate if no surviving issue
2. First $20k and balance if all issue are issue of spouse
3. of estate if issue not issue of surviving spouse
c. Share of Ancestors and Collaterals
i. UPC 2-103
1. Any part of estate not passing to spouse passes in following
order
a. Decedents descendants
b. Decedents parents
c. Descendants of decedents parents
d. Grandparents or descendants of grandparents
e. 2-105 if no descendants then escheats to state
ii. MO 474.010(1)
1. part not distributed goes to
a. decedents children or their descendents
b. father, mother, brothers, sisters, or their descendents
c. grandparents, aunts, uncles, or their descendents
d. great-grandparents or descendents
2. family must be related in the 9th degree to take
3. MO looks to the relatives of surviving spouse before letting
property escheat to state
4. MO 474.040 allows relatives related by half blood to
inherit half of the amount a relative of the whole blood
would inherit.
iii. Three ways to divide up property
1. classic per stirpes
a. Principle: younger generations divide the share the
older generation descendant would have received
b. Approach: divide into as many shares as living
children of deceased plus deceased children with
living descendants. Children of deceased
descendants represent parents.
2. per capita with representation/modern per stirpes
a. Principle: younger generations divide the share the
older generation descendant would have received.

b. Approach: start at the level nearest to decedent

with a surviving descendant.
c. This is more likely to result in people of the same
generation taking the same amount.
d. MO follows this approach.
3. per capita at each generation
a. Principle: equality among like-related persons
b. Approach: start at level nearest decedent with
surviving descendants. Shares created on behalf of
deceased members of that generation are combined
and distributed per capita among the younger
generational heirs.
iv. Negative Disinheritance
1. This occurs when leave will that says X gets no property.
2. Under UPC we would treat X as predeceasing the decedent
3. In MO follow common law so entire estate must be
distributed if want to disinherit X. If want to disinherit a
line, must disinherit everyone or the next generation will
take.
d. Transfers to Children
i. Step-children and foster children do not have any intestacy rights.
ii. Posthumous children general rule is rebuttable presumption that
a child born within a certain number of days after death is
presumed to be the child of the father.
1. MO 474.050 posthumous child law.
iii. Artificial insemination issues Woodward case
1. Must show that the deceased consented to posthumous
reproduction and consented to support any child arising
after death in order for the child to take under the intestacy
statute.
2. Purpose of these requirements is to prevent fraud. May
also have a time requirement to allow for closure of the
estate.
iv. Adopted children general rule is that adopted children are treated
the same as biological children.
1. Hall v. Vallandingham cannot inherit from adopted
parents and biological parents because double taking is not
allowed.
2. UPC 2-114: children are allowed to inherit through
natural parent if adopted by a step parent.
3. MO 474.060: adoption severs ties to natural parent
except if adopted by step-parent.
v. Non-marital children traditional rule was that they could not
inherit.
1. Trimble v. Gordon (1977) state could not completely
prohibit non-marital children from inheriting

2. Lalli v. Lalli (1978) state can require determination of

paternity outside of marriage to preserve inheritance rights.
3. MO 474.060(2) paternity has to be established by
participation in marriage ceremony or adjudication of
paternity. Child is child of mother no matter what.
vi. Advancements
1. gift by decedent during life that reduces recipients share of
intestate estate
2. To be advancement gift must be
a. Acknowledged by decedent in a contemporaneous
writing as an advancement OR
b. Acknowledged by recipient as an advancement
3. UPC 2-109 and MO 474.090 cover advancements
4. Advancement calculations:
a. When decedent dies, first calculate fractional
intestate shares
b. Value the gifts
c. Add back value of gifts to create hotchpot estate
d. Determine intestate shares
e. If one child got more than their share, recalculate
the hotchpot without his share and refigure intestate
shares excluding that person
f. Subtract the advancements from the childrens
shares
vii. Issues with children
1. guardianship
2. managing property
3. avoiding taxes for spouse
e. Bars to Succession
i. Slayer statutes
1. concern is that we dont want people who are responsible
for intentional death of another to take from their estate.
2. Constructive trust: legal title passes to slayer but would
hold it subject to the use for the other heirs.
3. Mahoney case court draws a line between voluntary and
involuntary killings. Would allow a person to take if the
killing was involuntary
4. UPC allows that cannot take probate or non-probate
property if murderer. Treats the slayer as having
predeceased the decedent. A criminal conviction is enough
to keep the slayer from taking under 2-803(g).
5. MO does not have a slayer statute, but does have a statute
that keeps slayer from some non-probate transfers like life
insurance. 461.054(2).
6. MO 474.140 bars inheritance for spousal abandonment.
ii. Disclaimer

III.

1. when an heir refuses to take property. General rule is that

they are treated as having predeceased the decedent.
2. MO 469.010 disclaimer statute.
Wills: Capacity and Contests
a. Mental Capacity
i. RSMo 474.310 any person of sound mind, 18 years of age or
older may make a will.
ii. Testator must be able to appreciate
1. nature and extent of her property
2. persons who are natural objects of her bounty
3. disposition she is making
4. how these elements combine to produce certain
consequences
iii. Justifications for mental capacity requirement
1. will should only be given effect if it represents Ts true
desires
2. mentally incompetent man or woman is not treated as a
person
3. protects the decedents family
4. acceptance of law requires that legal institutions, including
inheritance, are legitimate, and legitimacy cannot exist
unless decisions are reasoned
5. assures a sane person that wishes will be carried out if
insanity later develops
6. protects society from irrational acts
7. protects senile or incompetent testator from exploitation
iv. Insane delusion a delusion is insane even if there is some factual
basis for it if a rational person in the testators situation could not
have drawn the conclusion reached by the testator.
v. Insane delusions are different from lack of capacity in that they do
not invalidate the whole will; there is just some lack of reality that
causes a gift to be invalid.
vi. There has to be a causal connection between the delusion and the
gift in the will and the test is whether there is some rational belief
that the delusion was true. If there are other reasons for making
the gifts, then they will generally be upheld.
b. Undue Influence
i. Burden on showing undue influence is on challenger in will
contest.
ii. General test
1. T was susceptible to undue influence
2. Influencer had disposition to influence
3. Influencer had opportunity to exercise undue influence
4. Disposition is the result of the influence
iii. Lipper v. Weslow left a clause in the will in anticipation of the
challenge which helps to show there is no undue influence.

IV.

iv. Rule 1.8(c) a lawyer shall not prepare an instrument giving the
lawyer or a person related to the lawyer as parent, child, sibling, or
spouse any substantial gift from a client, including a testamentary
gift, except where the client is related to the donee.
v. No-contest clause: says if you have benefits under the will and
you contest the will, you will lose your share or take some nominal
amount.
vi. Will of Moses court found that gift to Holland was result of
undue influence, but seemed mainly due to the fact that T was a
woman involved with a younger man.
c. Fraud
i. Types of fraud
1. fraud in the inducement someone presents false info to T
that causes him to make a will, not make a will, etc.
2. fraud in the execution character of the document is being
misrepresented.
ii. Requirements for fraud
1. false representation
2. knowledge of falsity/intent
3. T reasonably believed
4. causation
Wills: Formalities and Forms
a. Execution of Wills
i. Attested Wills
1. History of Wills
a. Statute of Wills (1540) allowed land to be
disposed by will
b. Statute of Frauds (1677) will had to be in writing
and witnessed by three people
c. Wills Act (1837) established same requirements
for personal and real disposition. Required writing,
two witnesses, sign in front of witnesses, T signs at
foot of will.
2. Justifications of will formalities
a. Evidentiary purpose want to have as much
evidence as possible that this is what T wanted to do
with his property
b. Ritualistic purpose by having a ceremony then
shows court this is the formal and serious
disposition of T
c. Cautionary ensure T gave the will careful
consideration and it is the product of deliberative
thought
d. Protective ensure T has full mental capacity and
free will when document was executed

3.

4.

5.

6.

7.

8.

e. Channeling standardization of testation routinizes

probate and reduces cost
Relevant laws
a. UPC 2-502 requires a writing signed by T OR
signed by another person at Ts direction and in Ts
conscious presence. Must have 2 or more
competent witnesses.
i. Witnesses may see Ts signature or Ts
acknowledgement of signature
ii. Witnesses may sign within a reasonable time
after signature or acknowledgement
b. MO 474.320 requires a writing signed by T or
signed by another at Ts direction and in his
presence. Need 2 or more competent witnesses.
i. Witnesses have to attest in presence of T.
Groffman case problem was that witnesses were not there
at the same time and neither one saw T sign the will, so the
will was not validly executed. Result would probably be
different under UPC since T acknowledged his signature to
each witness and they signed in reasonable time.
Two tests for witnessing
a. Line of sight test T has to be able to see witnesses
when they sign
b. Conscious presence test T has to be able to hear,
see, or comprehend that they are there signing the
will
Purging statutes deal with interested witnesses. In Estate
of Parsons, interested witness did not get to take. Witness
has to be disinterested at time of gift, not at time of probate.
Modern rule is to purge the gift to those witnesses.
MO law strikes the amount of the gift above what the
person would take under intestacy laws. UPC does not
disqualify any witnesses and therefore no gifts are
forfeited. Not many states have adopted that statute.
Compliance
a. Common law held that personal property is
governed by law of domicile at death; real property
governed by law of real propertys situs.
b. UPC 2-506 and MO 474.360 allows law of state
of domicile at death, law of state where will was
executed, and law of state of domicile at execution
to be considered.
c. Proof of compliance:
i. MO 473.053 requires witnesses to testify
that will is duly executed.

ii. Attestation clause clause at end of will that

basically recites that execution requirements
were complied with. General rule is to
include one of these with will because they
serve as evidence of execution procedure
and act as checklist of requirements.
iii. Self-proving affidavit recite that execution
procedures were followed. Usually signed
by notary as well as T and witnesses.
Allows will to be probated without any more
proof of what went on.
iv. MO law allows for both types of affidavits
in 474.337 and 473.065.
v. UPC also allows for these in 2.504 and
3-406.
9. Safeguarding the will
a. Clients should be allowed to leave with their will
because there are ethical considerations like
solicitation if you keep the will.
b. Wills can be given to third party to hold. MO
allows T to deposit the will with probate division of
court.
10. General rule is that court will not correct mistakes in
drafting or execution.
11. Substantial compliance if compliance is really close and
there is obviously testamentary intent and disposition, court
will allow probate of the will.
12. Dispensing power court can find by clear and
convincing evidence that document is shown to constitute
will and will be treated as being executed in compliance.
Only adopted in a few states.
ii. Holographic Wills
1. Will written in testators own handwriting that is exempt
from the formalities.
2. MO does not recognize holographic wills.
3. UPC 2-502(b) a will that does not comply with (a) is
valid as a holographic will, whether or not witnessed, if the
signature and material portions of the document are in Ts
handwriting.
4. Can use preprinted forms but will probably have to get it
witnessed under the Johnson case because there is not
enough material info in Ts handwriting to be a valid will.
5. Nuncupative will an oral will. These wills do not affect
an existing written will. MO 474.340. This is allowed in
MO if
a. T is in imminent peril or death,

b. T dies as a result of that peril,

c. two disinterested witnesses are there to see her
declare it her will
d. it is reduced to writing within 30 days
e. it is submitted to probate within 6 months
b. Revocation of Wills
i. Revocation by Writing or Physical Act
1. Wills can be revoked or revised at any time before death.
2. UPC 2-507 states that a will is revoked by
a. A subsequent will that revokes the previous will
expressly or by inconsistency
b. A revocatory act to the will if performed by the
testator or a person at her direction with intent to
revoke in whole or in part
i. Revocatory act includes burning, tearing,
canceling, obliterating, or destroying
whether or not touching the words of the
will
3. MO 474.400 allows for revocation by
a. Subsequent will in writing
b. Burning, canceling, tearing, or obliterating will by T
or someone at her direction
4. preferable method is to revoke by another instrument so
there is no question about Ts intent
5. general rule is that if T enacts a codicil and later revokes it,
that does not revoke the whole will. However, if the
original will is revoked, the general rule is that all the
codicils are also revoked.
6. General rules is that when there is evidence that the will
was in the possession of T presumption arises that T
destroyed the will with intent to revoke if it is not found.
To rebut this presumption need to show that T did not
destroy the will or have intent to revoke.
ii. Dependent Relative Revocation and Revival
1. doctrine of conditional revocation revocation is done on
condition of something else happening.
2. Doctrine of Dependent Relative Revocation
a. If T revokes will on mistaken assumption of law or
fact, revocation is ineffective if T would not have
revoked had she known the truth.
b. this doctrine applies only when there is an
alternative plan of disposition that fails OR where
the mistake is recited in the terms of the revoking
instrument or possibly is established by clear and
convincing evidence

c. Example: T crosses out 1000 gift to nephew and

pencils in 1500. When she dies the issue is whether
the gift was revoked or whether she was trying to
increase it. Under dependent relative revocation,
we know she would have at least wanted him to
take 1000, so the new gift is allowed to stand.
3. Revival
a. UPC 2-509 states that if a subsequent will that
revoked a previous will in whole or in part is
revoked by another later will, the previous will
remains revoked in whole or in part unless it is
revived. The will is revived to the extent it appears
from the terms of the later will that the testator
intended the previous will to take effect.
b. MO 474.410(2) if second will is revoked by
third will then unless there is intent to revive the
first will it is not revived.
c. Under both UPC and MO law, if have revocation by
acts still must have evidence of intent to revive in
order to do so.
d. Partial revocations:
i. UPC 2-509(b) if a subsequent will that
partly revokes a previous will is revoked by
a revocatory act, the revoked part of a
previous will is revived unless it is evident
from the circumstances of the revocation
that T did not intend for it to be revived.
ii. MO 474.410(1) have to show that T
intended first will to be revived in order to
revive from a partial revocation.
e. English common law: will #1 not revoked unless
will #2 remains in effect until Ts death
f. Majority US view: will #2 revokes will #1 at time
will #2 is executed. Upon revocation of will #2, the
first is revived if T so intends.
g. Minority US view: will #1 cannot be revived unless
executed again with formalities or republished in a
later duly executed testamentary writing.
iii. Revocation by Operation of Law
1. UPC 2-804(b)(1) treats a divorced spouse as being
predeceased, so any gifts to the spouse or his family will be
revoked.
2. MO 474.420 same result as under UPC. Gifts to the
spouses relatives are not revoked in MO.
c. Components of a Will
i. Integration of Wills

1. will may consist of more than one page. When T executes

the will by signing it, all of those pages, and only those
pages, that are present and that T intends to include as part
of the will are integrated into it.
2. Evidence of integration some physical connection of
papers like staple, text continuing onto next page,
numbering, have T initial every page in the document,
recite the number of pages in will in attestation clause, use
consistent fonts and paper
ii. Republication by Codicil
1. Codicil is an amendment to an existing, valid will.
2. If codicil expressly refers to previous validly executed will,
will is treated as being republished. Hence, a codicil can
revive a revoked will.
3. A codicil cannot make valid an invalidly executed will, so
cant use this to make up for inadequacies in execution.
iii. Incorporation by Reference
1. Common law doctrine that allows us to treat a document as
testamentary even though it is not integrated into the will.
If successfully incorporated, treated as if the terms of that
document are actually contained in the will.
2. UPC 2-510 any writing in existence when a will is
executed may be incorporated by reference if the language
of the will manifests this intent and describes the sufficient
to permits its identification
3. concerned about fraud and dont want T to make changes
without the formalities. Also concerned about undue
influence
4. Separate document can be identified by putting it in a safe
deposit box and putting something in the will about its
location, attaching it to the will, or describing it in enough
detail.
5. Doctrine is followed in all but three states.
6. UPC and some states allow for disposition of personal
property by a written list even if that list is not incorporated
by reference.
a. UPC 2-513
i. Applies to all tangible personal property
except money
ii. List must be referred to in the will and
signed by T
iii. List must describe the items and devisees
with reasonable certainty
iv. List does not have to be in existence at time
will is executed
v. List may be altered after its preparation

V.

vi. List does not have to have independent

significance
b. MO 474.333
i. applies to tangible personal property other
than money, securities, and the like
ii. list must be referred to in will and must be in
Ts handwriting or signed by T
iii. must be dated
iv. must describe items and devisees with
reasonable certainty
v. does not have to be in existence at time will
is executed
vi. may be altered after preparation
vii. does not have to have independent
significance
iv. Acts of Independent Significance
1. Extrinsic evidence can be referred to in order to identify
property or beneficiaries if acts which select the property or
beneficiaries result from factors other than motives to
dispose of property at death
2. UPC 2-512 will may dispose of property by references
to acts and events that have significance apart from their
effect upon the dispositions made by the will, whether they
occur before or after the execution of the will or before or
after the testators death
3. Examples
a. T bequeaths content of safe-deposit box.
Independent significance here is safe-keeping so
this gift is okay.
b. Will gives residue of estate to any trust established
by brothers will. May have independent
significance since his will and establishment of a
trust are independent from any disposition she
makes.
Construction of Wills
a. Admission of Extrinsic Evidence
i. No extrinsic evidence rule use the words of the will and dont
use extrinsic evidence to show another meaning is intended. This
rule is used when the language of the will is unambiguous.
Concern is protecting security of the written document. Rule from
Mahoney case.
ii. Plain meaning rule is the other name for extrinsic evidence. An
exception to this is the personal usage exception if a term is
unambiguous and has a clear meaning but the testator may have
meant something else may be able to show that personal usage
gives it a particular meaning.

1. Example: Trimble works for Moseley. Decedent lives in

house where Trimbles wife works and calls her Mrs.
Moseley. When D leaves property to Mrs. Moseley who
takes? Court will use personal use exception and allow
Trimbles wife to take.
iii. Fleming case allowed extrinsic evidence because the issue was the
validity of the will, not construction. If the will were not valid, we
could not even interpret it, so first have to determine if the
document is a will.
iv. PR Rules involving wills
1. Rule 1.2(d) cannot counsel a client or assist a client in
criminal or fraudulent conduct
2. Rule 8.4 cannot engage in conduct involving dishonest,
fraud, or deceit
3. Rule 4.1 cannot lie to anyone, including 3rd parties
v. Estate of Russell will left everything to Roxy Russell, who is a
dog. Statute did not allow bequests ot animals, so Quinn wanted to
introduce extrinsic evidence to show that he was going to take care
of the dog so he should take everything. All the court allowed was
evidence to show that Roxy was a dog.
1. MO 456 .055 allows a trust to be set up to care for pet
animals.
vi. Extrinsic Evidence Summary
1. If there is no ambiguity on the face of the will, plain
meaning rule applies.
2. If there is ambiguity on face of the will, common law did
not allow extrinsic evidence but modern cases show some
courts will allow that evidence to resolve patent
ambiguities.
3. Latent ambiguities (those that do not appear on the face of
the will but appear when the terms are applied) like Roxy
Russell, two nieces with same name, etc. will usually allow
extrinsic evidence to identify.
4. If there is a mistake in description the court will often strike
the description to make a valid gift, even though the
general rule is not to correct mistakes.
vii. Erickson case allowed extrinsic evidence to show the parties
thought the will would still be married even though it was executed
before the marriage. Reasons: no policy difference between the
case of erroneous beliefs induced by fraud, duress, or undue
influence and the case where beliefs are induced by innocent error
or misrepresentation; there is a serious risk of subverting the intent
of the testator; the intentions of the testator are rebuttable and the
court does not feel allowing rebuttal will lead to more groundless
will contests.
b. Death of Beneficiary Before Death of Testator

i. Lapse for a beneficiary to take under a will the beneficiary must

survive the decedent. Lapse occurs when the beneficiary does not
survive. Antilapse statutes save some gifts. These are default rules
of construction and T can write in other rules for how to deal with
a situation.
1. Common law rules
a. Lapses of specific or general devise causes the
devise to fall into the residue.
b. MO 474.465(1) except as provided in 474.460 if
devise fails for any reason it falls into the residue.
c. Lapse of a residuary devise causes the devise to fall
into intestacy. (This rule has been changed by most
states)
d. MO 474.465(2) if the residue is devised to two
or more persons and the share of one fails, his share
passes to the other residuary devisee.
e. Class gifts: if one member of class dies, other class
members divide class gift. Issue is when it is a gift
to class as opposed to several different people.
(States have changed this rule as well)
f. If beneficiary is deceased at execution of will, then
devise is void and lapse statute is followed.
ii. Antilapse statues
1. MO 474.460 when any estate is devised to any child,
grandchild, or other relative of the testator and the devisee
dies before T leaving lineal descendants who survive T by
120 hours, the descendants will take the estate as the
devisee would have done if he had survived T. This law
does not include the spouse.
2. UPC 2-605 if devisee is a grandparent or lineal
descendant of grandparent and is dead at time of execution,
the issue of the deceased devisee take in place.
iii. Allen v. Talley will left estate to surviving siblings. Two of the
five survived, and they argued they should split the estate because
surviving was an express condition. Court agrees and lets them
split the estate instead of applying antilapse statute.
iv. Jackson v. Schultz will left property to the wife and her heirs and
assigns forever. She died before the stepfather, so the gift lapsed.
The antilapse statute did not apply but the court construed the will
to save the gift.
v. Class gifts common law is that if class member dies, other class
members divide class gift. Members of class are determined at
death and a class is formed by language like to my nieces and
nephews or something else general.
1. Dawson v. Yucas court found no class gift where there
were more people in the class than listed in the gift. The

devises were also specific pieces, which made it less like a

class gift.
2. Ordinarily class gift is divided equally among members and
membership is determined at time of Ts death.
3. MO has held via case law that the antilapse statute applies
to class gifts.
c. Changes in Property After Execution of Will
i. Default rules are in effect but T can put other provisions in to avoid
them.
ii. Hierarchy of devises:
1. specific devise a certain, definite item.
2. demonstrative devise paid out of a certain fund but if
fund is insufficient, out of general estate
3. general devise paid out of general estate
4. residuary devise often the most important gift and the
bulk of the estate is passed here
iii. Abatement reduction or elimination of a devise to pay an
obligation of the estate or a devise of a higher priority
1. UPC 3-901 and MO 473.620 contain the order of
abatement
a. Intestate property
b. Residuary property
c. General devises
d. Specific devises
2. Abatement is pro rata so each gift within the class is
reduced by the same percentage.
iv. Exoneration what happens when there is an encumbrance on the
property?
1. Common law rule is that the estate pays the value of the
encumbrance absent some other specification in the will.
2. UPC 2-607 and some states have gone the other way and
say there is no exoneration unless the will so specifies.
3. MO 474.450 says if the mortgage is created after will, the
estate pays. If created before property then the person
takes subject to the mortgage.
v. Ademption by Extinction
1. Wasserman v. Cohen court uses rule that when the devise
is for a specific piece of property and that property does not
exist at time of death, the gift fails. This is identity theory
the exact item has to be in the estate or nothing passes.
2. UPC 2-606 adopts intent theory. Presumes gift is not
adeemed unless contrary intent by T is shown. This allows
tracing of proceeds from sale of property, etc. This is
minority approach.
3. Ademption does not apply to general gifts.

VI.

4. Stock splits modern rule is that devisee is entitled to

additional shares from stock splits and dividends. MO
474.063 is the same.
vi. Ademption by Satisfaction
1. Parallel doctrine to advancements. Under common law a
general gift from parent to child is assumed held against the
estate gift.
2. Under UPC 2-609 T must specifically state in writing that
the gift is to be held against the estate.
3. MO 474.425 treats as satisfaction if will provides, it is
acknowledged in contemporaneous writing or by devisee.
Restrictions on the Power of Disposition
a. Rights of the Surviving Spouse
i. Spousal protection
1. homestead rights
a. MO 474.290 surviving spouse or guardian of
unmarried minor children gets the lesser of 50% or
$15k from decedents estate. Amounts received are
offset against estate distributions.
b. UPC 2-402 surviving spouse or dependent
children can get $15k. Amounts received are not
offset against estate distributions.
c. Neither of these provisions depend on the existence
of an actual homestead. The right is to some value
from the estate.
2. personal property exemptions
a. MO 474.250 surviving spouse or unmarried
minor children have absolute right to family bible,
other books, one automobile, all wearing apparel,
all electrical appliances, all household musical and
other amusement instruments, all household and
kitchen furniture, appliances, utensils, and
implements.
b. UPC 2-403 surviving spouse or children,
including adult children, are allowed $10k of
personal property. Not offset against estate
distributions.
c. These statutes are applicable in all circumstances,
not just in those situations where the spouse is
disinherited.
3. allowance of support
a. MO 474.260 surviving spouse and unmarried
minor children are allowed no more than one year
of support. Amount based on standard of living,
condition of estate, income/assets available,

expenses. May elect property in lieu of family

allowance.
b. UPC 2-404 surviving spouse and dependent
minor children. Reasonable allowance for
maintenance during administration of estate.
Capped at $1500 per month of $18k per year.
4. retirement benefits
a. Social Security Benefits paid to surviving spouse
and dependents
b. Private Pension Plans under ERISA spouse has
survivorship rights
5. dower and curtesy
a. dower at common law wife was entitled to life
estate in 1/3 of husbands real property. Idea was
that wife needed a place to live if husband died.
This meant husband could not sell land without her
signature as well.
b. Curtesy at common law, husband was entitled to
life interest in all wifes real property, provided they
had surviving issue. Purpose was that husband had
legal control over her property during marriage, so
that continued.
c. MO abolished these in 1955 and replaced it with
elective shares of spouse.
6. elective share
a. elective share allows spouse to take under the will
or renounce the will and take the elective share
b. partnership theory recognition of marital union as
economic partnership
c. support theory protection against destitution of
surviving spouse.
d. Often called widows share since typically it is a
woman who is living longer and having to decide
whether to elect.
e. MO surviving spouse may elect to receive of
estate if there are no lineal descendents or 1/3 if
there are lineals.
f. UPC surviving spouse elects an amount
determined by a sliding scale based on the length of
the marriage
g. Neither of these statutes fulfills the partnership
theory.
h. Problems with elective share: spouse has to survive
the other spouse; election may be difficult for
psychological or family reasons.

i. Estate of Cross court took elective share for

incompetent widow in home and then made her use
those funds to pay for her care instead of letting her
use Medicaid.
j. Estate of Cooper surviving spouse is the normal
meaning of the word, so this does not extend to
homosexual partners. They cannot elect against the
will.
k. Reciprocal beneficiaries Hawaii
i. Must be 18 years old
ii. Must not be married nor parties to other
reciprocal beneficiary relationships
iii. Must be legally prohibited from marrying
each other
iv. Must not consent to relationship as result of
force, duress or fraud
v. Must sign declaration of reciprocal
beneficiary relationship
l. computing the share
i. MO 474.160 if decedent dies testate
surviving spouse may elect if no lineal
descendants or 1/3 if T had lineal
descendants. An electing spouse takes
nothing under the will and is treated as
predeceased.
ii. MO 474.140 bars inheritance or
statutory rights for misconduct of spouse. If
spouse voluntarily leaves and goes away
with adulterer or abandonment for one year,
then barred from intestate distributions,
homestead, personal property exemptions,
family allowance, or statutory share. Can
only cure by voluntary reconciliation.
iii. MO 474.180 spouse must elect within
statutorily defined time periods. Within 10
days after time for will contest has expired
OR if litigation pending within 90 days after
final determination of the litigation.
iv. MO 474.170 provides for court to notify
spouse of right to elect.
v. MO 474.163 estate does not include
exemptions and allowances. Increase estate
by property derived by decedent
property, insurance, joint accounts =
hotchpot. Offset property derived from
decedent from elective share.

1. Example of calculations
a. Calculate probate estate
b. Calculate non-probate assets
received by spouse
c. Add probate estate and nonprobate assets received by
spouse
d. Calculate appropriate
fractional shares of hotchpot
this is the elective share
e. Subtract non-probate assets
received by spouse from the
elective share. We do this
because the spouse may
already be taken care of by
the non-probate transfers.
f. This is the net elective share
payable by the estate
g. If necessary distributions
under the will are abated to
pay elective share.
m. Transfers to third parties
i. Sullivan case when set up trust for others
to keep wife from taking, in future if keep
control over that trust then she can elect
against it.
ii. Tests for transfers to third parties
1. illusory transfer idea is if the
transfer is illusory and the testator
has really kept control over assets the
spouse ought to be able to count
those assets.
2. intent to defraud idea is the transfer
is done with the purpose of depriving
spouse of marital property
iii. consequences
1. assets subject to elective share
2. beneficiary can be required to
disgorge, if necessary, to pay elective
share
3. assets do not become part of probate
estate
iv. MO follows intent to defraud test -
474.150. Surviving spouse may recover
transfers that are in fraud of marital rights.
Transfers or real estate are presumed

fraudulent unless surviving spouse assents.

Assets treated as part of hotchpot.
v. UPC 2-201 to 2-208 follows a partnership
theory.
vi. There is a sliding scale to determine
percentage of share.
1. Share increases by 3% for each of
the first ten years of marriage and
then increases by 4% until it reaches
50%. Minimum support share of
$50k and non-probate transfers.
vii. Considers property of both spouses in one
augmented estate including
1. net probate estate assets 2-204
2. non-probate transfers by D to third
persons 2-205
3. non-probate assets received by
spouse from D 2-206
4. surviving spouses property and
transfers to third persons 2-207
n. Waiver
i. Estate of Garbade will contained a wavier
of election, but wife sought to set this aside
for fraud. Some courts will allow this is
wife can show relative inequity of the
relationship.
ii. Spouse can waive elective share and all
other rights but decedent cannot draft around
those rights.
iii. UPC 2-213 right of election may be
waived in whole or in part before or after
marriage in writing. Unenforceable if
involuntary or inadequate disclosure.
iv. MO 474.220 right to elect may be
waived before or after marriage by written
contract. Full disclosure and fair
consideration are required. 474.120 deals
with the other statutory rights that may be
waived.
o. Spouse omitted from premarital will
i. Estate of Shannon omitted spouse statue
protected spouse in situation where the
spouse was not anticipated.
ii. MO 474.235 omitted spouse is entitled
to intestate share unless omission was
intentional or T provided for surviving

VII.

spouse by non-testamentary transfer in lieu

of disposition in the will.
iii. UPC 2-301 omitted spouse entitled to
intestate share but only applies to portion of
estate not devised to child of T born before
the marriage. There is a specific abatement
order. Exceptions:
1. will made in contemplation of
marriage
2. will expressed intent to be effective
despite any subsequent marriage
3. T provided for spouse outside will
and that intent shown
b. Rights of Issue omitted from the will
i. Omitted children are not protected like spouses. They are only
protected from unintentional disinheritance, but they can usually
be disinherited. Focus in this area is on children born after
execution of the will.
ii. Azcunce case T executed a codicil after daughter was born, but
still did not mention her. She did not get to take because she was
found to be intentionally omitted.
iii. MO 474.240 provides for intestate share for any child born or
adopted after execution of will. Exceptions
1. omission intentional from face of will
2. other then-living children and will devises substantially all
of Ts estate to omitted childs other parent
3. provision for child outside will in lieu of testamentary
disposition
iv. UPC 2-302 provides share to after born or adopted children. If
no then-living children takes intestate share unless will devised
substantially all to other parent. If then living children, share is
limited to devises to then-living child. Total amount is divided
equally among the children or proportionally if the children do not
take equally. Exceptions:
1. omission intentional from face of will
2. provision for child outside will in lieu of disposition
v. Estate of Laura if children are excluded, their issue are also
excluded. MO and UPC do not mention issue of children.
Will Substitutes: Non-Probate Transfers
a. Contracts with payable on death provisions
i. Reasons for non-probate methods of transferring
1. less likely to be contested
2. less expensive in time and money terms
3. dont have to go through lots of activity to make things
continue on as normal
4. dont have to update what is in will as much

5. estate tax issues

6. more flexibility for T to dispose of property
7. circumvent creditors
ii. Estate of Hillowitz as long as there is a valid contract the courts
will generally uphold POD provisions.
iii. UPC 6-101 is very broad and would include the partnership
agreement in this case.
iv. MO 461.001 says contracts with POD provisions are valid.
Broad definition.
v. Survivorship and Lapse
1. UPC 6-101 has no express survivorship requirement but
anti-lapse rules of UPC 2-706 apply
2. MO 461.042 requires 120 hr survival. 461.045 is the
anti-lapse provision.
vi. Cook case - Life insurance beneficiaries cannot be changed in a
will. This is the majority rule. Exceptions: insurance company
waives right when insured made request, if insured could not
comply literally, if insured dies before the process is complete
vii. Divorce does not revoke POD designation. This is majority rule.
viii. MO 461.051 does not allow modification of beneficiary
designation by will. Exception: if instrument allows modification
by will.
ix. MO law allows that divorce revokes beneficiary designation
minority rule.
x. UPC 6-101 does not say whether will can change life insurance
beneficiary, but 2-804 does say divorce revokes provision in favor
of spouses in both wills and POD designations.
b. Multiple-party bank accounts
i. True joint-tenancy account both owners can deposit and
withdraw and beneficiaries have survivorship rights in the account
ii. Agency or power of attorney account second owner has power to
draw out money to manage affairs of first
iii. POD account owner uses account but other named person takes
balance at death. Second owner has no rights to the account until
first owner dies.
iv. Totten trust (savings account trust) on the account it will say A is
the owner and holds the account in trust for B.
v. MO 362.470, 362.471 covers these types of accounts. Problem
is it is often difficult to determine which one of these the parties
meant to set up.
vi. Franklin case signature card contained survivorship language,
but because he lacked intent to make a gift and only set up the
account for his convenience, the money went into the estate and
not to sister.
vii. Majority of courts will hold that language on signature cards does
not create survivorship rights for safe deposit boxes. Minority of

courts will hold that contracts like this raise a rebuttable

presumption that this is joint.
viii. MO follows majority rule. 362.470 says that in general joint
accounts are to be paid over to the survivor.
c. Joint tenancies
i. When a joint tenant dies, the deceased tenants share is divided
equally among the surviving joint tenants
ii. Interest of the deceased joint tenant is cut off at his death.
Creditors cannot reach it and it cannot be devised by will.
d. Revocable trusts
i. A trust is a relationship with respect to property in which trustee
holds property for benefit of another
ii. Trust requirements: res, trustee, at least one beneficiary
iii. Parties to a trust
1. settlor person who creates the trust
2. trustee person who owns legal title to the property and his
fiduciary duties to beneficiaries
3. beneficiary person who owns equitable title to the
property
iv. Farkas case the stock at issue was held in a revocable trust so
title passed to beneficiary when trustee died. Farkas gave up a
potential right of action by the beneficiary, which made this a trust
and not a testamentary transfer.
v. Pilafas case trust has to be revoked in the method the trust
provides or it is still valid. In this case would have to have a
written instrument to revoke. If no method is given then any
method that manifests intent to revoke would be sufficient.
vi. Clymer v. Mayo dealt with pour over will. When a will pours
everything over into a trust, some courts validate this arrangement
by incorporation by reference. Other courts use acts of
independent significance the trust is independent so dont care
about will. Problem with this is property must be transferred to the
trust during life because has to do something besides transfer at
death. All states have a statute that validates these kinds of wills
regardless of existence of size of trust.
vii. MO 456.232
1. trust must be in writing
2. must be identified in the will
3. may be created before or after will executed
4. may be funded or unfunded
5. may be amended or revoked later
6. revocation or termination of the trust causes the will pourover to lapse
viii. UPC 2-511 has a similar provision to that of MO basically saying
these kinds of arrangements are valid.

ix. UPC 2-804 extends the will lapse provisions to trusts. This
includes revocation.
x. MO and UPC hold that divorce revokes a trust, including for
relatives of the ex-spouse.
e. Planning for incapacity
i. Durable power of attorney person has power to act for the
principal and make decisions on property. Different from trust
relationship because trustee holds title when acting, and the agent
here does not have title. This kind of authority lasts even when
person becomes incapacitated.
ii. 404.700 404.735: MO law recognizing durable power of
attorney.
1. Durable power must be denominated as such with express
terms of durability 404.705(1)
2. general power is assumed unless principal narrows the
power 404.710(2)
3. MO requires the power of attorney must specifically allow
the attorney to change the trust.
4. 404.710(7) durable power of attorney may not change a
persons will. Other prohibitions are contained in this
section.
iii. Health care issues
1. states can require clear and convincing evidence be shown
if medical service should be terminated when someone is
incompetent
2. MO living will statute: 459.010-459.055
a. Must have a writing, signed by declarant, dated, in
declarants handwriting or signed by at least 2
witnesses
b. 459.015(3) declaration.
i. If patient is terminal, death not prolonged by
death-prolonging procedures.
1. death prolonging procedures are
those that would serve only to
prolong artificially the dying process
and where, in the judgment of the
attending physician pursuant to usual
and customary medial standards,
death will occur in a short time
ii. If terminal and unable to participate in
decision, physician should withhold or
withdraw medical procedures that merely
prolong dying and are not necessary to
comfort or alleviate pain
iii. No intent to authorize affirmative or
deliberate acts or omissions to shortened life

c. 459.025 living will is operative only if patient

terminal and unable to make treatment decisions.
Never operative for pregnant women.
d. 459.020 revocation may be made at any time
and in any manner in which patient declares her
intent to revoke.
e. 404.710 alternative to living will is durable
power of attorney for health care but you have to
expressly say person can make health care
decisions.
3. Durable power of attorney for health care 404.800
404.865
a. Formalities are same as for any durable power of
attorney
b. No special statutory form
c. Agent is required to seek and consider info
concerning the patients medical diagnosis, the
patients prognosis, and the benefits and burdens of
treatment to the patient. Cannot authorize the
withdrawal of natural nutrition and hydration. If
want surrogate to be able to refuse feeding tube,
have to explicitly state that in document.
d. 404.825 agency authority kicks in when 2
physicians certify that patient is incapacitated unless
there is some other method stated by patient.
Authority ceases when patient is no loner
incapacitated.
e. 404.850 can be revoked at any time and in any
manner by which patient is able to communicate
intent to revoke.
VIII. Trusts: Creation, Types, and Characteristics
a. Introduction
i. Trust fiduciary relationship with respect to property
ii. Parties to a trust: settlor (person who creates trust), trustee (person
who owns legal title, manages property), beneficiary (hold
equitable title and enjoy property as trust allows).
iii. Separates management of property from its enjoyment
iv. Facilitates division of property ownership among different
concurrent or successive owners
v. Collateral benefits avoid probate, tax issues
b. Creation of a Trust
i. Elements necessary to create a valid trust
1. settlors capacity capacity to give property
2. Intent to create a trust
a. Precatory language does not create a trust
b. Future intent does not create a trust

ii.

iii.
iv.
v.

3. trustee
a. if settlor fails to name a trustee the court will
appoint one. A trust will not fail because there is no
trustee.
b. Trustee has to be competent to manage property and
owes a fiduciary duty to beneficiaries.
c. Trustee has to have duties or it is passive and the
trust fails.
4. trust property
a. some property has to be placed by settlor into the
trust. If trust property is exhausted the trust fails.
b. Any interest in property that can be transferred can
create a trust.
5. at least one beneficiary
a. any human being can be a beneficiary
b. no capacity requirement
c. settlor or trustee can be beneficiary as long as there
is another one
d. S has to name beneficiary in some clear way so that
their identity is ascertainable in some way and the
size cannot be too large
e. Clark case friends is too broad a phrase to
create a valid trust.
6. compliance with statute of frauds trusts of real property
have to be evidenced by written instrument
7. valid purpose purpose cannot be illegal or against public
policy
8. has to be in compliance with the rule against perpetuities
Jimenez case do not necessarily have to execute documents or
use the word trust. If act like there is a trust a duty owes. Court
will find intent to create a trust if the title is split and it enforces
fiduciary duties on the owner of the legal title in relation to the
holder of equitable title.
If there is no split in the title, the interests merge and there is either
no trust created or the trust ends.
Trusts can be created by a declaration of trust, testamentary trust,
or deliver property to trustee in trust. Must have delivery to
complete the creation.
Powers of Appointment
1. this is the authority to designate recipients of beneficial
interests in property
2. Can be a general or specific power.
3. General power has no restrictions on who is appointed
4. specific power would limit class of persons who can be
appointed

5. these powers are optional and discretionary so they have to

be specifically created
vi. Honorary trusts
1. Searights Estate left trust to dog, but court finds an
honorary trust which is a gift to benefit a non-human, is not
charitable, and is binding only on the conscience of the
trustee.
2. MO 456.055 recognizes honorary trust for pets and limits
them to 21 years.
vii. Resulting trusts
1. when try to create an express trust and it fails, a trust may
be implied from the circumstances.
viii. Types of trusts
1. mandatory: Trustee has to distribute the trust property. Ex:
To T in trust to distribute all the income to A.
2. Discretionary: Trustee has discretion to distribute and
discretion will vary according to the trust document. Ex:
to T in trust to distribute so much of the income to A as T,
in her sole discretion, so chooses.
3. Support: trustee distributes only enough income to support
the beneficiary. Trustee often has discretion. Ex: To T in
trust to distribute as much of the income to A as necessary
for As education and support.
4. Spendthrift: Key is inability of A to get rid of or encumber
his interest. Ex: To T in trust to distribute to A for life, but
A is restrained from voluntarily or involuntarily alienating
As interest or from anticipating As interest.
c. Discretionary Trusts
i. Default rules
1. generally law will not allow the trustee to invade the corpus
unless there is an express or at least an implied power to do
so in the trust document
2. trustee is supposed to maintain A according to his station in
life
3. courts do not require the trustee to take into account As
other resources
4. courts will typically limit the trustees discretion by
requiring good faith and reasonableness
ii. Uniform Trust Code 1008 a term of a trust relieving trustee of
liability for breach of trust is unenforceable if it relieves the trustee
of liability of trust committed in bad faith OR if it was inserted as
the result by the trustee of a fiduciary or confidential relationship
with settlor
iii. Burden of proof is on trustee to prove that exculpatory clause was
freely bargained and it was fair.
d. Creditors Rights: Spendthrift Trusts

Income

Principal

i. Beneficiary is barred from alienating his interests and creditors

cannot reach the interest in the trust until it is paid to the
beneficiary.
ii. These are a good idea if settlor wants some sort of control over
property and want to limit beneficiary.
iii. These might be a bad idea because it lets people avoid
responsibility. Also allows a vehicle to keep more wealth in the
family to the exclusion of legitimate creditors.
iv. Alimony and child support are exceptions
Child Support
Alimony
Children can reach income
Should be able to claim
of trust because he has
against the income because
obligation to support them
he still has a duty to support
until they are old enough to ex-spouse. Split of
support themselves. Dont
authority here, but Shelley
want them to have to be
court allows support.
public wards.
Children can reach principal Alimony claim cannot reach
because they are named in
principal because
the trust document. Can
beneficiary has no
only do it if not enough
realizable interest in it until
income and circumstances
the income is distributed to
are extraordinary.
him at discretion of trustee.
v. MO 456.080(2) settlor may provide in terms of the trust that
the interest of a beneficiary may not be either voluntarily or
involuntarily transferred before payment or delivery of interest
vi. Exceptions to spend thrift trusts
1. self-settled trusts settlor cant set up trust for himself to
hide assets
a. Assets of the individual or someone who can act on
behalf of the individual are used to form all or part
of the trust
b. If it is revocable by the individual it is considered
resources for the individual
c. If it is irrevocable then any income or principal to
which individual is entitled to have are considered
resources for support.
i. Exception: discretionary trust created by
will of spouse or a trust established from Bs
property by a parent, etc. that provides for
reimbursement of state from remainder of
trust at time of Bs death
2. alimony or child support
3. necessary services for support want to encourage people
to provide necessaries without fear of not getting paid
4. US or a state for taxes

5. tort creditors
e. Modification and Termination of Trusts
i. General rule is that if settlor and all beneficiaries consent then the
trust can be terminated or modified.
ii. Stuchell case court said could modify trust but if it is only to
benefit the beneficiaries then the court will not allow it. Has to be
a change in circumstance that would affect the settlors purpose in
order to change. Some courts would allow change to benefit
beneficiaries.
iii. Termination refers to bringing an end to a trust. Can be done by
1. property being exhausted
2. settlors instructions are completed
3. revocation by settlor
iv. Claflin rule: trust may not be terminated early, even if all
beneficiaries consent if trust still has a material purpose left.
v. Types of material purposes: age limitations, support and
spendthrift trusts, education
vi. In states that dont follow the Claflin rule if all the beneficiaries
agree then the trust can be terminated regardless of if there is a
material purpose.
vii. 456.590(2) all adult beneficiaries consent and benefit to
disable, minors, unborn, and unascertained beneficiaries then the
court may modify or terminate even if there is a material purpose.
viii. Merger
1. When legal and equitable title vest in one person there is
merger.
2. Some courts do not allow trusts to terminate because of
merger is some material purpose exists. They will just
replace a trustee so the material purpose can still be carried
out.
ix. Changing trustees
1. Ordinarily beneficiaries cannot remove trustee and ask for
new one. If trustee breaches a fiduciary duty then can
remove.
2. Uniform Trust Code 706 allows court to remove trustee if
the trustee
a. Breaches the trust
b. Doesnt cooperate and substantially impairs the
trust
c. Doesnt administer the trust effectively so the court
decides this is in the best interests of the
beneficiaries
d. There has been a substantial change of
circumstances

IX.

X.

e. Removal is requested by all beneficiaries and the

court finds that serves their best interest and is not
inconsistent with the material purpose of trust
Duration of Trusts: Rule against Perpetuities
a. Introduction
i. This rule doesnt actually prevent trust from existing in perpetuity.
ii. This rule does not apply to charitable trusts.
iii. Rule: no interest in real or personal property is good unless it must
vest, if at all, not later than 21 years after some life in being at the
creation of the interest.
iv. Another way to say this: a contingent future interest is void from
the outset if it is not certain the interest will either vest or fail
within 21 years after the death of some life in being at the creation
of the interest.
v. Examples:
1. O transfers a fund in trust to pay the income to A for life,
then to As children for their lives, then to pay the principal
to B. A has no children. Question is whether any of these
interests violate the rule against perpetuities? As interest:
vests immediately so it is within 21 years of all living. As
childrens interest: vests when A dies. As children will
either take or the gift will fail so it is within 21 years of As
death. Bs interest: vests immediately even though B may
not take the property within 21 years of the creation of the
interest. This does not violate the rule though because it
only matters when the interest vests.
2. To A for life, then to B if any person goes to the planet
Saturn. As interest still vests immediately. This violates
the rule though because this can go on far past the 21 years
after Bs death before we may determine if it fails.
3. To A if it rains in Seattle. This is invalid because the point
is if there is a possible way for it to fail, then it fails, even
though the likelihood of the event is huge.
vi. Modern developments
1. limited to private trusts
2. wait-and-see approach has been adopted by some states
rather than trying to make some prediction. Issue is how
long to wait to see if event happens
3. lengthened time period has been adopted in other states to
give more freedom to preserve gifts
4. some states have abolished the doctrine altogether
5. savings clause: if a court finds that this trust violates the
rule against perpetuities the remaining trust property shall
be distributed to X
Charitable Trusts
a. Nature of Charitable Purposes

XI.

i. Not established for an identifiable beneficiary but instead for the

community or some identifiable section of it. Not subject to the
rule against perpetuities
ii. Charitable purposes
1. relief of poverty
2. advancement of religion
3. advancement of education
4. promotion of health
5. promotion of govt/municipal purposes
6. benefit to community (catch-all)
iii. Benefit needs to be tied to the charitable purpose. Mere financial
enrichment does not work.
iv. MO 456.055 allows a trust to be carried out for 21 years although
it has no ascertainable human beneficiary or might last longer than
the period of the rule against perpetuities.
v. If the provision that is beneficial is irrational then it is not
charitable, but this is narrowly interpreted.
vi. Illegal purposes do not establish valid trusts
vii. Cant perpetually endow a political party, but can promote some
change in the law.
b. Modification of Charitable Trusts: Cy Pres
i. When a charitable purpose becomes impossible to fulfill or there is
money leftover, the doctrine of cy pres allows the court to vary the
dispositive terms of the trust to prevent its failure.
ii. When charitable purpose is illegal, impossible to fulfill,
impracticable, or has already been fulfilled this can be done.
iii. Courts favor charitable trusts and the longer it has been in
existence the more likely they are to try to keep it going doctrine
of equitable approximation.
iv. If court does not apply cy pres the trust will fail and will likely
pass back to the family.
Trust Administration: The Fiduciary Obligation
a. Duties to the Trustee
i. Duty of loyalty trustee has a duty to act for and only for the
interest of the trust and the beneficiaries and not for his own self
interest.
1. Must act in best interests of the estate, trust, etc.
2. must avoid situations or transactions where could profit
from fiduciary position
3. must avoid situations or transactions where personal and
fiduciary interests conflict
4. must not enter into transactions for less than fair market
value
ii. Trustee cant self deal or profit from his fiduciary position.
1. Defenses to self-dealing
a. Settlor authorized self-dealing

iii.

iv.

v.

vi.
vii.

viii.

b. Beneficiaries consent after full disclosure and

transaction is fair and reasonable
c. Further inquiry rule: good faith and objective
fairness are not defenses
d. Court can also authorize the transaction under the
right circumstances
Co-trustees
1. must act as a group
2. decisions must be unanimous
3. a single co-trustee does not have power to deal with the
trust corpus alone
4. co-trustee is liable for wrongful acts of another co-trustee if
consented or allowed to commit
a. Exceptions
i. Trust instrument provides to the contrary
ii. Ministerial functions
iii. Charitable trusts
iv. Statute (MO 456.540 allows trustees to act
by majority vote)
1. Even if majority vote still have to
dissent if dont want to be liable.
Care of Trust Property
1. duty to collect and protect (obtain it, examine it, and
preserve it by insuring it, etc.)
2. duty to earmark trust property. Have to keep trust property
separate from own property
3. duty to not commingle. Older view was if commingled
funds liable for loss regardless. Recent view is only liable
to extent commingling caused the loss.
Duty not to delegate. Trustee must use reasonable care in making
her decisions. Restatement Third of Trusts changes the nondelegation rule to allowing delegation if a prudent person might
delegate those responsibilities to others.
Duty of impartiality trustee is required to treat each beneficiary
impartially.
Trustee has duty to sell underproductive property to reinvest the
proceeds. Cant deplete the capital value of the property to
unfairly maintain payments to income beneficiaries.
1. Uni-trust. Approach is to view trust assets as a whole
instead of as income to beneficiaries and corpus to
remainderman. Set up so that distributions to income B is a
percentage of the total trust so it smoothes out the
fluctuations in value.
Duty to inform and account to beneficiaries

1. Trustee has a duty to keep accurate records of transactions,

render an accounting, and keep beneficiaries informed of
the trust.
b. Powers of the Trustee
i. At common law no inherent powers
ii. Implied as necessary to carry out trust purposes
iii. Statutes
1. authorize S to incorporate statutory powers by reference
2. Grant T a set of basic powers
3. Empowers T to act as a prudent person
c. Investment of the Trust Funds
i. Power to invest: prudent investor standard
1. Trustee will not be liable if trust assets fail unless his
actions fall under the standard of care.
2. Most states use the reasonably prudent person dealing with
anothers property standard.
ii. Duty to diversity court is more focused on whole portfolio
instead of asset to asset.
d. Liability of Trustee to Third Parties
i. Third persons who deal with T
1. Common law: requires inquiry into propriety of transaction
2. UTPA: existence of trust powers and their proper exercise
may be assumed without inquiry
ii. Liability of T in contract or tort
1. Traditional rule: T is personally liable
2. If contract valid on behalf of trust or T not personally at
fault in tort T entitled to indemnification by the trust
3. Many states: statutes reversing personal liability of Ts.
Allow pl to sue T in capacity as trustee and get paid
directly from the trust assets.
4. UPC 7-306 if sue in trustee capacity, can pay out of
trust and then out of trustees own assets. MO has similar
provision.