Wills Estates & Trusts

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  1. NC Standards for a Valid Will
    Basic Requirements for a North Carolina Last Will and Testament: 

    A will must be in writing to be valid. 

    • Signature: Signed by the testator with testamentary intent to sign, or by another person under the testator's direction and conscious presence. 
    • Signature need not be at the end of the will!

    • Witnesses: After witnessing the testator sign the will, OR after the testator's acknowledges to witnesses that is his signature. The witnesses must sign in the presence of the testator but need not to be in the presence of each other. Witnesses Don't have to know they are signing a will!
    • NC uses Line of Sight Test

    Interested witness share will be voided.

    Beneficiaries: A will may make a disposition of property to any person.Age: The testator must be at least 18 years of age. Capacity: The testator must be of sound (capable of reasoning and making decisions) mind.
  2. Who can Contest Will?
    • Challenger must have standing to contest
    • - Pecuniary interest
    • - other interest

    • Must be challenged on sufficient grounds
    • - testator's mental capacity
    • - effect of 3rd parties on testator (undue influence)
  3. Requirements for a Self-Proving Will in NC
    • A Will with:
    • - testamentary intent
    • - 2 witnesses
    • - & notary 
    • can be admitted to probate without an affidavit
  4. NC Standards for Execution of a Will
    • There are four main requirements to the formation of a valid will:
    • The will must have been executed with testamentary intent;
    • The testator must have had testamentary capacity:
    • The will must have been executed free of fraud, duress, undue influence or mistake; and
    • The will must have been duly executed through a proper ceremony.
  5. Testamentary Intent
    Testamentary intent involves the testator having subjectively intended that the document in question constitute his or her will at the time it was executed. Ordinarily, the opening recital, e.g., I, Jane Doe, do hereby declare this instrument to be my Last Will and Testament . . .” will suffice.
  6. Holographic Will
    Under certain requirements provided by North Carolina laws, a handwritten will may be recognized. However, the legal requirements for a handwritten will are specific and need to be strictly followed in order to deem the will valid.
  7. Nuncupative Wills
    In certain circumstances (e.g. in the last sickness), an oral will that disposes of personal property may be valid under North Carolina laws. However, the legal requirements for an oral will must be strictly followed in order to deem the will valid.
  8. in re: A v. B
    Conflict of Interest

    • 1.     Lawyer shall explain matter to extent
    • reasonably necessary to permit client to make informed decisions regarding the
    • representation.

    • 2.     Model Rule 1.6 doesn’t except info
    • relating to commission of fraudulent act or that relating to client’s act that
    • is likely to result in substantial financial injury.

    • 3.     Lawyer’s disclosure of confidential
    • info communicated by 1 spouse is appropriate only if other spouse’s failure to
    • learn of info would be materially detrimental to that other spouse or frustrate
    • intended testamentary arrangement.
  9. Inheritance by Non-marital Children
    - All states permit inheritance through Mother
  10. Slayer Rule
    • Any person that is found guilty of an Intentional and unlawful killing, that person shall be deemed to have predeceased the decedent for purposes of inheritance
    • and intestate succession.  (INCLUDES VOLUNTARY MANSLAUGHTER & CAN INCLUDE ASSISTED SUICIDES)  This is a civil issue so acquittal on criminal charges is not the final word!!!  BOP is on the party trying to invoke the slayer rule!

    If the slayer would have taken via intestacy, distribution per stripes

    If slayer has no issue, the property shall be distributed as though the slayer predeceases the decedent.

    • If killer & victim had joint tenancy, it is converted to tenancy in common and killer keep his interest but the victims interest is distributed as if the killer predeceased.

    Exception:  parties found guilty by reason of insanity
  11. Disclaimer
    • To disclaim,
    • 1) the party must meet both
    • - state requirements (31 b)
    • - Federal Statute Requirements (IRC 25-18)

    2) Disclaimer Must be Timely

    3) Minors: disclaiming period begins at age of majority

    • Consequences of Disclaimer
    • Only “DISCLAIMED” Property is deemed to pass from the decedent to the alternate taker (as if the disclaiming party has
    • predeceased the donor)

    ****KEEP IN MIND THAT FOR PURPOSES OF PER CAPITA, The disclaiming party is still considered a living party****
  12. Effect of Improper Disclaimer
    • - If the party does not disclaim within the
    • allotted time period, it is considered to be inherited by the “disclaiming”
    • party and then gifting it to the next taker

    -Also creditors would be allowed to make claims against the property in this instance
  13. Testamentary Capacity TEST
    • As guidance, The Cunningham test is often used. 
    • Mental capacity to make a will requires that:
    • (1) the testator understands the nature of her
    • act;
    • (2) she knows the extent of her property;
    • (3) she understands the proposed testamentary disposition;
    • (4) she knows the natural objects of her bounty; and
    • (5) the will represents her wishes.

    The Testator must have both testamentary intent, and testamentary capacity, at the time the will is executed.

    Generally, it takes less capacity to make a will than to get married or transfer real property

    • Evidence that a testator is eccentric, aged, and acts irrationally at
    • times, by itself, does not establish that testator lacked testamentary capacity
    • to make decided, rational disposition of property.
    • Definition: An insane delusion is ‘a persistent
    • belief in that which has no existence in fact, and which is adhered to against
    • all evidence.’

    • Test: Before a will can be invalidated because
    • of a lack of testamentary capacity due to an insane delusion, the insane delusion must materially affect the disposition in the will.
    The key is that the mark must be intended to be the testator’s signature and is made willingly by the testator. Even if the testator needs assistance in signing his name due to some infirmity, it still meets the signature requirement, as long as the testator desired and intended to sign the instrument. See, e.g., In re Will of Bernatowicz, 233 A.D.2d 838 (1996).

    Additionally, proxy signatures (made by another person) are acceptable, as long as the signing is at the testator’s direction and in his or her presence(TESTATOR MUST BE CONSCIOUS).

    In most states, there is no requirement that the testator sign at the end of the will (subscribe his signature). The signature can appear anywhere, provided it was intended by the testator to be his signature.
  16. FRAUD
    - definition
    - elements
    - remedy
    When the testator is deceived by a deliberate misrepresentation and does that which he would not have done had the misrepresentation not been made. 

    • elements: 
    • 1) False statements of material facts,
    • 2) Known to be false by the party making the statements,
    • 3) Made with the intention of deceiving the testator,
    • 4) Who is actually deceived, and
    • That cause the testator to act in reliance on the false statements.

    • Remedy : Provision in the will is invalid
    • Remaining portions of the will stand unless the fraud permeates the entire will or portions invalidated by fraud are inseparable from the rest of the will.
    • Court can impose a constructive trust or follow intestate succession.
  17. Fraud Types
    Fraud in the execution involves the testator being deceived as to the character or contents of the document he is signing.

    Fraud in the inducement involves the testator making the will or writing a provision that relies upon a false representation of a material fact made to him by one who knows it to be false.
  18. Undue Influence

    - Effect of Undue Influence
    Undue influence involves substituting another person’s will for that of the testator.

    • The factors of undue influence are:
    • - a susceptible testator;
    • - another’s opportunity to influence the testator;
    • - improper influence in fact; and 
    • - the result showing the effect of such influence.

    • If the contestant can establish
    • 1) confidential relationship
    • 2) suspicious circumstances 
    • Then burden shifts to proponent that T acted in freely and in good faith

    Undue influence is difficult to prove because the evidence must be substantial, going beyond mere suggestion, innuendo or suspicion.

    Merely having a motive, the opportunity or even the ability to exert undue influence is not sufficient to prove it actually happened.

    • Effect of Undue Influence
    • If the elimination of a provision created under undue influence does not defeat the overall testamentary plan, it can be stricken; the rest of the will is still valid.
    •  In contrast, if this revision alters the testator’s wishes for the disposition of his property, the entire will is set aside.

    Yet, the existence of a confidential relationship between a testator and a beneficiary may raise a presumption (often rebuttable) of undue influence, especially if the beneficiary played an active role in procuring the will and the disposition under the will is “unnatural.”
  19. NC Standard for Revocation of Will
    • A North Carolina will and testament or a part of a will and testament can be revoked:
    • 1) By subsequent written will or codicil or other revocatory writing constructed in the same legal manner as a written will or

    2) By being burnt, torn, canceled, obliterated, or destroyed, with the intent and for the purpose of revoking it, by the testator himself or by another person in his presence and by his direction.
  20. Reviving a Revoked Will
    • - requires the T to re-execute will or to incorporate by reference into a valid new will.
    • - Can do a new signature page (republication by codicil) or write a new will

    • Majority Approach:
    • - To revive, testator must intend to revive
    • - prove intent by looking at how the T revoked will #2 (look at ACTS: T's statements OR WRITING: T's writing
  21. Codicil
    - Define
    - Execution formalities?
    - How are Codicil's used?
    • Define: 
    • - a later testamentary instrument that alters, amends, or modifies a previously executed will.

    • Formalities: 
    • Must be executed with the same testamentary formalities of a will.
    • - signatures
    • - witnesses

    • Codicils used to:
    • - republish a validly executed will
    • - Be a stand alone will (if the underlying will is invalid)
    • - Can cure a will that is invalid because of a problem with the execution of ceremony in some jdx
  22. Spouse's Elective Share
    If a spouse is excluded from the will, the surviving spouse may take a portion (an "elective share") of the estate within a certain period of time as allowed by North Carolina laws.
  23. Codicil
    - Republish a validly executed will
    a will is treated as having been executed on the date of the last validly executed codicil

    This is express by clause or implicit by absence of clause

    • Will not republish will if successfully argued that republishing would
    • -frustrate the T's apparent wishes
    • - can only be argued in the absence of express language in the codicil requesting republication
  24. Codicil
    - Be a stand alone will
    • - if the underlying will is not valid
    • - as a will, it does not automatically re-execute the invalid will, but it may still be possible to use the invalid will to give effect to the testamentary wishes expressed in the invalid will through incorp. by reference

    EXCEPTION: a handful of jdx do not recognize incorp. by reference....  In these states they stretch republication by codicil to rexecute and republish an invalid underlying will, but only if the invalid will went through a valid execution ceremony but is invalid for some other reason.
  25. Cure a will that is Invalid due to problem w/ execution
    • - problems w/ original will ceremony that do not affect validity in whole (interested witness or undue influence in part)
    • - These problems may be cured by republication doctrine 
    • - as long as the problem is not present when the codicil is executed, the codicils execution is deemed to re-execute and republish the underlying will, thereby curing the problem
  26. Holographic Will
    • - Entirely in testator's handwriting
    • - No attesting witnesses

    • Must be:
    • -In testator's handwriting
    •    - Some require the entire doc in testator's           handwriting
    •    - Most only require that the material provision be in the T's handwriting

    • - signed by testator (anything he intends as his signature)
    • - Most states do not require these to be signed... NC Says name written in the will is sufficient
    • & need 3 witnesses to testify that it is decedent's handwriting
    • & 1 witness to testify that the will was found among the testator's important papers.

    - cannot direct another to sign on testator's behalf


    UPC will allow both handwriting, printed words & extrinsic evidence to be considered when establishing testamentary intent
  27. Illegitimate Children
    • UPC:
    • Mother: always recognized & able to inherit 
    • Father: Must establish parent/child relationship existed between child & father

    • NC:
    • Mother:always recognized & able to inherit 
    • Father:  Child can Only inherit from father:

    • - if child has court order proclaiming him to be the father (child support, custody)
    • - father lacknowledged himself during lifetime & child's lifetime to be the father & deemed in written instrument before a certifying officer and filed during lifetime of both w/ clerk of superior court where child/father resides.
    • - Or Legitimizes 
    • - FF&C from another Jdx that father
    • - mother marries reputed father
    • - present C&C that father IS the father
  28. LAPSE
    • - All jdx require that anyone taking from a decedent must survive the decedent.
    • - T can opt out of the survival requirement and permit the beneficiary to take even if he predeceases the Testator.

    • - NC must survive Testator by 120 hours
    • - UPC: must survive by a millisecond by C&C evidence

    • If beneficiary fails to survive the testator:
    • - gift lapses... lapsed gift fails

    • If beneficiary was dead BEFORE the will was created:
    • - gift is void
    • - treated the same as a lapsed gift

    Specific gifts -> fall to residuary clause, otherwise to intestacy

    General Gifts -> fall to residuary clause, otherwise to intestacy

    • Class Gifts -> the surviving members divide the gift
    • Majority applies anti-lapse statues (so gift goes to issue of deceased beneficiary / if beneficiary was dead at the time will is executed, many states do not apply anti-lapse statute)

    - Residuary Gifts --> if complete residuary gift fails, residue of estate goes by intestacy

    • - if only partial residuary failure:
    •    - Common Law: Intestacy
    •    - UPC/Majority: It is assumed that the testator prefers to avoid intestacy... therefore as long as any part of the residuary clause is valid, it catches the failed residuary clause.
  29. Anti-Lapse Statute
    - common law
    - Modern / UPC
    Common Law: can't save a failed gift -> goes by intestacy

    • Modern/UPC: Can apply anti lapse to void/lapsed gifts in the following cases:
    • 1- beneficiary disclaims interest
    • 2- if will has an express survival requirement that the beneficiary fails to meet
    • 3- if the beneficiary fails to qualify because he feloniously & intentionally killed the T.
  30. Anti-Lapse Statute Qualifications
    • - lapse
    • - the predeceased beneficiary meets statutory degree of relationship to T; (must be Grandparent or lineal descendent of GP to qualify... 2nd parentelic)
    • - pre-deceased beneficiary has issue that survived the testator (in NC 120 hours)
    • - Lapsed gift goes to issue of predeceased beneficiary 
    • - UNLESS the will expresses contrary intent (express words of survival / express gift-over to another beneficiary in the event of the first beneficiary's death) followed by Majority/NC/Low-threshold
  31. Mistake in The Will
    - General Rule
    - Modern Trend
    • General Rule: NC FOLLOWS / Majority Rule
    • - Will is invalid as the testator signed the wrong doc.  
    • - Strict Compliance
    • - Although intent can be discerned, testator did not intend the doc to be will
    • Modern Trend:
    • - Court are more concerned with testator's intent & less concerned w/ wills act formalities
    • - Under UPC Harmless error or substantial compliance this would be OK

    • - Substantial Compliance: MUST SHOW BY C&C evidence that
    •   1) T intended doc to constitute last will and testament AND
    •   2) show that the will substantially complies w/ the statutory Wills Act formalities.

    • Doctrine of Harmless Error:
    • Ct may excuse noncompliance w/ statutory formalities.
    • 1) MUST SHOW BY C&C evidence that D intended the doc to be his will.
  32. Trusts In general
    An arrangement by which a trustee manages property in a fiduciary capacity for 1 or more beneficiaries.

    Trustee CAN be a beneficiary of the trust, but cannot be the sole trustee & sole beneficiary (because then the trustee owes no duties to anyone but himself)
  33. Revocable Inter Vivos Trust
    - Majority Approach
    • - person may challenge a revocable trust but only after the trust becomes irrevocable by reason of settlor's death.
    • - during life of settlor, the presumed beneficiary has not interest... so no standing (beneficiary has, at most, a contingent remainder that has not vested)
    • - created by will
    • - always IRRevocable
    • - a will that contains an express clause giving some/all T's probate property to trustee of T's inter vivos trust, to hold & distribute pursuant to terms of trust.
    • - not executed w/ Wills Act Formalities
  35. Incorporation by Reference
    A Will can incorporate & give effect to provisions of a document not executed by Wills act formalities as long as:

    • - Doc was in existence at the time the will was executed.
    • - the will expresses intent to incorporate the doc.
    • - Describes the doc w/ reasonable certainty
    • -
  36. Revocability of Trust
    - Majority Rule: Inter vivos trusts are presumed to be irrevocable unless the terms of the trust expressly state that the trust is revocable

    - if the trust sets forth an express, particular method of revocation, only that method is valid

    • - Can revoke by an intent manifested by:
    •    - writing
    •    - Act: destructive act coupled w/ intent
    •    - Presumption
    •    - Orally (unless real property is involved)

    If no method listed, later will or codicil that refers to property that would have passed according to terms of trust OR any other method that manifests C&C evidence of settlor's intent.

    In many jdx, an inter vivos revocable trust is not revoked by Divorce.
  37. Acts of Independent Significance
    Where a will can reference an act outside of the will and act can control either who takes or how much they take, as long as the referenced act has its own significance apart from its effect upon the disposition on the d's property
  38. Abatement
  39. Ademption
  40. Creditor's claims on Trusts
    Common Law: Creditors of a settlor of a revocable trust could not reach the power or force the settlor to exercise the power in their favor to take $ out of trust.

    Modern: Creditors of settlor can reach the trust property to the full extent the trustee could have used the property in the trust for the settlor's benefit

    • NC: to the extent that settlor had the right of use and benefit from assets during his lifetime, his creditors should have a right to reach those assets following death.
    • If settlor retained power to revoke the entire trust, all of the trust assets are subject to claims of creditors.
    • - most jdx that have adopted this require that the creditors exhaust the settlor's probate assets before being able to reach the settlor's trust assets
  41. Parental Bars to Inheritance from child
    a parent is prohibited from Inheritance if the parental rights of the parent could have been terminated under state law for nonsupport, abandonment, abuse or neglect.

    NC: parent will lose all right to intestate succession and all rights to administer estate if parent willfully abandons the care & maintenance of their child.

    • Exception: when the abandoning parent resumed the care & maintenance at least 1 year prior to death of child and continued the same until death.
    • A parent has been deprived of the custody of child under court order and parent has substantially complied with all orders of the court requiring contribution/support of the child
  42. Ademption of Specific Gifts: NC Approach
    • - If the gift is not found, the gift is adeemed and the court will not take extrinsic evidence as to why the item cannot be found.
    • - Testator's intent is not relevant
    • - where testator makes a specific gift, and the item is transferred, a rebuttable presumption arises that the T intended to revoke the gift.
    • DOesn't matter if the transfer was voluntary or involuntary.

    **if any part of the specific gift remains in the T's estate, the beneficiary is entitled to receive whatever is left***
  43. Abatement: NC Approach
    • - based on T's presumed intent
    • - Property not disposed of by he will
    • - The residuary clause is reduced first
    • - Then General Gifts
    • - Then specific gifts (includes demonstrative gifts)
    • - The more precise nature of the gift, the more important it must have been to the testator.
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Wills Estates & Trusts
2013-12-12 14:45:10
Wills Estates Trusts
Wills Estates and Trusts - Part 2
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