Wills, Estates, and Trusts Outline

Professor Mather – LW7427A

I.
Freedom of Disposition
A. Freedom of disposition - the dominant principle of trusts and estates law which advocates that the
law should grant people the freedom to dispose of their property in any way they want once they pass
away
B. American succession law embraces the freedom of disposition
C. But the freedom of disposition is not absolute
a. The law protects a donor’s spouse and creditors, allows for the impositions of transfer taxes
and gift taxes, and imposes a handful of anti-dead hand policy constraints
i. One such example is the Rule Against Perpetuities
D. Dead-hand control – dead-hand control refers to individuals controlling how their property will be
used after their death through different mechanisms (especially the use of executory interests that vest
at some indefinite and remote time in the future to restrict alienability and to ensure that the property
remains in the hands of a particular family or organization)
a. It is often heavily influenced by the decedent’s wealth
E. Dispositions that concern public policy
a. Conditional bequests may implicate public policy
i. See Shapira – related to the fundamental right to marry; the decedent placed a
condition on the bequest of his property that his son marry a Jewish woman within
seven years; the motive of the decedent is an important factor
b. Today, conditional bequeaths are more often found in incentive trusts (CONTRAST)
i. Provided the incentives do not violate public policy, courts will likely enforce them
ii. Examples that may be permitted:
1. Condition to be married
2. Condition that the devisee abstain from smoking (but hard to monitor)
iii. Examples likely to be stricken:
1. Devisee get a divorce
2. Devisee have a certain number of children
F. Constitutional right to pass property at death
a. Hodel v. Irving – a constitutional right to pass property at death exists
i. The Court struck the Indian Land Consolidation Act because it forbade individuals
from passing property
G. Posthumous property – does the decedent (or rather, their estate) retain a right to property acquired
after the decedent’s death?
a. Often comes up in “likeness” cases
i. See Shaw v. CMG Worldwide – while state laws would later recognize rights to
publicity after death, that right did not exist at the time of Marilyn Monroe’s death
II.
Evolution of Estate Planning
A. Historically, people worried about passing property when they died
B. Over the last century, there was a shift:

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 a. Property or wealth passes to heirs during the would-be decedent’s lifetime
b. People live longer, so they need money for their old age
i. Example: When Social Security was established in 1935, the life expectancy for
an average American was about 60 for men and 64 for women; it is now ~80
C. As the overall population gets older, estate planning has new meaning
D. People now save their money
E. This change is attributed to the movement from rural farming communities to urban environments
III.
Probate Property and Terminology
A. Property that passes under a decedent’s will or by intestacy is said to be probate property
B. Probate terminology
a. Will
i. Testate – having made a valid will before one dies
ii. Executor(trix) – if the decedent names the person to execute the will
iii. Letters testamentary – a document issued by the court or public official
authorizing the executor of a will to take control of a deceased person’s estate
iv. Devise or devisee - when the testator passes real property (historical term)
v. Bequest to a legatee – when the testator passes personal property (historical
terms)
b. Without a will
i. Intestate – not having made a will before one dies
ii. Personal representative – appointed by the court to administer the estate
iii. Letters of administration – the document the court issues to name the personal
representative
1. In addition to intestate estates, the court may name a personal
representative if the executor is unwilling or unable to carry out the will
iv. Descend to heirs – how real property passes in an intestate estate
v. Distributed to next of kin – how personal property passes in an intestate estate
vi. Heirs – a person’s heirs are not identifiable until the person’s death
1. The person who would inherit the property of A under intestacy, a living
person, is said to be the heir apparent
C. Probate function
a. During probate, collect and identify the decedents’ assets
b. The personal representative will:
i. Gather assets and take inventory;
ii. Pay creditors, debts, and claims
1. If they are secured creditors, certain rights will apply
iii. Distribute property to those intended after the creditors are paid
D. Types of probate
a. Formal probate – an estate must be opened by filing a petition for a hearing before the
probate court and court may have continued involvement in the case
b. Informal probate (independent administration) – allows the estate to be probated
through an administrative process without any court involvement and no court hearing
i. This is a cost-effective option when there are no will contests
ii. Texas offers independent administration

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 iii. Should be included in the will that the probate can be informal
1. But can probably still do under independent administration if not
E. Probate jurisdiction
a. The will should be probated in the jurisdiction where the decedent was domiciled at
death
b. If there is ancillary property (usually real), ancillary probate is required; this is the
jurisdiction where the property is located
F. Alternatives to Probate
a. Will substitutes – most people pass their property using will substitutes or property
passes automatically without probate
i. Examples: Joint tenancy; Payable on Death Accounts; Pensions; Stock; Life
Insurance; Trusts; Transfer on Death Deeds
b. Universal succession – the entire estate passes; the heirs or residuary devisees step into
the shoes of the decedent and assume all liabilities
i. Universal succession is common in Europe
ii. The Universal Probate Code permits Universal Succession as an alternative to
probate
c. Family settlements – informal agreements reached by the heirs as to how the estate
should be distributed
d. Affidavit of heirship – an affidavit used to identify the heirs to real property when the
deceased died without a will
e. Will as a muniment of title – a court’s order admitting a will to probate as a muniment
of title is enough legal authority for a person who has custody of estate property to pay or
transfer that property without administration of the applicable asset
i. Can be appropriate when a person dies testate (with a will) and there are no debts
on the estate
G. Will contests
a. A will contest is generally litigation of a will’s validity
i. Technical failure – formalities are not followed, thus the will is invalid
ii. Intent – either testator’s mental state or the effect of third parties on the testator’s
revocation of the will
b. Standing – must have standing to contest a will
i. Generally, you need a pecuniary interest in the decedent’s estate; typically, you
KEY DIFFERENCE
are a beneficiary
FOR STANDING IN
TEXAS ii. Texas – do not need a monetary interest, just have to be an “interested person”
1. Example: a neighbor believes the decedent was being unduly influenced
by another, so they contest the will even if they have no pecuniary
interest
H. Non-claim statutes
a. Every state has a non-claim statute that requires the decedent’s creditors to file claims
within a specified time period
b. Notice-based statute – bars claims if not filed within a relatively short period after
notice is given
c. Self-executing statute – bars claims not filed within a longer period after the decedent’s
death, generally one to five years
i. Most states have self-executing statutes

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I. Bond – usually the personal representative will have to post bond; bond protects the estate from
incompetence, fraud, and other bad acts of the executor
a. This can be and often is waived by the decedent it in the will
J. Digital assets – include social media, email, photos, music, bank accounts and other accounts
a. Personal representatives may access the records but not the content without the
decedent’s express consent
i. Example: can see dates and times of messages but not what is said
b. This protects the privacy of the decedent while allowing access necessary for probate
c. Personal representatives can always access digital assets that are not protected by privacy
laws, like cryptocurrency
IV.
Key Texas Estate Code Sections
A. TEC = TEXAS ESTATE CODE
B. Admission of will to probate
a. Self-proving affidavit – (TEC 251.104) – a self-proving affidavit may be used to prove
the will; the testator and the attesting witnesses may sign the affidavit before the officer
administering the oaths; that officer must affix the official seal to the affidavits
i. Facilitates the probate process
ii. Without an affidavit, you would need the witnesses that were present when the
will was executed to testify (and witnesses may die or forget)
b. Holographs (handwritten) or other non-self-proven wills – (TEC 256.152) – without a
self-proving affidavit, need additional proof for probate of a will; must prove:
i. The testator complied with the formalities and solemnities of the will;
ii. The testator was competent and at the time of executing the will: (1) over 18
years old; (2) previously married; or (3) a member of the armed forces
c. Application for probate – (TEC 256.52) – contents necessary; an application must state
and aver the following to the extent each is known or with reasonable diligence
ascertained: (1) each applicant’s name and domicile; (1-a) the last three number of each
applicant’s driver’s license number and SS number; (2) the testator’s name, domicile, and
if known, age at death; (2-a) the last three numbers of the testator’s driver’s license and
SS; (3) the fact, date, and place of the testator’s death; (4) facts showing that the court
with which the application was filed has venue; (5) that the testator owned property,
including a statement generally describing the property and the property’s probable value;
(6) the date of the will; (7) the name, state of residence, and physical address where
service can be had of the executor named in the will and other person whom the applicant
desires letters be issued; (8) the name of each subscribing witness to the will; (9) whether
one or more children born to adopted by the testator after the testator executed the will
survived the testator and, if so, the name of each of those children; (10) whether a
marriage of the testator was ever dissolved after the will was made, and if so, when and
from whom; (11) whether the state, a govt agency of the state or charitable organization is
named in the will as a devisee; and (12) that the executor named in the will, the applicant,
or another person to whom the applicant desires that letters be issued is not disqualified
by law from accepting the letters.
d. Required Proof for Issuance of Letters – (TEC 301-.151-154) –

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 i. General Proof Requirements (.151): an applicant must prove to the court’s
satisfaction, that:
1. The person whose estate is subject to application is dead;
2. Four years have not elapsed since the date of the decedent’s death and
before the application (outside of exceptions listed in TEC 301.002(b)(1)
and (2));
3. The court have jurisdiction and venue over the estate;
4. Citation has been served and returned in the manner for the period
required; and
5. The person for whom letters testamentary or administration are sought is
entitled by law to the letters and is not disqualified.
ii. Additional Proof for Letters Testamentary (.152): it must Letters testamentary = there
appear to the court that: was a will! And the executor
1. The proof required for probate of the will has been is willing and able to serve!
made;
2. The person to whom the letters are to be granted is
named as executor in the will.
Letters of admin = no PR iii. Additional Proof Required for Letters of Administration
named in the will, no will, or (.153): the applicant must prove to the court’s satisfaction
the PR is incapable or 1. A necessity for an administration of the estate exists
unwilling to serve
iv. Proof required when letters have previously been granted
(.154):
1. An applicant for the granting of subsequent letters must show only that
the person for whom letters are sought are entitled by law to the letters
and is not disqualified
C. Will contest
a. Standing to contest – “interested person;” see above
b. Statute of limitations (TEC 256.204) – a person challenging a will must file their contest
within two years of the application for probate unless:
i. Forgery or fraud within (then within two years of discovery of the forgery or
fraud); or
ii. Incapacitation or minority (then two years within the discovery or age of
majority).
D. Probate Alternatives – AKA PROBATE IS NOT NEEDED
a. Declaration of heirship – (TEC 202.201) – the judgment in a proceeding to declare
heirship must state: (1) the names of the heirs of the decedent who is subject to the
proceeding; and (2) the heirs’ respective shares and interests in the decedent’s property
i. A judgment to declare heirship is final but appealable
ii. Once there is a judgment, creditors may: (1) pay, deliver, or transfer the property
or evidence of property rights to an heir named in the judgment; or purchase
property from an heir named in the judgment
b. Affidavit of heirship – (TEC 203.001-.002) – statement of family history, genealogy,
martial status, or the identity of the heirs are prima facie evidence if the statement is
contained in: (1) an affidavit or other instrument legally executed and acknowledged or
sworn to before, and certified by, an officer authorized to take acknowledgments or oaths;
or (2) judgment of a court or record
i. The affidavit or instrument has been part of the record for five years or more

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 c. Probate of a will as muniment of title – (TEC 257.051) – an application for the probate
of a will as muniment of title must state and aver the following: (1) each applicant’s name
and domicile; (1-a) the last three number of each applicant’s driver’s license number and
SS number; (2) the testator’s name, domicile, and if known, age at death; (2-a) the last
three numbers of the testator’s driver’s license and SS; (3) the fact, date, and place of the
testator’s death; (4) facts showing that the court with which the application was filed has
venue; (5) that the testator owned property, including a statement generally describing the
property and the property’s probable value; (6) the date of the will; (7) the name, state of
residence, and physical address where service can be had of the executor named in the
will and other person whom the applicant desires letters be issued; (8) the name of each
subscribing witness to the will; (9) whether one or more children born to adopted by the
testator after the testator executed the will survived the testator and, if so, the name of
each of those children; (10) that the testator’s estate does not own an unpaid debt, other
than any debt secured by a lien on real estate or that for another reason there is no
necessity for administration of the estate; (11) whether a marriage of the testator was ever
dissolved after the will was made, and if so, when and from whom; and (12) whether the
state, a govt agency of the state or charitable organization is named in the will as a
devisee.
d. Transfer on Death Deed – (TEC Ch. 114) - (1) the essential elements of a recordable
deed; (2) a statement that the transfer of an interest in real property to the designated
beneficiary is to occur at the transferor's death; and (3) be recorded before the transferor's
death in the deed records in the county clerk's office of the county where the real property
is located.
i. It is ineffective until the grantor’s death;
ii. A will does not supersede a transfer on death deed;
iii. Need contract capacity to be valid, not testamentary;
iv. Divorce revokes a transfer on death deed
E. Small estate affidavit – (TEC 205.001-.008) – estate is $75,000 or less (excludes homestead and
exempt property and family allowance)
a. Only applies to intestate estates
b. May be more relevant that initially applicable because a lot of property passes from will
substitutes, so the actually estate may be small
F. Statute of limitations for probate – (TEC 256.003) – four years after the death of the decedent
G. Selection of the personal representative – (TEC 304.001) –
a. The PR will be selected in this order of preference
i. The person named in the decedent’s will; or the person designated as
administrator.
ii. The decedent’s surviving spouse;
iii. The principal devisee of the decedent;
iv. Any devisee of the decedent;
v. The next of kin of the decedent;
vi. A creditor of the decedent;
vii. Any person of good character residing in the country who applies for the letters
1. The personal representative may not be: a minor, incompetent or a felon;
2. The court may not appoint if character is unsuitable;
3. Corporations are not authorized to act as fiduciaries and non-residents of
the state (unless resident agent for service of process is appointed)

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H. Independent administration – (TEC Chs. 401-405) – parties may handle outside the court if
non-adversarial proceedings
a. This is possible even if not designated informal probate in the will!
I. Notices
a. To beneficiaries or would be beneficiaries (TEC 308.001-.004) – personal
representative must give notice to each beneficiary named in the will whose identity and
address are known to the representative or can be reasonably ascertained
b. To creditors (TEC 308.051-.051) – mailed to secured creditors; publication notice to
general creditors
J. Inventory – (TEC 309.051) – personal representative must prepare and file a document outlining
the estate property within 90 days of the personal representative’s qulaificaiton
K. Digital assets – (TEC 2001) – Revised Uniform Fiduciary Access to Digital Assets Act; see
above
V.
Professional Responsibility and Malpractice for Wills
a. Historically, if a lawyer erred in drafting a will, there was no recourse for the family or
beneficiaries because the lawyer was only in privity with the decedent
a. This is called the “privity defense”
b. Privity defense
a. Modern trend  that the attorney is liable to the would-be beneficiary even though they
are not in privity
b. Texas: privity rule is still valid!
i. But see Belt v. Oppenheimer – only the personal representative may sue the
attorney
c. Common errors in drafting wills:co
a. Clear mistakes:
i. Getting the amount or distribution wrong, getting the beneficiary wrong;
ii. Execution (failure to have the proper number of witnesses to seal a will;
procedures incorrect)
b. Detail mistake:
i. Failure to obtain proper information from the client, such as their current
situation, future plans, marriage, divorce, children, moving, etc.);
c. Knowledge mistakes:
i. Failure to understand more complex estate planning issues (tax, future interests,
Rule Against Perpetuities)
d. Conflicts of interests may arise in drafting wills
a. Trusts and estates lawyers often represent multiple persons in the same family
b. See A v. B. – a law firm represented a husband and wife in a will drafting; that same law
firm discovered the husband had an child out of wedlock; the law firm wanted to tell the
wife because the child could affect the distribution of the property
VI.
Intestacy
A. Intestacy is “an estate plan by default”

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 a. If someone dies without a will and did not use a will substitute, intestacy laws determine
how their estate is distributed
B. Often the first question to be asked is “was there a spouse”
a. And then you would have to ask “is the spouse a co-parent of the decedent’s children?”
C. The Uniform Probate Code tends to favor spouses; this represents the modern trend
a. Texas does not protect spouses in the same manner
D. Texas Intestacy Scheme (TEC 201.001-003)
a. Intestacy Without a Spouse
i. First to all children and their descendants (persons born in their biological line,
includes adopted children)
ii. If no children, then to the parents
1. If only one parent survives, 1/2 to the parent and 1/2 to the decedent’s
siblings and their descendants (would-be nieces, nephews)
2. If there is no sibling or siblings’ descendants, inherited entirely by the
surviving parent
iii. If no parents, to the decedent’s siblings and their descendants
iv. If no parents or siblings, then 1/2 to the parental kin and 1/2 to maternal kin
1. If only one grandparent survives, 1/2 to them and 1/2 to the other’s
descendants
a. If the deceased grandparent has no descendants, then inherited
entirely by the surviving grandparent
2. If no grandparent survives, shares descend to paternal and maternal kin
in the order of consanguinity (below)
b. Separate Property with Spouse
i. If the decedent has children OR a descendent of a child (a grandchild with a
deceased parent)
1. Personal property:
a. 1/3 of separate property to the surviving spouse
b. 2/3 of the separate property to the children or the descendants of
a child or children
2. Real property:
a. Surviving spouse is entitled to life estate and then remainder to
children or children’s descendants
ii. If the decedent has no children OR descendants of a child
1. Personal property:
a. All to the surviving spouse
2. Real property
a. 1/2 to the surviving spouse without a remainder to any person;
the other 1/2 passes according to the rules of descent and
distribution
i. If no parents, grandparents, siblings, etc., then the
surviving spouse gets the entire estate
c. Community Property with a Spouse
i. Provided all children are marital children, the entire community estate passes to
the surviving spouse
ii. If not:
1. 1/2 of the deceased spouse’s interest to the surviving spouse

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 2. 1/2 deceased spouse’s children or descendants
d. Texas Intestacy Example:
i. Professor Mather/H (husband is not the father to the children)
ii. Children – K&E
iii. Separate estate
1. 1/3 personal to K
2. 1/3 personal to E
3. 1/3 personal to H
4. 1/3 in life estate in real to H
5. 1/2 in real to K&E subject to life estate
iv. Community estate
1. H gets half of his half and half of PM half
a. For a total of 1/2 total
2. 1/4 of PM’s 1/2 of the community to K
3. 1/4 of PM”s 1/2 of the community to K
a. Children get a total of 1/2 of CP
E. Uniform Probate Code Intestacy
a. UPC gives a minimum dollar amount, depending on circumstances, plus a
percentage of the estate

F. What is considered a spouse?

a. Common law marriage: (1) agreement to be married; (2) holding out as married; and
(3) cohabitation for a defined period
i. “Holding out” – wearing wedding rings; listing on taxes as married; telling others
you are married
b. Putative spouse – an “innocent” spouse in an invalid marriage
i. Usually, a spouse that believes they were lawfully married but was in a bigamous
marriage
ii. These spouses will have some rights (but unclear exactly what they are)
c. Unmarried couples
i. No rights at death
G. Simultaneous Death
a. A person succeeds to the property of a decedent only if the person survives the decedent
for an instant of time
i. This is most often arises with spouses dying in tragic events (car crashes, plane
crashes, etc.); but does not solely apply to spouses
b. The Original Simultaneous Death Act – “if there is no sufficient evidence of the order of
deaths,” each of two simultaneously dying persons deemed to have predeceased each
Texas = 120-hour rule applies
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for intestacy, life insurance,
TOD account, wills, joint
tenancy
 other, so neither inherited from the other”
i. This bred litigation to what constituted “sufficient evidence”
c. 1993 Revision – if you do not survive the other person by 120 hours, you are deemed to
have predeceased the decedent
i. Must establish that the they survived by 120 hours by clear and convincing
evidence
d. 120 hours is merely the default rule
i. In a will, the testate can provide for a different time (it is usually longer)
H. Descendants
a. In all states, after the spouse’s share (if any), is set set aside, children and descendants of
deceased children take the remainder of the decedent’s property to the exclusion of
everyone else
i. If there are children, parents of the decedent are not heirs
b. When one of several children die before the decedent at issue, the children’s descendants
represent the deceased child
c. Representation
i. English per stripes: the English per stirpes system of representation treats each
line of the decedent equally; spilt the shares from the decedent’s line
1. This is the common law rule

ii. Modern per stripes: go to the first generation wherein a survivor exists and
divide the shares from there;
1. Modern per stripes treats equally each line of decent beginning at the
closest living generation
2. Texas follows modern per stirpes

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 iii. UPC Per Capita Approach – go to the first generation where someone is alive,
and divide, do the same at each generation
1. The first step is the same as modern per stirpes, but shares of deceased
persons on that level are treated as one pot and are dropped down and
divided equally among the representatives in the next generation

d. Who is takes?
i. If there is a descendant  ancestors and collaterals do not take
ii. If there is a surviving spouse but no descendant  1/2 states, parents share with
spouse; other half, spouse takes to exclusion of parents
iii. In most states, step-children are not considered descendants
1. A small minority recognizes
2. TEXAS DOES NOT
iv. In-laws are not considered ancestors
v. If there is no spouse or parent, the decedent’s heirs will be remote ancestors or
collateral kindred
1. Collateral kindred – all persons who are related by blood to the

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 decedent but who are not descendants or ancestors
2. First-line collaterals – descendants of the decedent’s parents, other than
the decedent and the decedent’s descendants (aka siblings, nieces,
nephews).
3. Second-line collaterals – descendants of the decedent’s grandparents,
other than the decedent’s parents and their descendants (aunts, uncles,
cousins)

vi. Parentelic system – the intestate passes to parents and their descendants,
grandparents and their descendants, and if none, then great-grandparents
(essentially horizontal access and then down) until an heir is found
1. Majority view
2. Texas follows the parentelic system
vii. Degree of relationship test – the intestate passes to the closest of kin, counting
degree of kinship
1. The small numbers on the consanguinity table indicate degree of
relationship
viii. Laughing heirs – an heir distant enough to feel no grief when a relative dies and

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 leaves and inheritance
1. Some states cut-off laughing heirs
e. Half-bloods – at English common law, half-bloods did not inherit from intestate
succession
i. UPC/Majority – an heir inherits without regard to how many common ancestors
in the same generation the heir shares with the decedent
ii. Texas – a half sibling takes a half share
1. “Pretend each ‘full’ sibling is two people’” (SIBLING INHERITANCE)
f. Negative disinheritance

i. Common law  this was not allowed

ii. Modern trend  is to allow negative disinheritances
1. “To all my heirs except Alice”
2. Texas follows the modern trend
3. UPC
g. Adoption
i. Adoption creates a new family/parent-child relationship
ii. Whether equitable or statutorily adopted, an adoptive child is regarded as a child
of the adopted parents and the adopted child inherits from the adoptive parents
and their relatives
iii. Whether an adoptive child can adopt from both their birth parents and their
adoptive parents
1. UPC approach – an adoptive child can adopt from both their adoptive
parents and their birth parents only if they were adopted by a step parent
2. Texas – an adoptive child can inherit from both their adoptive parents
and birth parents and their relatives unless the right is terminated at
adoption
3. Some other states – an adoptive child only inherits from their adoptive
parents and their relatives
iv. Adult adoption - in general, an adopted adult is an adopted child
1. Most intestacy statutes draw no distinction between individuals adopted
as minors and those adopted as adults
2. In some states, the adoption of one’s lover is not permitted (sometimes
used by same-sex partners before legalization of same-sex marriage)
v. Adoption and Wills and Trusts

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 1. Is a child adopted by A entitled to share in a gift in a will or trust by A to
“my children, my issue, or my heirs?”
2. Common law  NO
a. The stranger to the adoption rule – the adopted child is
presumptively barred, whatever word of kindship is used, if the
donor was not the adoptive parent
3. Modern trend  –an adoptive child is presumptively included in a gift
by T to A’s children; the theory is that A was likely a true parent to the
adopted minor
a.
4. There is no clear majority if the adoptive child is an adult though
vi. Adoption  cannot be revoked!
vii. Equitable adoption  under the theory of equitable adoption, an oral agreement
to adopt A between H and W and A’s biological parents is inferred if H and W
take the baby into their home and raise it as their child
1. There must be agreement to adopt
a. Both parties must have had authority to agree
2. Equitable adoption operates for the benefit of the equitably adopted child
a. In TX, the parent may benefit as well
3. Need holding out as a child/family
4. LIMITED TO INTESTACY
h. Posthumous Children
i. Common law if the husband died and the child was born within 10 months,
the child was considered a posthumous child of the husband
ii. Texas Family Code 160.204 – rebuttable presumption that a man is the father of a
child born within 300 days of his death
iii. UPC consent in writing or via clear or convincing evidence
iv. Restatement  reasonable time
i. Nonmartial children
i. Common law  child of no one; could not inherit from the mother or father
ii. Modern trend 
1. Mother: a child of an unmarried mother may inherit from their mother
whether the child was adopted or born
2. Father: rules vary; some options:
a. Both birth and adoption;
b. If the father is adjudicated the father;
c. If the father executes a statement of paternity;
d. If the father is deceased – by DNA testing;
j. Texas Parentage Statutes
i. Texas Estate Code § 201.051 – for the purposes of inheritance, a child is the child
of the child’s biological or adoptive mother, and the child and the child’s issue
may inherit from the child’s mother and the child’s maternal kindred
ii. Texas Estate Code § 201.052 – for the purposes of inheritance, a child is the
child of child’s biological father if: (1) the child is born under circumstances
described by Section 160.201 of the Texas Family Code; (2) the child is
adjucated to be the child of the father by court decree; (3) the child was adopted
by the child’s father; (4) the father executed an acknowledgment of paternity;

CAITLIN SULLIVAN_14
 1. TFC Section 160.201 – the father-child relationship is established by:
(1) an unrebutted presumption of the man’s paternity under
Section 160.204; (2) an effective acknowledgment of paternity by the
man; (3) an adjudication of the man’s paternity; (4) the adoption of the
child by the man; and (5) the man’s consenting to assisted reproduction
by his wife.
2. If the court determines by clear and convincing evidence that the
purported father is the father, the child is treated as a child for the
purposes of inheritance
a. May inherit from paternal kindred
3. May not inherit if “if the purported father’s parental rights have been
terminated”
h. Posthumously conceived children
i. Often arises in Social Security Survivorship disputes
ii. UPC approach – a posthumously conceived child inherits from the deceased parent if:
Texas adopted
(1) during the life the parent consented to the posthumous conception in a signed writing
the UPC or consent is otherwise proven by clear and convincing evidence; and (2) the child is in
approach utero not later than 36 months or is born not later than 45 months after the parent’s death
iii. Woodward factors:
i. Best interest of the children;
1. The protection of minor children from the stigma of “illegitimate status”;
2. The legislature had not expressly acted;
3. The financial best interests of the children;
4. If there are other (not posthumously conceived children), what are their
best interests;
ii. The State’s Interest in the orderly administration of estates; and
1. Posthumously conceived children must obtain a judgment of paternity;
2. Could bread litigation and pit families against each other;
iii. The reproductive rights of the genetic parent and their consent.
1. Need evidence that the deceased intestate consented: (1) to the
posthumous reproduction; and (2) to support any resulting child.
iv. Whether Posthumously conceived children are included in a gift to in a will or trust to a
biological class?
i. When membership is based on something else, i.e., time based (“to A’s children
every 2 years”)  does not undermine finality concerns
ii. UPC approach – whether a posthumously conceived child of A is included in a
class gift in a will or trust by T to the “children,” “issue,” or “descendants” of A
depends on whether the distribution is triggered by the predeceasing parent’s
death
1. If A’s must die before the children take  the posthumously conceived
child must be in utero not later than 36 months after or born not later
than 45 months after
2. If A’s death does not close the class  regular rules apply
iii. Some jurisdictions look to the testator’s intent
i. Surrogacy – today most states consider, “who is the intended parent”
j. Same sex couples
a. Both are parents through biology/adoption

CAITLIN SULLIVAN_15
 b. Texas struggles with this
k. Advancement and Hotchpot
v. Advancements – a payment to an heir during one’s lifetime as an advance share of one’s
estate
i. At common law, any lifetime gift by the decedent was presumed to be an
advancement of the child’s share; the child had the burden to show that the gift
was not intended to be an advancement
ii. Modern trend – no presumption of advancement
1. Require a writing to prove advancement
Writing must be iii. Texas: a gift to the decedent’s heir is an advancement against the state only if:
contemporaneous (1) the decedent declared in contemporaneous writing, or the heir acknowledged
in writing, that the gift was an advancement; or (2) the decedent’s
contemporaneous writing or the heir’s written acknowledgment otherwise
indicates that the gift or nontestamentary transfer is to be considered in
computing the division and distribution of the estate
vi. Hotchpot – the inter vivos gift is “added” to the estate
i. O dies intestate with $50,000 estate, leaves no spouse but has three children, A,
B, C,
ii. A received an advancement of $10;000; this is added to the estate for $60,000
iii. Divided equally, each child gets $20k but A already got $10k; so A gets $10k
iv. If the child with the advancement received a substantial amount then they will
not participate in the hotchpot
1. Example: if instead A got $40,000 then it is not advantageous to them to
participate
V.
Bars to Succession
A. Texas transfers to minors – minors cannot receive, so who takes care of it?
a. Guardianship – you can have a guardian of: (1) the person [care, custody, and control]; or
(2) the estate [has to report regularly to the state]
b. Conservatorship – Texas does not have; but they act has a guardian for the minor’s
property
c. Custodian accounts – provides an alternative for investment accounts; the Uniform
Transfers to Minors Act provides “money for the children’s use until they turn 21 and
then the child gets the remainder)
d. Trusts – flexible (later in the course)
e. Ad litem – limited purposes
B. Slayer rule – the doctrine that a killer or the killer’s estate cannot profit from his victim’s death by
inheritance or decent
a. Applies in intestacy, wills, transfers
b. Potential options outside of slayer rule:
i. Killer takes all regardless;
ii. Killer takes half;
iii. Killer takes subject to a constructive trust;
1. Constructive trust - An equitable remedy by which a court recognizes
that a claimant has a better right to certain property than the person who

CAITLIN SULLIVAN_16
 has legal title to it; the individual with the legal right holds the trust for
the other
a. Texas is in the constructive trust view
c. Texas: the probate court may reevaluate the evidence and if the killing was involuntary,
killer may take victim’s estate
C. Unworthy heir – in the United States, usually limited to slayers
a. China, for example, has behavior-based models wherein if a heir treated the decedent
poorly, they will get disinherited
b. In some states, a spouse who abandons their decedent is barred
c. In a few more states, a parent is barred from taking from the child if the parent refused to
support the child
d. In a handful of states, inheritances are barred to individuals that abused the decedent
elder or other vulnerable person
D. Disclaimer – sometimes an heir or devisee will decline to take the property
a. The effect is to treat the disclaimant as if they predeceased the decedent
b. Texas: (1) disclaimer in writing; (2) irrevocable; (3) filed, notarized and completed
within nine months after the interests is created or vests
c. Most common reasons: to reduce taxes or keep property from creditors
d. Most disclaimer statutes provide that a disclaimer relates back for all purposes to the date
of the decedent’s death
i. Ordinary creditors: A disclaims her interest in B’s estate; A’s creditors cannot
reach the disclaimed property
ii. Federal tax liens: the IRS is in a different position
1. Dyer v. United States
e. Medicaid – sometimes an applicant will impoverish themselves to meet applicable
standards and disclaim an inheritance
i. The weight of the authority says that if you could have received an inheritance,
and you disclaim, then you lose Medicaid eligibility
VI.
Wills Formalities and Forms
A. The Wills Act of every state requires certain formalities for making or revoking a will Codicil  MUST meet the
B. Execution of wills same general requirements
a. There are three core formalities: as a will; so either
(1) writing; (2) signature;
i. Writing; and (3) attestation OR a
ii. Signature; valid holograph
1. In some states, must be signed at the end of the will to be
valid.
iii. Attestation.
1. Attestation is witnesses to the will;
C. The strict compliance rule – under traditional law, a will must be executed in strict compliance
with all the formal requirements of the applicable wills act
a.
D. Attestation
a. Attestation “is made in the presence of two or more witnesses”

CAITLIN SULLIVAN_17
 b. Functions of attestation: (1) ritualistic; (2) evidentiary, if there are witnesses, it is harder
to argue about; (3) protective – actually represents what the testator says; and (4) safe
harbor
c. What does it mean to be “in the presence?”
i. Common law view: line of sight test:(1) witnesses have to see testator sign;
(2) testator has to see the witnesses sign; and (3) witnesses have to see each other
sign
1. This remains a minority view
ii. Majority view: conscious presence test: a witness is in the presence of the
testator if the testator, through sight, hearing or general consciousness of events,
comprehends that the witness is in the act of signing
1. “General vicinity”
2. Texas follows the conscious presence test
iii. Uniform probate code: dispenses of requirement that witnesses sign in the
testator’s presence
iv. Examples: Stevens v. Casdorph – Mr. Miller went to his bank to have his will
executed in front of employees; he signed his will in front of Ms. Pauley, who he
knew personally; then she took it two colleagues and they signed at their work
areas
1. Court held not proper execution; the testator did not see the colleagues
(witnesses) sign and the witnesses did not see Mr. Miller sign
d. Texas Estate Code § 251.051, Attested by Two or More Witnesses Who are at least
14 years of age
i. Witnesses need to see the testator sign but not vice versa
e. During COVID, many states allowed or remote witnessing via video conference software
and remote notarization
i. See In Matter of Ryan – Mr. Ryan was not physically present in the room with the
witnesses but they were able to see him execute the will
E. What qualifies as a valid signature?
a. A handwritten text by the testator will almost always satisfy the signature requirement
b. But issues may arise if something less or incomplete is used
c. A signature is anything the testator intends to be a signature
i. Can be an X; nickname, abbreviation; a symbol or methodology
d. If the testator cannot sign themselves  they may have someone sign for them, must
be:
i. (1) in the testator’s presence; and (2) at their direction
e. Self-proving affidavits- a self-proving affidavit allows the witnesses to make an affidavit
swearing as to the will’s due execution
i. At common law: cannot take place at the same time; had to be (1) will execution;
and then (2) affidavit
ii. Modern trend: can be one execution
f. Taylor v. Holt – a week before the testator died, he comprised a will using software on
his computer; in the presence of two witnesses, he typed a signature in cursive font
i. Court found the change in font was a mark intended to be a signature
g. Order of signing – generally, the testator must sign or acknowledge the will before the
witnesses attest
i. But see Bitetzakis – if they all sign as “one continuous transaction,” the order

CAITLIN SULLIVAN_18
 of signing is not critical
h. Subscription – the English common law rule that the testator sign “at the end of the will”;
meaning as the last step
i. Statutes in a handful of states have adopted
ii. If something is added after signed – the addition would be a codicil
i. Delay in attestation – if the witness see the testator make or acknowledge his signature
but the witness does not immediately sign
i. The UPC says so long as attested in a “reasonable time”
1. Could potentially extend under after the testator’s death
F. Who qualifies as a witness?
a. In all states, must be a certain age to be competent
b. In English common law, an interested witness was not allowed to testify;
i. Common law  interested wills were invalid
c. Purging statues  allowed a will attested by an interested witness to be admitted to
probate, but purged any bequest to the interested witness
i. Excess amount rule  Most purge only the benefit that an interested witness
would receive under a will that is in excess of what they would have received in
intestacy
CL  no interested ii. Majority of states  purging statutes
witnesses 1. Texas is amongst; follows “excess amount rule”
Majority  purged
of excess interest what
a. But also - permits the interested witness to take if their testimony
would receive under a about the will execution can be corroborated by some other
will that is in excess disinterred and credible person
of intestacy
Modern  interest is iii. Supernumerary – if the will is witnessed by a sufficient number of disinterested
irrelevant witnesses, the interested witness may take full devise
d. UPC/Substantial minority – do not require witnesses be disinterested
and an interested witness will not be purged of his devise
i. This is the modern trend  interest is irrelevant
e. See Estate of Morea – allow the witness was interested, he actually was bequeathed less
in the will than he would take at intestacy, so he was disinterested and the court did not
purge
G. Will Execution Ceremonies
a. Ideal ceremony:
i. If the will spans more than one page, securely fasten the pages of the will
together; number its pages
ii. Assemble everyone in one room: (1) the attorney; (2) 2-3 disinterested adult
witnesses; and (3) a notary
1. No one leaves or enters
iii. May read the will aloud or have the testator read
iv. Ask the testator:
1. Is this your will?
2. Have you read and do you understand it?
3. Does it represent your wishes?
4. Do you want the witnesses to witness your will?
v. Have the testator sign, have witnesses watch;
vi. Read the attestation clause aloud, have witnesses agree with the statement and
sign the will;

CAITLIN SULLIVAN_19
 vii. Execute self-proving affidavit
1. TEC § 251
viii. Make a copy for the attorney’s files
b. Safeguarding the will
i. Potential difficulties have prompted some lawyers to recommend the client’s
original will be left in the lawyer’s care
ii. But keeping a will may have the appearance of soliciting business, which is
unethical
iii. Options to safeguard: (1) attorney keeps; (2) client keeps; (3) deposit with court
(Texas); (4) hide but not too well that it cannot be located
H. Mistakes in the Execution
a. Common law  the will is invalid; cannot be reformed
i. See In re Pavlinko’s Estate – H and W signed each other’s wills but strict
compliance rule
1. Did not want to render the Wills Act “meaningless”
b. Modern trend  mistakes in the execution can be reformed
i. See In re Snide – H and W sign each other’s wills
1. Intent of the H to sign his own will was clear
2. Instrument was genuine
3. No danger of fraud
4. Mutually identical wills besides the names
c. Curing Defective Execution and Reformation
i. Probate the instrument that the decedent intended to sign but did not;
1. Reforming the execution problem
ii. Probate the will the decedent actually signed but then reform its terms
1. Reform through mistake
I. Substantial Compliance Doctrine – the key question is whether the manner in which an
instrument was executed satisfied the purposes of the Wills Act formalities
a. Provides relief from strict formalities
J. Dispensing Power – courts may dispense of any will formality
a. Also known as the harmless error rule
b. Allows courts to treat the document or writing as if it had been executed in compliance
with Wills Act if the proponent of the document or the writing establishes by clear and
convincing evidence, the document is the will, revocation, addition or revival
i. The key is intent .
c. Some states and the UPC have adopted this view
d. Texas Estate Code § 255.451-.455, A Will May be Modified or Reformed
i. For efficient;
ii. Tax purposes;
iii. Qualify a beneficiary for government benefits; or
iv. Allows reform of a scrivener’s error if the testator’s intent is established by clear
and convincing evidence
e. In Texas, the personal representative may petition for dispensing power
K. Electronic of Digital Wills
a. Electronic signatures are widely used today
i. Statutes allow for commercial transactions but the Wills Act often exclude wills,
codicils, and trusts

CAITLIN SULLIVAN_20
 b. The Uniform Electronic Wills Act (small minority) allows: (1) retrievable in a
perceivable form; (2) readable as text; and (3) requires witnesses or notarize
c. Revoking is a potential issue  perhaps dragging to electronic trash?
I. Conditional wills
a. A will that depends on the occurrence of an uncertain event for the will to take effect.
b. Example: “If I die on this trip”
c. Most states hold that this is the state of mind of the testator, rather than a condition
i. It induced the testator to making the will  not a condition precedent to the
operation of the will
d. Need express language to be a condition
i. If I die on this trip and ONLY if I die on this trip
J. Sham or joke wills  invalid
a. “Compose this will to join this fraternity”
b. Passes through intestacy
K. Statutory wills  Only a few states have statutes that provide will forms for people to use
a. Two forms: either (1) fill-in-the-blank or (2) incorporate by reference to statutory
provision
b. Usually two forms in the statute, one for a very simple will, the other for children
c. The probate bar does not “love” statutory wills
L. Holographic wills – handwritten by the testator; a little more than half of the states allow
a. (1) must be written wholly in the testators handwriting and (2) signed by the testator
b. Issues that arise with holographs: (1) does the will needed to be dated; (2) signature, what
constitutes and where; (3) testamentary intent; and (4) all in handwriting
c. Date:
i. Some states require; Texas does not
d. Signature and where
i. In almost all states, the testator may sign at the end, at the beginning or anywhere
else of the face of the document
ii. Texas construes broadly, allows if “material provisions” are in the testators
handwriting; may disregard printed provisions
e. Testamentary intent
i. Must have intended it to be a will
f. What extent of handwriting
i. Common law  everything had to be in the testator’s handwriting
CL  all in ii. Material provisions  only the signature and the material provisions of the will
handwriting need to be in the testator’s handwriting
Middle view 
material provisions 1. Can you determine the will by just the handwritten portions
Modern  material 2. About a third of the states allowing holographs (including Texas)
portions and context, a. Texas will interpret broadly; allow if material provisions are in
EE
handwriting and may disregard provisions that are printed
3. Immaterial provisions may be date or introductory wording
iii. Material portions and context allows for extrinsic  words identifying
property and the devise
1. About a third of the states allowing holographs follow
2. Modern trend
3. Material portion also allows extrinsic evidence to establish testamentary
intent

CAITLIN SULLIVAN_21
 a. See In re Estate of Kuralt – extrinsic evidence established that
Kuralt intended to convey the entire property
g. Courts have recognized holographic wills in many forms
i. Tractor fender; letter to the belly dancer on the wall; note card on a purse; writing
on clothes
M. Nuncupative will – oral wills
a. English common law allowed for personal property
i. So, United States law evolved to allow
b. Some states still allow
i. Texas abolished about 15 years ago
c. Usually requires: (1) testator is dying (last illness); (2) reduced to writing by someone
within a certain number of days; (3) witnesses; (4) usually a dollar value limited, or may
be limited to personal property; (5) in general does not revoke a prior written will that is
still valid
VII.
Revocation of Wills
A. A will is said to be subject to amendment or revocation by the testator at any time prior to death
a. Four typical ways:
i. By operation of law/change of circumstances
1. Example: divorce; in most states, divorce will revoke items bequeathed
to the former spouse and also in most states their family members
ii. By proxy: (1) in testator’s presence and (2) at his direction
1. Testator is sick in bed and says, “go get that will and destroy it”
2. UPC and majority
iii. By physical act
iv. By subsequent document
b. An oral declaration that a will is revoked, without more, is not enough to revoke
B. Revocation by physical act
a. Physical acts include burning, tearing, destroy, cancelling, mutilating or obliterating
b. Lay person is most likely to use revocation by physical act
c. Key  intent; not an accident
i. But must follow form permitted in statute
d. Modern/UPC  Just has to affect the will in some way.
i. i.e., Writing void on the face of the will.
C. Partial revocation by Physical Act
a. Common law  not permitted;
i. Texas still follows but exception is holographic wills
b. Modern trend  permitted
i. What happens in a state that permits?
D. Revocation by Subsequent Instrument
a. May be either express or implied
b. Express is the preferred method
i. “I, John Doe, resident of _____, ___. Make this my will and revoke all prior wills
and codicils”
ii. Normally, the same formalities as the will must be followed

CAITLIN SULLIVAN_22
 iii. Includes holographs if permitted
c. Implied or inconsistency
i. Arises when the testator does not use an express revocation clause
ii. UPC Approach:
Codicil - A supplement or addition to a will, 1. A subsequent will that does not expressly revoke a prior will, but makes
not necessarily disposing of the entire estate a complete disposition of the testator’s estate, is presumptively revoking
but modifying, explaining, or otherwise
qualifying the will in some way.
the prior will by inconsistency
2. If the subsequent will does not make a complete disposition of the
testator’s estate, it is instead viewed as a codicil
E. Presumption of Physical Act Revocation
a. A presumption of revocation arises when the last will that is known to be in the
testator’s possession cannot be found or is found in the mutilated condition
b. Can be rebutted  spilt of authority on how much evidence is needed to rebut
presumption
i. Many cases require clear and convincing evidence
ii. Others allow preponderance of the evidence
iii. But evidence must be from when the testator was alive!!!
c. If a lost or mutilated will was last known to be in the possession of someone else, there is
no presumption unless there is proof that the testator in fact revoked
F. Revocation of a copy by physical act/Harmless Error Rule
a. Common law  no
b. The modern trend is more forgiving; tries to honor testator intent
i. If the testator intended to revoke by physical act and did not know it was a copy,
the modern trend will revoke
ii. But the UPC limited to subsequent writing revocation errors
G. Lost wills but unrevoked wills – most states will admit to probate
a. Can be proved by a photocopy, a digital copy; the drafter’s notes or recollections; or by
other clear and convincing
H. Dependent Relative Revocation
a. A doctrine for undoing mistaken revocation
b. Testator undertakes to revoke her will on mistaken assumption of law or fact 
revocation is ineffective if the testator would not have revoked the will but the for the
mistaken belief
i. Mistake  negates revocatory intent
c. Often arises when  a testator who revokes a former will believes their new will is valid
but for some reason unknown to the testator it is not
d. (1) rule of intent; (2) generally presume testator would prefer prior will to intestacy;
and
e. (3) will ignore the revocation and reinstate the prior will if: (a) there is an alternative
disposition (like a prior will) or (b) the mistake is recited in the revoking instrument
i. (a) is often a mistake of law
ii. (b) is often a mistake of fact
f. Examples:

i. T has will leaving $5000 to his old friend Judy. Later, he executes a codicil
stating, “I revoke the legacy to Judy, because she is dead.” In fact, Judy is
not dead.

CAITLIN SULLIVAN_23
 1. Should we apply DRR?
a. Yes. Mistake is recited in the revoking instrument.
2. What if the T did not give a reason in the codicil?
a. Need an alternative disposition (like a prior will).
ii. T executes will to Peggy, then revokes and executes will to Margaret (same
person), but Margaret is a witness. Will #1 is probated instead, since
Testator wants Margaret to take.
1. Problems:
a. She is an interested witness and, in most states, will be purged of
her interest.
b. Could ignore second instrument and probate the first.
c. Using DRR because there was a mistake. Mistake of fact in the
name and a legal mistake because now Margaret is an interested
witness.
iii. Testator creates will #1 where everything goes to his best friend. Then the
testator learns that the best friend has died and executes a new will for
everything to go to another best friend. Turns out, the first best friend did
NOT die. Best friend 1 wants the first will to be revived.
I. Revival – governs the reinstatement of a previously revoked will
a. Typically arises if:
i. T executes Will # 1;
ii. Later T executes Will # 2;
iii. T revokes Will # 2
1. Is Will # 1 revived?
b. Common law  yes, automatic revival
i. Minority view
c. Majority view  intent
i. Presume no revival; but may rebut with testator’s intent
d. Texas view  no revival; the testator must re-execute the will for it to survive
e. Small minority  there is a revival but only if Will # 2 did not expressly revoke Will # 1
VIII.
Components of Will
A. Integration
a. Under the doctrine of integration, all papers that are present at the time of execution and
are intended to be part of the will are treated as part of the will
B. Incorporation by reference
a. A will may incorporate a document by reference if:
i. Document is in existence at the time the will was created;
ii. Is clearly identified in the will; and
iii. Intent to incorporate is clearly expressed.
b. The burden of proof is on the person trying to incorporate the document
C. Acts of independent significance
a. Also known as fact doctrine or doctrine of nontestamentary facts
b. A testator may bequest gifts the change, so long as the act has significance beyond their
testamentary effect
i. Example: “I give my nana whatever car I currently possess,” or “I give $1,000 to
each of my employees upon my death”

CAITLIN SULLIVAN_24
 1. Not sufficient: “Whatever is in my top drawer”
ii. Has to have some significance outside of the death
1. Not sufficient: “The person I name on my death bed”
D. Republication by Codicil
a. A codicil republishes the original will, whether or not the codicil expressly republishes
the prior will
i. Sometimes it can help with some doctrines
1. Johnson v. Johnson – merged incorporation by reference and
republication by codicil; the document did not exist at the time will was
executed but it did exist when the codicil was executed
ii. Can also have broad reaching consequences
1. Suppose that a testator revokes his first will by a second will and then
executes a codicil to the first will; if the first will is republished, the
second will is revoked by implication
E. Contracts by Will
a. Usually comes up in the context of caring for an individual or doing some action in
exchange for being included in the will
i. “If you take care of me until I die, I will….”
b. A contract to make a will must be in writing
i. May use the will itself or the will may refer to the existence of a contract
1. Allows for recovery by specific performance
ii. Without writing:
1. Quantum meruit: difficulty is the beneficiary must still prove the
existence of a n agreement
2. Part performance – (1) terms by clear and convincing evidence;
(2) actions unequivocally referable to the existence of the contract; and
(3) services of peculiar value to promisor, so money damages not
available or sufficient
c. Contracts Not to Revoke a Will
i. Typically involve a married couple that has executed a joint or mutual wills
1. Joint – when one will executed by two persons if the will for both
a. When one dies – probated; when the other dies, probated again
2. Mutual wills or mirror-imagine wills – separate wills of two persons that
contain mirror-image provisions
a. Usually want to favor the same beneficiaries
ii. Must have proof pf the K not to revoke
1. This is key
iii. Most states now have statutes requiring that the will refers specifically to the
existence of a K, and non K is to be presumed from the execution of a joint or
mutual will
1. Including Texas  does not presume a joint or mutual will
iv. Modern trend  just because you have a mutual will does not mean it is
irrevocable

CAITLIN SULLIVAN_25
 IX.
Will Capacity
A. Will contest – the litigation of a will’s validity, usually based on the allegations that the testator
lacked capacity or was under undue influence
B. Most challenged aspect of wills
C. You have to be 18 years old and have a sound mind
D. Mental Capacity to Make a Will
a. Why require?
i. Protection: (1) for the testator; (2) for society; and (3) for the beneficiaries
ii. Legitimacy of the legal process
iii. Sanity necessary for full personhood
b. Age? In Texas, a person of sound mind may execute a will if:
i. 18 years or older;
ii. Is or has been married; or
iii. Is in the armed force
c. Test for capacity
i. The capacity required to make a will is minimal
ii. Testator must know: (1) the nature and extent of their property; (2) persons who
are the natural objects of their bounty; (3) disposition of testator’s property; and
(4) how these three requirements relate
iii. The test is one of capability, not knowledge
iv. Despite “oddities” or “idiosyncrasies” a will is not invalidated for capacity 
“crazy” does not make you incapacitated
1. Lucid interval: even if someone is insane, they may have created the
will in a “lucid interval,” WHICH IS OKAY
2. See In re Estate of Wright – oddities are not enough
d. In most states, the capacity to make a will requires less mental ability than to make a
contract or to complete an irrevocable lifetime gift
e. The legal presumption is always in favor of sanity, especially after attestation by
subscribing witnesses. It is the duty of the subscribing witnesses to be satisfied of the
testator’s sanity before they subscribe the instrument.
f. Role of attorney  a lawyer may not draft a will for a person the lawyer believes to be
incompetent, but the lawyer may rely on her own judgment of the client’s capacity
i. It not the job to evaluate  if they are clearly incapacitated, cannot make the will
g. Role of witnesses  typically, there to talk about validity but can testify to capacity
h. Juries often find lack of capacity
i. Why may this occur? The testator is dead and it is emotional
i. Burden of proof  majority says on the contestant to show lack of capacity
j. Insane delusion
i. A person may satisfy the test for capacity but nonetheless be suffering from an
insane delusion
ii. Legal term rather than medical
iii. Test: a delusion to which the testator adheres against all evidence and reason to
the contrary
iv. The insane delusion must affect the disposition of the will
1. Example: Breeden v. Stone  yeah, the testator had insane delusions

CAITLIN SULLIVAN_26
 (the gov’t implanted listening devises in his home and was plotting to kill
him and his dog), but these did not affect the disposition of his property;
the opponents of the will (his family) were not close with him
v. The Court may just strike the portion of the will that is affected by an insane
delusion rather than invalidate in its entirety
E. Undue Influence
a. A transfer is procured by undue influence is the wrongdoer asserted such influence over
the donor that it overcame the donor’s free will and caused the donor to make a donative
transfer that the donor otherwise would not have made
b. This is a doctrine of substituted judgment  must show someone substituted their
judgment (their desire!) for that of the testator
i. Difficult to prove
c. Burden of proof  on the contestant
i. A few states shift the burden to the proponent if the factors are met
1. MINORITY VIEW though
d. Factors for undue influence
i. Fiduciary/confidential relationship – close relationship between the testator and
the influencer
1. Relatives, lives with them; lawyers; caretakers
ii. Motive and opportunity
1. The beneficiary was able to influence because they saw the testator often
iii. Suspectable and weak testator
1. Elderly, sick, dependent
iv. Unnatural disposition is made
1. Disinherits family members that would normally be expected to be
beneficiaries in favor of the influencer
v. Active in the procurement of the will
1. Influencer hired the attorney; influencer supervised the execution; there
was secrecy in general
vi. Previous wills, patterns of disposition
1. Is there continuity amongst former versions of the testator’s will
indicating a settled intent of disposition
vii. Compare all factors  but not all are necessary for an undue influence finding
e. See In re Sharis – grandson moved in with her grandmother and her husband (his step-
grandfather; took near control of their banking accounts, hired the attorney for his
grandmother’s will; the grandmother never even actually communicated with attorney;
F. No contest clause
a. A testamentary provision that threatens to dispossess any beneficiary who challenges the
terms of the will
i. Beneficiary forfeits their interest if they challenge
ii. See Lipper
b. To be effective, must typically devise something to the challenger
c. Generally, no-contest clauses are strictly construed (unless clearly unmerited) because:
(1) they discourage unmerited suits; and (2) encourage legitimate suits
d. If the challenger brings good faith challenge with probable cause  the court will not
enforce the clause
e. Minority view  courts will interpret lawsuit as a will construction rather than will

CAITLIN SULLIVAN_27
 contest to avoid the abuse
f. Role of attorney
i. Make the contest risky for the beneficiary
G. How to avoid contest:
a. (1) letter to attorney explaining disinheritance; (2) video conference explaining; (3) a
family meeting to discuss; (4) medical or psych exam; (5) care with execution;
(6) no-contest clause; (7) Inter Vivos trust; and (8) Inter Vivos gifts
H. Attorneys as beneficiaries
a. Texas  attorneys may only draft and be included a beneficiary in wills for spouses,
ancestors, descendants or relatives in the third degree by consanguinity or affinity
i. If not, bequest or devise  VOID
b. Attorney may do the same for spouse’s siblings, parents, grandparents, children, or
grandchildren
I. Ante-mortem or living probate
a. If you anticipate a contest, may probate the will before testator’s death
b. Declares the validity of the will
c. Minority  only nine states offer
i. Why? Wills get reformed a lot, hearings will follow, and this can get expensive
J. Duress – when undue influence crosses the line to coercion, it becomes duress
a. A donative transfer is procured by duress if the wrongdoer threatened to perform or did
perform a wrongful act that coerced the donor into making a donative transfer that the
donor would not otherwise have made
b. Could range from:
i. Not feeding the testator; harassing the testator
ii. Has to affect the disposition
K. Fraud
a. Elements: (1) a misrepresentation; (2) either intentional or with reckless disregard to its
falsity; (3) of a material fact; (4) that induces the testator to affect the will; (5) that the
beneficiary did; (6) the testator justifiably relied on; and (7) did change the will.
b. Fraud in the execution – the testator did not know they were singing a will
c. Fraud in the inducement – testator understand what he is signing is a will but a lie
induced him to sign
d. If there is fraud, the court may impose a constructive trust
e. See McDaniel v. McDaniel – one of the testator’s sons had told the testator before he died
that the other son had “stolen all his money and abandoned him”
X.
Will Construction
A. Worst evidence problem – inherent to the probate procedure; the best witness is dead by the
time the issue is litigated
B. Extrinsic evidence to reform:
a. There are generally two approaches to reformation: (1) the plain meaning/no extrinsic
evidence rule and (2) modern trend towards fixing mistakes
C. Plain meaning or No Extrinsic Evidence Rule
a. General rule: the plain meaning of the words of a will cannot be disturbed by evidence
that the testator intended another meaning

CAITLIN SULLIVAN_28
 i. Exceptions:
1. Ambiguity  latent ambiguities may be fixed but not patent
(modern may allow)
a. Latent ambiguity – something that is ambiguous when you
consider the circumstances
b. Patent ambiguity – appears on the face of the will and were
required to be resolve within the four corners of the will
c. Example: T leaves property to Mr. and Mrs. Smith residing at
1223 Lazy Lane; T was friends with the Mrs. Smith that lived
there before but not at their death
i. Latent ambiguity (equivocation when two things have
the same name); extrinsic evidence permitted
d. Modern trend  increasingly inclined to resolve both patent
and latent
2. Omission or gaps  may admit extrinsic evidence to reconcile a gap
or omission
a. Example: T left 25% of estate to A; 25% of estate to B; and 25%
to C  admit extrinsic evidence to determine where the other
25% goes
3. Equivocation  leaves to niece named Alice but has two nieces
named Alice  can admit extrinsic evidence to see which one; works
for property as well
4. Personal usage exception  to prove that everyone knows what a
term personal to the testator means
a. Example: Mosely v. Goodman – the testator left to Mrs. M
because he thought she was the woman he was familiar with
from the cigar shop
5. Mistake  courts will not “fix” a scrivener or testator error
a. But extrinsic evidence is admitted to show fraud; duress; undue
influence; dependent relative revocation; striking
misdescriptions
6. Misdescription  name or description is wrong
7. Circumstances  to determine testator intent
b. Criticisms: harsh; does not honor the testator’s intent
D. Modern Trend Towards Fixing Mistake
a. Reformation of mistakes with clear and convincing evidence of: (1) mistake; and (2) the
grantor’s intent
b. Some criticism  where does it stop
c. Texas allows reformation; only the personal representative may petition, if:
i. Modification is necessary to prevent waste or impairment;
ii. The order is necessary or appropriate for tax objectives;
iii. For gov’t benefits
iv. The order is necessary to correct a scrivener’s error to conform to testator intent
E. Gifts in will
a. General gifts – “Devise of $100,000 to A”
b. Specific gift – “my car to A”
c. Demonstrative – money to be paid from a particular account; “the balance of my account

CAITLIN SULLIVAN_29
 at death”
d. Residue – what is left; “the remainder of my estate to A”
F. Lapse and Void Devise
a. Lapse occurs if a beneficiary is alive at will execution BUT does not survive a testator
b. Common law: a gift made by will is subject to a condition that the devisee survive the
testator; so, the gift fails; where does it go?
i. Common law lapse depends on the nature:
1. Specific  falls into the residue
2. General  falls in to the residue
3. Residuary  intestacy
a. This is the “no residue of a residue” rule
ii. Modern trend
1. Residuary  passes to other residue holders; if any, if none intestacy
a. Texas and majority follow this
c. Void devise  if the beneficiary is dead at the time the will is executed; or if the taker is
a dog or cat or otherwise ineligible
i. Disclaimer of devise (not a lapse);
ii. Purging statutes for interested witnesses
iii. Divorce invalidates devise
iv. Murder the testator
1. These pass like lapse
G. Anti-Lapse Statutes
a. Do not prevent lapse  they substitute beneficiaries
b. Anti-lapse statutes presume that a testator would want their gift to substitute to the
devisee’s descendants rather than pass with common law lapse
c. Texas  if a gift lapses, and the deceased is: (1) a descendant of the testator (T’s child
or grandchildren); or (2) a descendant of the testator’s parent (T’s brother or sister,
nieces or nephew), then shall be divided into the number of shares equal to the total
number of surviving descendants in the nearest degree of kinship to the devisee
i. Texas is a narrow anti-lapse statute
ii. The substitute done must have survive the testator for at least 120 hours
d. Generally, anti-lapse statutes do not apply to the donee’s: (1) spouses; (2) in-laws;
(3) step-children (unless adopted); or (4) friends
i. Some states have broad antilapse statutes
e. A class gift
i. Common law  a gift to a class does not lapse if a class member dies before the
testator, but does pass to the other class members.
1. Was the testator “group minded”
2. If group minded, passes to the other members of the class
3. Example: group minded if uses class labels like “to my nieces and
nephews” or “to A’s children”
ii. Modern trend  antilapse statutes may apply to class gifts if member was alive
when will was executed
1. Sometimes the court will take a broad view of a class
f. Words of Survivorship  “if S survives me”
i. If the will makes it clear that the gift is dependent on survivorship, lapse statutes
are inapplicable.

CAITLIN SULLIVAN_30
 g. And/or  to avoid a lapse problem court may treat “and” and “or” granting the property
to the or

H. Ademption by Extinction
a. Ademption by extinction – when the testator sells or gives the item away before death
b. Ademption only applies to specific devises
i. Does not apply to general, demonstrative or residuary
TEXAS FOLLOWS THE devises
IDENTITY THEORY OF ii. Identity-theory of ademption  a devise of a specific
ADEMPTION!! IF IT IS
GONE, THE GIFT WILL
piece of property will fail if that property is not a part of the
FAIL!!! testator's estate upon his or her death
1. “If the exact item is not in the estate, then the person loses it”
iii. Intent theory of ademption  when a specific devise is no longer in the
testator’s estate at the time of his or her death, the devisee will receive of a gift of
equal value if the testator intended them to take it
1. “What would the testator have wanted”
a. Example: testator leaves “diamond ring” to Bertha; ring is stolen
but insurance money; generally, would not intend for the money
to replace but maybe if the testator bought a new ring with the
money

CAITLIN SULLIVAN_31
 2. This is the modern trend; UPC view
I. Satisfaction
a. Easy to spot; occurs when the testator left a gift in the will but gave the beneficiary the
gift in their lifetime
i. Only applies to general and demonstrative gift
ii. Requires a writing
iii. Example: in the will, “I give my son $10,000”; but during lifetime, give $10,000
and writes a letter that says “during my lifetime, I gave my son the $10,000”
iv. Texas Rule: Devised property is considered satisfied if:
1. Will deducts lifetime gift;
2. Testator produces contemporaneous writing stating that gift is deducted
from the will; or
3. The devisee acknowledges in writing that the lifetime gift is in
satisfaction of the devise.
J. Exoneration of liens
a. If you give someone home but it is subject to a mortgage
b. Common law  a person that took property subject to a lien took free of the lien
c. Modern trend  takes subject to the lien
i. Texas rule too
K. Stock
a. Modern trend  if it represents the same ownership interest (stock spilt or stock
divided), then the beneficiary will get it
i. Example: if you have 100 shares in ABC stock when drafting the will but by
stock spilt or divided it is 200 shares at death, the beneficiary will take
b. Texas  no cash dividends
L. Abatement
a. When there is not enough property in the estate to give the gifts
i. Example: I give $100,000 to A; $100,00 to B; $100,000 to C but there is not
enough
b. We abate in this order:
i. Anything going by intestacy;
ii. Residue abates;
iii. General requests;
iv. Specific request.
c. In each category, abate personal property first and then the real
d. Won’t apply to a secured claim  creditor just takes
e. Can change abatement in will
f. Abate the same kind of gift pro rata
i. Same type of gifts are abated pro rata
ii. $10,000 to A; $6,000 to B; $4,000 to C
1. But only $10,000 in the estate
2. So pro rata ends up, $5,000 to A; $3,000 to B; $2,000 to C

CAITLIN SULLIVAN_32
Ademption by Where the property changes after the will is done (property no longer exists, has been sold,
extinction lost, destroyed etc.)

Only applies to specific bequest, not general not demonstrative, not residue. Depends on if
you’re in an identity theory state or intent theory state.

Identity theory state-if not exactly same item, it’s gone

Intent theory state-look at what the T would have wanted (replacement car?)

Ademption by General bequests only; applies when have a writing; giving you $250k to sub for what I
Satisfaction gave you in the will originally

Stock Leave 200 shares of ABC stock, then when dies, have 400 shares, or now have diff due to
merger, the percentage of ownership has not changed and beneficiary gets all (stock
dividends, not cash dividends)

Abatement Usually cash gifts; If the estate does not have sufficient funds to pay all bequests, we abate.

If any property passing by intestacy we abate that first.

Pro-rata share to a class

Residue abates next (personal then real), general abates next (personal then real), specific
abates next (personal then real).

Exoneration of Modern trend-Leave someone something subject to a lien, they take subject to the lien; at
liens C/L, took free of the lien

XI.
Introduction to Trust Concepts
A. Trust Historical Background
a. Statute of Uses
i. English common law (1536)
ii. Created the “possibility” of a modern trust
b. After WWII
i. Trust use expanded
ii. Trusts  separate legal and equitable title
iii. The nature of family wealth changed; technology advanced;
iv. Now, people tend to hold their wealth in personal property or some investment
real property
v. The trust code is more modernized than the estate’s code
vi. In the trust code, tend to follow modern trend
1. Not as much “common law” because it is just newer

CAITLIN SULLIVAN_33
 B. Types of Trusts
a. Inter Vivos  designed to establish during lifetime
b. Testamentary  in wills
c. Oral  not for real property
d. Written
e. Revocable  most trusts are revocable
f. Irrevocable  usually used for (1) tax reasons; or (2) spendthrift trusts
g. Express
h. Implied
i. Most trusts if they are written, they are express
j. The first issue is to classify the trust
C. Purposes of Trusts
a. For individuals that cannot manage things on their own:
i. Incompetent;
ii. Age;
1. Testamentary trust for the benefit of minor children
a. If the parents die while the children are young
2.
b. Discretionary spouse or surviving spouses or children
i. Want to
c. Generation skipping trust FIRST STEP FOR TRUST
i. Setting a trust for the grandchildren as opposed to the children ANALYSIS: Identify: (1) the
settlor; (2) the trustee; (3) the
ii. If you have a taxable estate, this is crucial beneficiaries’; and (4) the corpus
D. Trust Elements
a. (1) settlor, trustor, grantor  the person creating the trust
i. Two ways to create a trust:
1. Deed of trust  written transfer to another
Two ways to create a trust: a. Owner gives A an document  “Blackacre to Alice as trustee, to
(1) written transfer to another; or hold for the benefit of Owner”
(2) declaration of trust (settlor
alive and holds the property) i. Trustee  Alice
ii. Owner  beneficiary
iii. Deed of trust  Alice is trustee
iv. Inter Vivos (Owner is conveying during life)
b. THIS IS NOT NECESSARILY REAL PROPERTY
2. Declaration of trust  if the settlor is alive, declare you hold the
property in trust
a. Owner states  “I hereby hold by 1000 shares of Exxon stock fo
the benefit of my children”
i. Trustee  Owner
ii. Children  Beneficiary
iii. Oral
iv. Declaration of trust  Owner is trustee
v. Inter Vivos (Owner is conveying during life)
ii. If real property, must be in writing
iii. Settlor can also be trustee and beneficiary
1. BUT SETTLOR CANNOT BE THE ONLY BENEFICIARY
a. Example: “I hold Blackacre for the benefit of myself”

CAITLIN SULLIVAN_34
 i. Impermissible
b. Example: “I hold Blackacre in trust for the benefit of myself for
my lifetime with the remainder to Bob”
i. This is permissible because there is another beneficiary
besides settlor
b. (2) trustee  holder of legal title
i. Have legal title to the property but are managing the property for the
beneficiaries
ii. Can be an individual; institutions; multiple people; a Board; an institution AND
family members
iii. Usually when the trust is established, you name the trustee
1. But if you do not have a trustee, the court will appoint one
2. “A trust will never fail for the lack of a trustee”
iv. Have powers and duties
1. Powers  can sell property in the trust; buy new property within the
trust; mortgage; rent; sometimes make gifts; broad powers
2. Duties  loyalty to the beneficiary; to act prudently; inform
beneficiaries; impartiality; no commingling
v. Functions
1. Custodial  the custodians of the property; gather it; keep track
2. Administrative  manage property
3. Investment  depending on the corpus; if stocks, bonds, they have a
duty to invest
4. Distribution  trustee has a duty to distribute to beneficiaries
c. (3) beneficiaries  holders of equitable title
i. Usually the “whole purpose” of the trust
ii. Have to be identified
iii. Can be: individuals; institution (hospital, church); group of people (descendants)
iv. Trusts are where future interests exist at modern day
d. (4) corpus  contents of the trust
i. The trust needs “something” in it; have to have a corpus
ii. Can have an empty trust waiting for corpus but needs to be defined
1. Example: an unfunded life insurance trust
a. Does not become active until death but the vessel is waiting
E. Trust v. Legal Life Estate
a. Trust: O conveys Blackacre to T in trust to A for life, remainder to B
b. Life Estate: O conveys Blackacre to A for life, remainder to B
c. Trusts are a better option:
i. If the life tenant cannot maintain, he trustee could sell the property:
1. The trustee will allocate sale proceeds to the life tenant and to the
remainderman
ii. The trustee can reinvest
iii. But if you are a life estate holder, you cannot sell the property without the
permission of the remainderman
iv. Trustee can lease; mortgage; pay for maintenance or repairs; expenses; creditors;
prevent waste
v. Without a trust, the life tenant has to manage everything but does not have the

CAITLIN SULLIVAN_35
 powers a trustee does (like sale or mortgage; need the permission of
remainderman)
F. Miscellaneous uncovered topics:
a. Business trusts  mutual funds; assets securitization (mortgage trust); pension plans
b. Foreign trusts (widely used but not for families)
G. Creating a trust
a. Intent
i. Do not need explicit language (but preferred)
1. No particular needed words
ii. A trust can be implicitly created
iii. Actions can imply creation of a trust
iv. Do not need a trustee or trustee duties
1. The state statute will provide generic trustee powers and obligations
b. Precatory language  is different than creating a trust
i. Example: in will, “I would like my piano to go to my grandchildren”
ii. This is not a trust; a trust needs to impose responsibilities to trustee
c. See Jimenez v. Lee – daughter sues her father over a “small” amount of money
i. Father received gifts for his children’s education
1. Daughter says he did not
ii. Father says he is not a trustee  gifts were for the “general benefit” of minor
child
iii. If the Father is a trustee, he a has a fiduciary duty to keep records for what he
spent the money on
iv. SOL does not begin to run until she is an adult and discovers the breach
v. Court says this was a trust
1. But Mather says this could probably have gone either way; “implicit
trust”
2. The gifts said, “giving this for the children’s education”
d. The Uniform Transfers to Minors Act
i. In property code but can be a portion of estate plan;
ii. Can use the property for the general benefit of the minor; minor does not possess
until they are 21 years old
H. Revocable/Irrevocable Presumption
a. Majority  any written trust is revocable, unless there is a provision to the contrary
i. Texas now falls within this viewpoint
b. Minority  trust is irrevocable, unless provision to the contrary
I. Statute of Frauds
a. In Texas trust must be: (1) in writing; (2) contain the terms of the trust; and (3) be
signed by the grantor
i. Exception  (1) trust for personal property (2) and: (a) transfer to trustee
who is not grantor or settlor and intent; OR (b) declaration of trust by grantor in
writing (I hold for someone else)
ii. Texas is limiting the ability to have an oral, enforceable trust
1. Need personal property AND (a) transfer to someone else with intent to
create; or (b) “some sort of writing” saying it is held as trustee even if
they are the beneficiary
J. Corpus/Trust Property

CAITLIN SULLIVAN_36
 a. Anything can be a corpus
i. Real property; stocks; bonds; cash; patent; maybe future possible earnings
b. See Unthank v. Rippstein
i. Decedent sent a letter to Iva which says he will pay her $200 a month and binds
his estate
ii. Court says:
1. Not a will  no testamentary intent
2. Not a trust  there is no “pot” of money left; no corpus
iii. A modern court  this would probably be either a will or a trust to honor intent
K. Constructive and Resulting Trust
a. Despite terms, they are not trusts;
b. They are equitable remedies that arise by operation of law
c. Resulting Trust
i. An equitable remedy imposed when an express trust fails
ii. Arises when:
1. Trustee has no continuing fiduciary obligation; or
2. The property or the obligation is no longer present.
iii. Also called a “trust by reversion”
iv. Example:
1. O conveys property in trust to T for A for A’s life
a. O is the settlor; T is trustee; A is beneficiary
2. A dies; T must return money to O
3. The trust has failed
4. The trustee must return the money to O
d. Purchase Money Resulting Trust
i. Another example of a resulting trust; this is also a remedy
ii. Purchaser pays price for property; but title is taken in the name of another
iii. The person is not a natural object of the original owner’s bounty
iv. Example:
1. O purchases Blackacre, but conveys to B, who is not a natural object of
O’s bounty
2. Doctrine says “must have caused her to get title because she was
Two types of resulting trusts:
supposed to be a trustee”
(1) by reversion; or (2) purchase 3. A rebuttable presumption arises that B
money resulting trust. took title as trustee for the benefit of O
a. Can show that B was meant to have title
4. O paid for it; B has legal title; but B is not a natural bounty
a. Only applicable if the B is not a natural object of bounty
e. Constructive Trust
i. An equitable remedy by which a court recognizes that a claimant has a better
right to certain property than the person who has legal title to it; the individual
with the legal right holds the trust for the other
ii. Imposed when it is wrong to allow the person who holds property retain it
1. Example  Slayer Rule
iii. Elements of Equity Created Constructive Trust:
Constructive trust elements 1. Confidential or fiduciary relationship between the parties
(1) confidential or fiduciary
relationship; (2) an express or a. Will testator and will beneficiary meets this
implied promise by the
transferee; (3) a transfer in
reliance; and (4)unjust CAITLIN SULLIVAN_37
enrichment
 2. Promise (express or implied) by the transferee who now holds the
property
a. Slayer Rule  implied promise that I am not going to murder
you to get the property sooner
3. A transfer in reliance on the property
a. Sometime the title holder does
4. Unjust enrichment on the transferee
a. Important element
iv. Often imposed; the title holder typically “does something” that lead to them
getting the property and they should not have
L. Beneficiaries
a. A trust: (1) needs beneficiaries and (2) they must be definitely identified
i. Exceptions:
1. Charitable trust  can have a trust for looking for cures for cancer
a. No definite beneficiary but still valid
2. Honorary trust  trusts for the care of the grave/plot or pets
b. People who are unborn or unascertained may be beneficiaries
i. But the beneficiaries must be defined when the trust is effective
ii. Example: testamentary trust for grandchildren; need grandchildren at death but
not when created
c. Definite versus indefinite classes
i. Definite:
1. My grandchildren;
2. My employees that work for me at the time of my death;
3. My children.
ii. Indefinite or Ambiguous:
1. “Loved ones”
2. Students;
3. Friends;
4. Neighbors;
d. Need to be able to identify who the beneficiaries are
e. If the settlor wants an “open ended” end:
i. Either make a precatory (I would like this to happen);
ii. Give the property to the trustees and if they wish make the distribution
iii. Put it in a will specifically;
f. Honorary trust
i. Not usually enforceable but exceptions are for pets or care of a grave
ii. See In re Searight’s Estate
1. There was a specific pet named (Trixie)
2. A legitimate purpose to care for Trixie
iii. Modern trend  pet statutes; pet trusts
1. Most states today have a specific statute allowing a trust for pets
2. Texas does have this
3. Allows to leave pet in the care of another;
a. Reasonable amount of money;
b. Reasonable length of time;
4. Can define food; vet bills;

CAITLIN SULLIVAN_38
 5. Can have a trustee and a caretaker;
a. Separate trustees for the money and caretakers
6. When the pet dies, if there is any money left, there must be a gift
over for the remainder
7. There is an increasing desire for clients to care for the needs of their pets!
M. Requirement for Trusts in Writing
a. Oral Inter Vivos Trusts in Land (ordinarily not valid)
i. “An oral agreement to create a trust in real property”
1. ORDINARILY NOT ENFORCEABLE
ii. O conveys Blackacre to X (as trustee) with an oral agreement that X will pay the
income to A for life, then to B
a. This look like just a title passes; but this is an oral agreement
b. This violates statute of frauds and is void
c. Exceptions:
Circumstances to enforce oral, i. Should we impose a constructive trust?
Inter Vivos trust for real ii. States differ
property: (1) trustee obtained by
fraud or duress; (2) trustee and
iii. Generally, a constructive trust is imposed if:
settlor and in a confidential or 1. Transfer from settlor to trustee was obtained
fiduciary relationship; (3) settlor by fraud or duress;
made transfer on deathbed
2. When trustee (X) and settlor (O) where in a
confidential or fiduciary relationship;
3. Settlor made transfer in anticipation of death
2. Examples:
a. O transfers Blackacre to X, and there is an oral trust that X will
pay the income to A for life, then to B; X refuses to comply,
takes Blackacre for themselves
i. O and X strangers: no;
ii. O and X are neighbors: no;
iii. Husband and wife: fiduciary relationship, yes.
iv. X is O’s attorney: fiduciary relationship, yes.
v. O transferred to X on deathbed: yes.
vi. X forced to make transfer: yes.
vii. X lied to O about the transfer: yes.
iii. See Hieble v. Hieble (a classic example)
1. Example of transfer of Inter Vivos “trust” in land
2. Mother has cancer and believes she is going to die
3. Mother transfers title from herself alone to herself, daughter, and son
each in 1/3 interest
4. An oral agreement that is it temporary
5. Not exactly a trust; but the son and daughter agree that their 1/3 interest
would be conveyed back to mother; mother does not die; daughter
conveys her interested back; son does not transfer back
6. Court imposed a constructive trust even though it was an oral, Inter
Vivos transfer of real property
a. Confidential relationship met
b. Mother was vulnerable; worried about cancer
c. Arguable that the mother made the transfer in contemplation of

CAITLIN SULLIVAN_39
 death
b. Oral Trust to Dispose of Property at Death
i. Under the statute of wills and frauds, wills are supposed to be in writing
ii. But is an oral trust to dispose of property at death proper
1. See Estate of Fournier
a. Decedent (George) orally gives $400,000 cash (personal
property) to a friend to give to sister (Faustina) a death
b. Tells Faustina, tells another sister (Juanita), tells niece;
c. In flux, George composes a will; Faustina is executor
d. When George dies, Juanita says $400,000 was supposed to go to
both
e. Court says oral testimony was clear it was for Faustina
f. Court uses equity to enforce oral trust that is not otherwise
enforceable
g. Note: there was a holographic codicil and Faustina did not get
the money;
h. In certain circumstances, courts will impose an oral direction
in a trust to pass property at death
i. Limited to cases where the court thinks equity demands it
N. Secret and Semi-Secret Trusts
a. Do not arise often
b. See Olliffee v. Wells
i. Decedent leaves property in her will to Rev. Wells as trustee
ii. Decedent expressed she wanted property distributed to the needy
iii. Will said: “I leave the property Reverend Wells to distribute according to the
terms I expressed to him during my lifetime”
iv. This is a semi-secret trust
v. Violates the Wills Act; must contain the terms of the trust
vi. In England, would have enforced as constructive trust but not in Massachusetts
c. Semi-secret trust – the existence of a trust and the trustee are disclosed in the will,
but not the terms or the beneficiaries
i. In general, semi-secret trusts are not enforceable
d. Secret trust
i. Secret trust – neither the existence nor the terms are disclosed
ii. Harder to prove; but enforceable if proven
1. The discussion is only between a decedent and an individual that the
decedent left property to; if the other person dies existence, even harder
iii. American view  will enforce a secret trust as a constructive trust but not a
semi-secret trust
1. Has not been tested in modern times
2. Criticized as a rule
3. In practice, probably not going to be enforced

CAITLIN SULLIVAN_40
 XII.
Non-Probate Transfers

A. Non-probate Transfers Look and Act like wills at death but are not governed by the law of wills
a. Examples: life insurance; pensions; POD accounts; TOD accounts; joint accounts;
revocable Inter Vivos trusts
b. Will substitutes are so common that virtually all property can pass at death without
a will or probate
c. The non-probate revolution  these substitutes have “taken over”; everyone should still
have a will but these substitutes may prevent probate
B. Pure will substitutes  identical to wills in that they can be altered in lifetime
a. Example: insurance policy designation can be altered until the decedent dies
b. They are ambulatory and modifiable
i. They follow the decedent and allow the decedent to change
C. Imperfect will substitutes  common law joint tenancy
a. Can be severed at any time and the transferor cannot revoke
D. Why use?
a. Avoid probate
b. Trust law is more flexible than the Wills Act
i. Do not need two witnesses
ii. No notary
E. Revocable Inter Vivos Trust
a. Revocable Inter Vivos Trust  “newer” device used to transfer property at death
b. Commonly used will substitute
c. Often used by people with complicated estate plans and assets
d. Transfer property into living trust and hold property for themselves as trustee
i. At death, designate a successor trustee and where the property goes
e. Revocable inter vivos trust elements:
i. Settlor  settlor;
ii. Settlor  trustee;
iii. Settlor  can be one of the beneficiaries; but cannot be the only one
iv. Corpus  depends
f. See Farkas v. Williams – credited with “creating” inter vivos trust
i. Farkas employed Williams for many years;
ii. Farkas purchased stock and took title as trustee for Williams
1. “Farkas, as trustee, for Williams”
iii. Farkas retained rights: dividends; sell the stock and terminate; proceeds of the
sale of the stock; to change beneficiary; to revoke
iv. Courts could not determine if this was an illusory construct; Farkas was allowed
to “do whatever” he wanted with his property and only at his death would the
property transfer
1. It was “like” a will; but did not follow formalities
v. Court said this is valid  it is possible to have an estate plan in the manner
vi. It was a controversial decision:
1. Does William have any interest?

CAITLIN SULLIVAN_41
 2. Are we violating Wills Act?
e. Today all states allow inter vivos revocable trusts  VERY COMMON
f. If an inter vivos trust  presumed to be revocable
i. Majority view
1. Texas is here
ii. Minority  presume it is not
g. Most revocable inter vivos trusts are in writing
i. Do not have to be; unless real property
ii. If the trust is in writing  revocation, amendment or modification must be
in writing
1. Texas view
h. Can a will revoke a trust?
i. Controversial; a lest one Texas case that did permit
ii. Not the best method; should have a separate document that revokes the trust
i. Other terms: living trust; Dacey trust (uncommon term);

Advantages Disadvantages
 Probate is public record; revocable
inter vivos trusts are not (can be kept  People think they are escaping estate
secret) taxes with trusts  they are not
 A lot of people there is “no reason” to  Mather says people get “scammed"
be revocable inter vivos trust o Lawyers may charge more

j. Fulp v. Gilliand – a beneficiary of a revocable trust has no legally enforceable

interest while the trust is revocable
i. Mother transferred her farm into a revocable inter vivos trust for her benefit; her
son; and her daughter
1. Settlor  Mother
2. Trustee  Mother
3. Beneficiaries  Mother; daughter; son
4. Corpus  farm
ii. Mother sells farm to son below FMV; daughter sues and argues mother violated
fiduciary duties
iii. Court says no  Mother was acting as a settlor, not trustee
iv. The beneficiary has a mere expectation rather than a cognizable right
v. This is the majority view
k. Construction of Revocable Inter Vivos Trusts
i. Impose same construction concepts as trusts:
1. Lapse (pg. 30);
2. Pretermitted children;
3. Advancements (pg. 16);
4. Class closing;
5. Abatement (pg. 33);
6. Ademption (pg. 33).
7. Undue influence (pg. 27)
8. Capacity (pg. 26)
9. Insane Delusion (pg. 27)

CAITLIN SULLIVAN_42
 10. No Contest Clauses (pg. 28)
ii. Texas and most states apply this
iii. A change in the law but most states are moving in this direction
iv. See Patterson v. Patterson
1. Mother creates a family trust, she may use during her lifetime, at death to
her children
2. Applied will doctrine of substantial compliance (pg. 21)
3. The mother could remove her son and did not have to revoke the whole
trust
l. In general, creditors can reach assets of revocable inter vivos trust
O. Pour Over Trusts and Wills
a. Trust  bowl
b. Trustee  chef (stirring)
c. Settlor  inserted ingredients
d. Beneficiaries  get the cookies
e. If you have an empty trust, you can pour assets in from the will into the “bowl”
f. Or can have assets in a trust, and can pour into the will
i. When I die, the assets in the trust are distributed according to the will
g. The purpose is to consolidate estate plan; everything will pass under either the trust or the
will
i. This is a flexibility device
h. See Clymer v. Mayo – Decedent and Husband are married 20+ years; Decedent creates
two trusts – Trust A; Trust B
i. Trust A gets 50% of the estate to H; Trust B gets the rests, mostly to H, remainder
to D’s nieces and nephews for 30 years, then to two universities
ii. Nothing is in either though, each will get will, life insurance, pension
iii. D and H get divorced
iv. Decedent dies; parents are heirs
v. Court says  trusts are valid even though they are empty; this was not
established until like the 70s
vi. Trust A was solely for the benefit of the husband  it terminated at divorce
1. Upon divorce, provisions in favor of the ex-spouse are stricken
vii. Trust B was to H for life, then nieces and nephews for 30 years, then universities
1. Husband is stricken; but nieces and nephews meant husband’s nieces and
nephews too
i. All states allow pour over trusts and wills by statute  including Texas
j. Differs from a testamentary trust
i. This a pre-existing trust; a testamentary trust is in the will itself
ii. This differs because the trust is “sitting there”
iii. It can be empty or not
iv. Empty  pouring the will into the trust
v. With something in it  pour the trust to the will
F. Life Insurance
a. Not life insurance  death insurance
i. Life insurance generally protects family members by replacing lost income
ii. The “hope” is that you do not die or need it!
b. Term life insurance

CAITLIN SULLIVAN_43
 i. Cheaper; purchase it and it pays if you die
ii. No savings aspect; pay a monthly fee and if you die, the estate recovers
iii. Tends to be purchased by younger families
c. Whole life insurance
i. Has a savings aspect + term life aspects
ii. If you die, it pays out but also a savings or investment aspects
iii. Get “paid up” when the amount that has been paid in the investment covers
premiums
iv. More whole life is paid
1. Commission is higher; it honestly “better off”
d. Pay out
i. Lump sum  paid to beneficiary of estate in face valid of policy
ii. Annuity  pay a portion to the beneficiary every year for a time period
iii. Interest only for years  if the beneficiary does not need the funds; take the
investment return
iv. Income plus principal for a period of years  similar to interest only for years
v. Annuity, interest only for years, income plus are examples of spacing out the
payment; beneficiary makes the decision
G. Can you alter non-probate transfers in a will?
a. Generally, no  must alter directly with the company that holds the item
i. With bank accounts  must change in back
ii. With pension  must change with pension
iii. Why? These are K relationships
b. See Cook v. Equity Life Assurance Soc
i. His ex-wife was named as beneficiary to life insurance policy
ii. Decedent executed a holographic will giving the life insurance to his spouse
iii. Valid? No
1. Needed to alter with life insurance company!
2. Note: today the life insurance policy to the ex-wife would have
terminated upon divorce (so different result here today)
iv. But  Ks control Ks; wills control wills!
c. Proposals that would allow this action but have been opposed
i. The banking and insurance companies are opposed; want to rely on K
H. Pension Accounts
a. A lot of people rely on pension accounts for estate planning and retirement
b. Generally, people no longer rely on their children to care of them in their old age
i. Pension plans are increasingly important
ii. Life expectancy rose; people expect to live longer after retirement age
iii. Gov’t has encouraged people to invest for retirement:
1. Contributions are tax deferred  If you contribute to tax qualified
pension plan, do not pay income tax, pay tax when receive
2. Earnings are tax deferred  do not pay taxes as earnings grow on
plan, only when you receive
3. Distributions are at lower tax rate  income level decreases at
retirement, so when you distribute, it is taxed at a lower rate
iv. At retirement, we no longer pass to children; we use our wealth during lifetime
(this is a big shift)

CAITLIN SULLIVAN_44
 c. Defined Benefit Plan  most gov’t employees
i. Work for thirty years, make X dollars; upon retirement you will get X dollars
from retirement age for the remainder of your life
1. Form of an annuity
2. If you live a long time  get a lot
3. If you die shortly after  you “lose”
ii. If the individual is married and receives a defined benefit, most often will be
paid to spouse upon holder’s death
d. Defined Contribution Accounts  private employees
i. Majority of companies offer these
ii. Employee and employer contribute to retirement plan and there is a viewable
“fund”
iii. The employee often has input how to manage
iv. At retirement, there is a “pot” of funds to use
1. Can invest; can purchase an annuity; can spend it
v. If there is any money left upon the holder’s death  lump sum transfers to the
pension beneficiary
1. If you are married, the beneficiary has to be your spouse unless your
spouse waives!!!
e. Payout options
i. For annuities, joint survivor annuity if the parties are married; this protects
spouses
1. This is governed by federal law – DO NOT WANT SURVIVING
SPOUSES ON WELFARE
2. Why? If the husband was sole breadwinner, upon retirement could elect
single annuity or joint survivor; couple would elect for single because it
was higher; then husband dies earlier and the wife is left without
resources
3. Joint annuities tend to be a lower amount
F. Pay on Death or Transfer on Death Account
a. “Uncommon” but available under Texas and most state laws
b. Account or assets automatically transfer to designee
i. Works for bank accounts; brokage accounts; stocks;
c. Passes under K law
d. Generally, cannot alter under will must do with company that holds
G. Transfer Bank Accounts at Death
a. Make deposits directly into donee’s account
i. Gifts; making deposits into your children’s bank accounts
b. Totten trust
i. “Victoria Mather in Trust for Katherine Mather”
ii. “Uncommon”
iii. Permitted in all states
c. Joint Accounts
i. Issue  is a true joint account or a convenience account
1. True joint account  both parties put money in and take it out
a. FUNDS GO TO REMAINING JOINT TENANT
2. Convenience account  only one person deposits into account; the other

CAITLIN SULLIVAN_45
 account holder is there for convenience
a. Maybe to pay bills; make arrangements
b. Common for elderly people with caretakers
c. FUNDS IN ACCOUNT GO TO ESTATE OF DECEDENT
d. See Varela v. Bernachea – decedent put girlfriend on bank
account as joint tenant with right of survivorship
i. Presumption is in favor of joint tenant
ii. There was not enough to rebut
iii. The girlfriend wrote checks; deposits into account;
decedent agreed that she could use money for an
investment
H. Transfer on Death Deeds and Ladybird Deeds
a. Ladybird deeds
i. Essentially an “enhanced” life estate
ii. Allow you to pass real property to another and retain a life estate
1. This was impermissible at common law
iii. Texas allows
iv. Grantor can mortgage property; lease property
v. The only difference is at death transfers to designated remainderman
vi. Can be executed by someone with a power of attorney
b. Transfer on Death Deed
i. Very similar to Ladybird deed; “enhanced” life estate
ii. Permitted in UPC; Texas Code
DISTINCTION  Ladybird iii. Modern trend
deed can be completed with a
POA; TOD need to have
iv. Operates similar to Ladybird Deeds
capacity to execute 1. Grantor can use and enjoy property completely during lifetime; can sell,
lease, etc.
2. Upon the grantor’s death, transfers to designated remainderman
v. Grantor needs capacity
I. Joint Tenancy
a. Can hold property in joint tenancy with another
b. Creates a permanent interest in property and gives the joint tenants equal interests
i. At common law
c. If a joint tenant dies first, the other joint tenant takes the whole
i. The property passes to the survivor automatically at the death b
ii. Whether real or personal property
d. Creditors of the decedent have no interest in the joint tenancy property
i. The interest terminates and becomes the survivors
ii. If held another way, the creditors may have an interest
J. Gifts
a. Another way to avoid probate; less optional method
b. Inter vivos gifts – made during lifetime with no anticipation of death
c. Causa mortis –deathbed gifts given in anticipation of death
d. Gifts are permanent; they cannot be revoked
e. Elements: (1) intent to make a gift; (2) delivery (can be actual, constructive, or symbolic);
(3) acceptance (presumed); and (4) capacity (also presumed)
f. Most gift cases hinge on delivery

CAITLIN SULLIVAN_46
 i. Actual – preferred; but not always possible
A gift can be used as a will
1. Example: for a car, giving the donee the keys, signing the title over, and
substitute, but it is not the physically driving the car to the donee and giving them it
best option! ii. Constructive – usually effective
1. Example: for a car, giving the keys to the donee and signing the title over
but not actually delivering the car
iii. Symbolic – usually ineffective
1. Example: for a car, giving the donee a picture of the car
g. See Scherer v. Hyland
i. Decedent endorses a check in blank with a note that it is for him then dies by
suicide
ii. Issue  is this proper delivery
iii. The court said this was okay delivery
K. Planning for Incapacity
a. There are healthcare decisions and “everything else,” like property
b. Directive to Physicians
i. Also known as a living will
ii. A document that you signed that indicates whether you want “extraordinary
measures” taken to keep you alive in the event you are rendered into a persistent
vegetative state
iii. Tells health care providers if this is your wish
c. Durable Power of Attorney for Healthcare
i. Assigns to a person (family member; spouse; friend; parent) the ability to make
healthcare decisions for you when you cannot
1. Example: if you are under anesthesia
ii. This is a form
d. Durable Power of Attorney for Property Issues
i. Allows someone to make decisions for you affecting your property
ii. Intent  to spring out at incapacity of the principal but today POAs can exercise
powers even if the principal has capacity
1. Effect is that it is broader
iii. Form in the estate’s code
1. Lists abilities if you hold POA
2. Can limit what your POA can do or authorize a general POA
3. Protects: (1) good faith attorney in fact (the person acting on behalf of
the principal); and (2) people that rely on the power
iv. Often used in lieu of trust but a trust is a better option

POA Trust
 Cheap and easy to use
 Ceases to exist at principal’s death  Trust continues even if settlor has died
 Does not avoid probate  Can avoid probate (particularly
 POA holder cannot do anything after revocable inter vivos trust)
principal dies  Trustee can continue action
 If the POA holder (attorney in fact)  Can name a successor trustee
dies, power terminates  Have to accept trustee action because
 Banks, brokers, etc. are skeptical of trustee holds legal title

CAITLIN SULLIVAN_47
 POAs
o Supposed to accept but do  Law is established
not always
 Law is less clear; why third parties
are weary

L. Disposition of Body at Death

a. Burial; cremation; donation
b. People should indicate how they want their body handled at death
i. Not just the estate lawyer
ii. Sometimes the body is handled before an attorney is even involved
c. The United States viewpoints on donation
i. Must consent to donate the decedent’s body parts
ii. If the individual does not execute paperwork before death, the family will make
decision
iii. Prohibits the sale of body parts at death
1. The United States objects to the idea of sold body parts;
2. Do want families to “pull the plug too soon”
3. Could make organ donation expensive and unattainable
d. Many European countries presume consent for donation
i. If the person has died and has not affirmatively rejected donation, their body
parts will be donated provided they are a viable option
XIII.
Family Protection
A. Marital Property versus Separate Property
a. Martial property  common law system; title system
i. Historically, if your name is on the title, it is your separate property
ii. English system
b. Community property  civil law system;
i. Southwestern and Western United States
1. Texas; California; Arizona; New Mexico; Idaho; Nevada; Louisiana;
Washington; Wisconsin (statutorily adopted); Alaska (choose at
marriage), South Dakota (choose at marriage), Tennessee (choose at
marriage)
ii. Philosophy  marriage as a partnership
iii. If you acquire property after marriage, except by gift, devise, or inheritance, it
belongs to the community
iv. The community owes in undivided 1/2 interest each spouse
c. The surviving spouse has two issues
i. The right of the surviving spouse to support when their partner passes;
ii. The right of the surviving spouse to share property when their partner passes;
1. There is overlap; BUT THESE ARE DISTINCT IDEAS
B. Elective Share or Forced Share
a. Separate property states use elective share
i. All separate property states have elective share besides Georgia
b. Surviving spouse has the ability to elect to take against the will

CAITLIN SULLIVAN_48
 i. Statutory guaranteed minimum share
ii. Usually between 1/4 and 1/2 of the estate
1. A lot of variety across the states
2. No majority; historically starts with a 1/3 from the idea of dower
3. Some states could only offer a life estate
c. Example: H is the sole breadwinner and owns all property, stock, everything; upon his
death, he leaves all property to his daughter not W (disinherits W)
i. W has the option to elect to take against the will
ii. Can take whatever portion of the property the statute allows
1. But in a community property state, the W already owns all 1/2 of the
property regardless of whose name is on it
2. The H would be free to dispose of his 1/2 interest as he wishes; the W
still retains her 1/2
3. The H’s 1/2 would go to daughter (1/2 of house; 1/2 of stocks, etc.)
4. Some community property states also have elective share (not Texas)
d. Policy  we do not want the surviving spouse to be destitute after the spouse passes;
recognize a property interest and treat marriage as a partnership
e. Does not apply to unmarried couples
f. Could apply to common law marriage or putative spouse
g. Uniform Probate Code criticisms:
i. The elective share is the same regardless of the length of the marriage;
ii. “Widow’s share”; emphasizes that women are dependent (does not reflect
modern marriages)
iii. If the non-breadwinner spouse dies before the breadwinner, the breadwinner can
leave all property as he wants (wife’s interest dies with her)
iv. Does not cover non-probate assets
1. Only can take against the will;
2. Your spouse could get around elective share for non-probate assets like
joint tenancy, POD account, insurance beneficiary designation, etc.
C. Modern Uniform Probate Code Elective Share Model
a. Not a majority view; but some states have adopted (not Texas)
b. Significant adaptation to elective share
c. Sliding Scale Elective Share  the percentage of elective share increases as the length of
the marriage
i. One year: 3%
ii. Three years: 9%
iii. Ten years: 30%
iv. Fifteen years: 50%
1. Becomes “fully vested” at fifteen years because this is the maximum
percentage
d. Provides a minimum share for surviving spouse  surviving spouse gets minimum of
$50,000
i. The surviving spouse gets this minimum in the event they are disinherited
e. Augmented estate  add probate and non-probate assets and exercise elective share
against this pot
i. Similar to the concept of hotchpot
ii. Example:

CAITLIN SULLIVAN_49
 1. H and W have been married 25 years; H disinherits W. W is entitled to
50% under modern approach!
Important: the surviving
a. 100,000 in probate estate to A
spouse’s property is b. 150,000 in non-probate to various others (not W)
considered in the augmented c. 25,000 life insurance payable to W*
estate!
d. 50,000 of H’s joint tenancy (W has right of survivorship)*
e. 75,000 of W’s separate property*
f. 50,000 W’s joint tenancy interest*
2. Add up all property OF BOTH SPOUSES
a. $450,000 in augmented estate
b. W is entitled to $225,000 (50% of elective share)
c. W already has $200,000
i. $75,000 in separate property;
ii. $200,000 in life insurance funds;
iii. $100,000 full joint tenancy
3. Wife will take remaining $25,000 pro rata from both estates
a. Only calculated against what she does not already have
b. Here  she already has everything starred; only pro rata
against $100,000 and $150,000
iii. Augmented estates treat the parties are partners and considers the property of
both spouses
iv. Also addresses criticism that non-probate assets would escape probate
D. Waiver of Elective Share
a. Can waive elective share during marriage or before marriage
b. Often arise in prenuptial agreements
i. Conflicting views among the United States for the requirements of a valid
prenuptial agreements
c. Ideally prenuptial agreements would contain:
i. Usual standards;
1. Treating the parties fairly;
2. Should not represent both parties (an inherent conflict).
ii. Full disclosure of assets by both parties;
iii. Opportunity for independent advice
1. There is ample time between the time the prenuptial agreement is
proposed and the marriage to seek independent counsel
2. Cannot present the prenuptial agreement the day before
iv. Avoid duress and pressure
1. Varies from state-to-state
2. Example: presenting the day before would likely be pressure
v. Fairness
1. Some states require that the agreement have “fairness”
2. Other states do not care so long as the parties freely agree to the terms
d. For waiving an elective share:
i. Not complicated; the spouse-to-be must understand the value of what they are
waiving
e. Texas Premarital Agreement Act
i. Less strict;

CAITLIN SULLIVAN_50
 ii. Requires: (1) that the agreement is not “unconscionable” at the time it is signed;
and (2) full disclosure of assets.
E. Community Property
a. Eight states have community property; few others have by choose at marriage
b. Community Property with Right of Survivorship
i. Can own community property with automatic right of survivorship, which is
a non-probate asset
ii. Texas allows
c. Each party to the marriage owns an undivided 1/2 interest to all property acquired
during the marriage by virtue of the effort of the parties
i. Earnings; income;
d. Any property owned prior to the marriage or obtained by gift, devise, or inheritance
is separate property
e. Can convert separate to community and vice versa
f. At death, each spouse can dispose of their undivided 1/2 interest in their will
i. Can also dispose of separate property in will
g. Management of Community Property
i. States vary: (1) manage community property together; (2) either party can
manage; (3) can manage personal property separately but must manage real
together
ii. Texas view  look at the source of the community property
1. Example: Mather can manage her income from St. Mary’s even though it
is community property
h. Income from separate property
i. Some states  separate
ii. Texas  community property
i. Item theory of community property
i. Each piece of community property is owned by the community
1. The community is owned by the spouses in 1/2 shares
ii. Example: H and W own Blackacre and Whiteacre; each property is worht
$50,000
1. H wants to leave Whiteacre to daughter thinking it is the same value as
Blackacre and thinks wife just gets all of Blackacre, thus is even
2. THIS IS NOT PERMITTED; he does not own all of Whiteacre; he needs
W’s permission
iii. Widow’s election is based on this idea; giving up the surviving spouse’s interest
in exchange for a life estate (should not come up on exam)
j. Shut-Out Conflict
i. If spouses live in separate property state and all property is in H’s name
1. Example: live in Illinois and acquire all property
ii. Spouses move to Texas
1. But the property is separate because it retains its character
For these reasons, it is
important to ask where your iii. H dies; disinherits W
client has lived and how iv. Not community property; no elective share in Texas!
their estate plan looks!
v. Some states provide “quasi-community property rights”  at death, consider
if the property would have been community had it be acquired in the community
property state

CAITLIN SULLIVAN_51
 1. Texas does not do this at death (but does at divorce)
k. Double Dipping
i. If the H and W live in community property state all their lives; everything is in
H’s name but move to separate property state
1. Property retains it character; it is still community property
ii. H dies; disinherits W
iii. W has an undivided 1/2 interest in share of community property but will also be
able to exercise elective share
l. But remember  real property in another state is subject to ancillary jurisdiction (pg. 3)
F. Support Protection
a. State and federal governments take protection measures at death
b. Federal:
i. Social security benefit  at death, you can claim your spouse’s social security
1. Even if you are divorced
ERISA did two major ii. ERISA  pension plans (pg. 45)
things: (1) surviving spouse 1. If you have a pension plan and you are married, your spouse must be the
must be beneficiary unless beneficiary unless they waive their interest
they waive; (2) defined plan
must be joint and survivor 2. Most pension plans are governed by federal law
annuity, unless spouse 3. If the employee survives to retirement age and they have a defined
waives.
benefit plan (pg. 45)  must be paid as a joint and survivor annuity
4. Waivers are strictly construed; ERISA preempts state law
5. ERISA is not necessarily looking towards death but is concerned with it
c. States:
i. Mostly protect family members from creditors
ii. Example: Father dies; Mother survives, minor children survive; can the father’s
creditors reach the property?
iii. Homestead protection
1. Uniform Probate Code  offers a dollar allowance for homestead
a. $22,500 adjusted annually for cost-of-living
2. Texas  homestead is protected from creditors
a. Surviving spouse  life estate
b. Children  while they are minors
c. If you rent, given allowance in lieu of homestead
i. $45,000
ii. At least this amount is exempt from the father’s creditors
iv. Personal Property Set-Aside
1. Creditors cannot reach a certain amount of personal property
ALL STATES DO SOME 2. Uniform Probate Code  $15,000 adjusted for cost-of-living
FORM OF THESE 3. Texas  list of exempt property at death for surviving spouse and minor
children
a. Maximum: $100,000 (pretty generous)
b. Exempt from sale by Texas Constitution
v. Family Allowance
1. Protect the surviving family members with a dollar amount
2. Uniform Probate Code  up to a year of reasonable allowance
3. Texas  up to a year of reasonable support as needed
4. Most states  first $50,000 to $100,000 will be exempt

CAITLIN SULLIVAN_52
G. Pretermitted Hiers
a. We do not want people to forget about their children and leave them out of their wills
b. All states have some sort of pretermitted heir statute
i. Must look at specific statute
c. Pretermitted heir  an heir who was not alive when the will was executed but is alive
at the testator’s death
d. Arose from Louisiana civil law tradition; the idea that you cannot disinherit your children
e. Limited protection; not as much as surviving spouse
f. Some states have pretermitted spouse statute  if you have a will and you married, your
spouse will be automatically added to the will
i. This is a minority view; Texas does not recognize
g. Current common law countries are attempting to protect children
i. England; Australia; New Zealand; and parts of Canada
ii. The idea that we need to have a forced share like for spouses
iii. England is you attempt to disinherit dependents, they can judicially take against
the will
h. Texas Pretermitted Child State (TEC § 255.051 et. seq.)
i. Definition: a testator’s child who is born or adopted: (1) during the testator’s
lifetime or after the testator’s death; and (2) after the execution of the testator’s
will.
ii. Applicability: the child must not be: (1) mentioned in the testator’s will;
(2) provided for in the testator’s will; or (3) otherwise provided for by the testator
1. The “otherwise provided” is important; sometimes parents will make
their children beneficiaries for life insurance
a. That would not be pretermitted!
iii. Whether the testator has other children before the pretermitted child is born:
1. If no provision is made in the testator’s will for any child who is alive
when the will is executed, the pretermitted child takes a portion of the
testator’s separate and community property, other than a portion of the
estate devised to the pretermitted child’s other parent, as would have if
under intestacy without a surviving spouse (pg. 8);
2. If there is a provision for any child who is alive when the will is
executed, the pretermitted child is entitled only to a portion of the
disposition made to children under the will that is equal to the portion the
child would have received if the testator had: (1) included all children;
and (2) given an equal share of the benefits to each child.
a. Must be the same character as other children (life estate, fee
simple) to the extent possible
iv. Whether the testator has no children and the pretermitted child is born
1. The pretermitted child takes a portion of the testator’s separate and
community property, other than a portion of the estate devised to the
pretermitted child’s other parent, as would have if under intestacy
without a surviving spouse (pg. 8);
v. A non-marital child (so-not the child of the other parent)
1. Is a pretermitted child; can take the testator’s estate but not more than
half; but otherwise takes pursuant to .053; and .054

CAITLIN SULLIVAN_53
 vi. Example:

1. Tim is otherwise provided for with life insurance  he is not

pretermitted
i. See Jackson
i. Does a pretermitted heir statue apply to a revocable inter vivos trust?
1. Modern trend  yes
2. But this court said no (said look to legislature, statute does not cover)
XIV. Duties:

Fiduciary Administration  Duty of Loyalty

o No self-dealing
o No Conflict of
A. Fiduciary law applies to trustees; purpose is to protect beneficiaries Interest
B. There are two major duties and subsidiary duties:  Duty of Prudence
o Duty to investigate
a. Duty of Loyalty (exercise discretion
i. No self-dealing  trustee may not engage in self-dealing at all property)
o Duty to Invest
ii. No conflict of interest  trustee should take due care not to have
 Duty to Collect and Protect
conflicts with their own assets and those of the trust Trust Property
b. Duty of Prudence  Duty to Earmark
 Duty Not to Co-Mingle
i. Duty to investigate Assets with Trust Assets
ii. Duty to invest properly DUTIES ARE OWED TO  Duty to Keep Adequate
Records
c. Duties regarding property: THE BENEFECIARIES
 Duty to Bring and Defend
NOT THE SETTLOR
i. Gather property; Claims
 Duty of Impartiality
ii. Account for property;  Duty to Inform and
iii. Communicate to beneficiaries regarding the property. Account
o Affirmative
C. History of Trustee Duties Disclosure of
a. Historically, trustees could not do much; could just hold on to Significant Events
o Duty to Respond to
b. Modern day, we want trustees to actively manage; invest Reasonable Requests
c. Renewed interest in fiduciary law for trustees for Information
o Duty to Account
d. Settlor wants someone else to manage the property!
e. Modern day  trustees have broad powers
i. Fiduciary law reigns them in
ii. Most states have statute that indicate what a trustee may and may not do
iii. If you establish a trust and do not include duties, the statute will provide

CAITLIN SULLIVAN_54
 1. These statutes are broad
a. Why? We want the trustee to manage the property for the benefit
of the beneficiaries like a “true” owner would
iv. The settlor can designate what a trustee may do in the original trust document
1. “I want to the trustee to only invest in real property”
f. When you hold property as trustee, should designate yourself as trustee
i. If the document says you hold as trustee, others have a duty to inquire
D. Duty of Loyalty
a. Self-dealing
i. The most important rule in fiduciary law
ii. THIS IS AN ABSOLUTE DUTY  strictly prohibited
iii. You cannot subtract or use trust property for your own benefit
1. Example: trustee takes estate funds and buys a new car
2. If the trustee does so, they are obligated to forego all profits even if there
is no harm to the trust
iv. No Further Inquiry Rule  if you engage in self-dealing, you will pay
everything back; pay penalties; forfeit profits
v. Exceptions: (1) court authorizes self-dealing (rare); (2) settlor authorizes
self-dealing; (3) beneficiaries authorize; and (4) statutes may authorize limited
self-dealing (like a paid trustee).
1. Examples:
a. Settlor: “I leave Blackacre to X in trust for the benefit of A but X
can also sell property for himself”
b. Beneficiaries: “You can sell the property can take a portion of
profit”
c. Corporate trustee may have the ability to invest in their own
assets
i. Frost Bank as corporate trustee is authorized to invest in
their own stock
d. If a trustee is also a beneficiary, they may engage in
self-dealing
i. Mather has a trust with her daughter as trustee and
beneficiary; the other daughter just a beneficiary
ii. “Wearing the other hat”
vi. See In re Gleeson’s Will
1. D left farm to trustee; trustee leased the farm property at the time;
Trustee renewed lease to himself
2. The trustee may not deal to himself, even where he had a lease to the
property before becoming a trustee. While extending his lease did not
harm the beneficiaries, the rule is absolute, so he must turn over all the
profits.
3. Some criticism on the no further inquiry rule; the trustee should be
able to self-deal if it is in the best interests of the beneficiaries and
prudently taken
a. “Dangerous” road
b. If you anticipate that self-dealing might be necessary, do not put
the property in the trust at all or seek beneficiary permission

CAITLIN SULLIVAN_55
 4. Might have a different result today
b. Conflict of Interest
i. In re Rothko – Rothko dies and his estate constituted of 798 paintings
1. Named three people as executors of estate and directors of foundation
a. Reis; Stamos; Levine
2. The beneficiaries contracted with MAG to sell 100 paintings for
1.8 million to be paid over 12 years
3. Another contract with MNY to sell 700 paintings over the next 12 years;
70 paintings could be sold each year, and MNY would receive 40-50% of
the commission
a. Probably violated the duty of prudence as well
4. One of the executors (Reis) was MNY’s secretary and treasurer
a. This is a direct conflict of interest; cannot sell as the
representative of the trust and take a large commission
b. Mather says this is self-dealing as well
5. Another executor (Stamos) wanted to exhibit his paintings at MNY
a. This is a conflict of interest; Stamos would benefit as an
artist
6. The last executor (Levine) knew about it all!
7. The value of the paintings at the time of the trial was nearly $10 million
a. The trial court found all three had violated duty of loyalty
b. All three were liable for this loss
8. Court ordered appreciation damages  wanted to discourage
executors from self-dealing and conflicts
a. Authors criticize this last point but if it is blatant self-dealing
will often punish the trustees
c. Co-Trustees
i. There are some benefits to using co-trustees
ii. At common law, co-trustees must act as a group and with unanimity;
1. Unless trust instrument provides otherwise
2. Exception: Charitable Trusts
iii. Modern trend  majority rule is sufficient
Ministerial  an act or
duty carried out as part of
1. If there are three or more trustees, may operate in majority rule
the duties of an 2. If there is a disagreement, should dissent in writing to protect yourself
administrative office
without exercise of personal
3. Texas offers majority rule
judgment or discretion. iv. Trustees with different skill sets
Discretionary  require
judgment and decisions
1. Can delegate ministerial functions but not discretionary functions
2. But all trustees must engage in decision making
v. Example:
1. A and B are co-trustees; A is on cruise
2. A $10,000 gov’t bond comes; B invests in Zany Corp
3. Six months later the stock is worthless
4. A is still liable  six months is a long time needed to check on the trust
vi. Texas: the standard is reasonableness
1. If you are a co-trustee, you are reasonably responsible for checking on
the trust, the trustee, etc.

CAITLIN SULLIVAN_56
 E. Duty of Prudence
a. Mandatory trust  trustee has to give all the income to the trustees at given intervals
i. Whatever assets are in the trust, the trustee must distribute the income
b. Discretionary trust  trustee has discretion on how much to distribute and when
i. Most trusts are discretionary
ii. Trustee can decide: how; when; how much to distribute to beneficiaries
iii. Can be income; principal; or both
iv. Broadest possible discretion
v. Limiting principle: if you have improper motive
1. Example: there are three children as beneficiaries and you do not like one
c. Spray or sprinkle trust  distribute to beneficiaries something but have discretion in how
much
d. Support trust  A discretionary trust in which the settlor authorizes the trustee to pay to
the beneficiary as much income or principal as the trustee believes is needed for support,
esp. for “comfortable support” or “support in accordance with the beneficiary's standard
of living.”
i. Standard - support standard
1. The settlor has the ability to extend discretion: sole, unfettered discretion
ii. Similar to discretionary trust
iii. Trustee is supposed to provide for the support of the beneficiary as they need it;
but the trustee gets to determine how much
iv. With a support trust, may the trustee consider other income or support available
to the beneficiary?
1. Majority view  no
a. “Support means support from the trust”
2. Texas view  yes
a. “Does the beneficiary need it”
3. The settlor could include this in the trust!
4. In general, it does matter what the settlor intended
a. Did the settlor just want the beneficiary taken care of or did they
want the trust itself to support?
e. Exercise Discretion Properly
i. See Marsman v. Nasca – spouse of the decedent was beneficiary of support trust;
the trustee had a duty to inquire about reasonable support needed for the
beneficiary
Part of the duty of discretion 1. Duty to inquire; duty to distribute principal
was asking how the 2. Remedy here: impose a constructive trust in favor of the beneficiary’s
beneficiaries were doing for
the support trust; could not estate
just sit on the trust and 3. Duty to account (judicially or informally)
distribute income
4. Exculpatory clause  lawyer was not liable personally because the valid
clause
a. Settlors can input an exculpatory clause in the trust that
reduces obligations of trustee
b. Trustee was not intentionally trying to harm;
c. Did not have improper motives
d. General rule: exculpatory clauses will not insulate against:
i. Bad faith;

CAITLIN SULLIVAN_57
 ii. Reckless indifference;
iii. Intentional conduct.
ii. In general, trustees are too conservative with disbursements
1. Trustees like to hold onto the money
a. Why? They are likely worried about the remainderman
iii. Standard for the trustee’s discretion: (1) exercise in good faith; (2) proper
motives; and (3) reasonable judgment
f. Texas limits:
i. Trust cannot be created for illegal purpose;
ii. Will not excuse a breach of trust (even with exculpatory clause):
1. Bad faith;
2. Reckless indifference;
3. Intentional or reckless indifference to beneficiaries’
iii. Trustee must account and respond to beneficiaries’ requests to account;
iv. Trustee must act in good faith.
v. Trustee must keep beneficiaries over the age of 25 “reasonably informed”
g. Duty to Invest
i. Historically, trusts were conservative with investments
1. Most states had approved lists of investments
a. Bonds, not risky investments
2. Could also have prohibited investments
3. The focus was on preserving the corpus
ii. Today  focus to produce income and provide for inflation so that the
corpus has value when the life tenant dies
iii. After WII, shifted from list to “prudent person standard”
1. Manage the trust assets as you would manage your own assets
2. Standard of reasonable/ordinary skill
3. If the trustee had special skills, they were held to the standard of a
reasonable person in that position
a. Example: if the trustee was a lawyer, they were held to the
standard of a reasonable lawyer
4. Each investment was analyzed separately
a. Criticism: static; not providing for growth; overly concerned
with the principal; not diversified; speculative investments; does
not protect against investment
h. Current Standard of Investment  Portfolio Theory
i. Look at the entire portfolio
1. The trustee may invest in anything that plays an appropriate role in
meeting the risk/return objectives of the trust
ii. What are the trust’s goals
1. When the settlor established the trust, were they concerned with the life
tenant? If so, do not worry as much about the remainderman
2. Is it to grow for the future? Need to increase the value of the trust
iii. Texas adopted; Uniform Investor Act Theory
iv. Inquiry  what did the trustee know at the time the decisions were made
1. We cannot look at hindsight
v. Investment is more challenging for lay trustees

CAITLIN SULLIVAN_58
 1. Trustee can delegate
2. Trustee can hire and consult: accountants; investment advisor
3. But the trustee must make the ultimate decision
vi. Duty to diversify  allocating capital in a way that reduces the exposure to any
one particular asset or risk.
1. Duty depends on the nature of the trust
2. May not retain assets automatically
vii. In re Estate of Janes (the Kodak case) – settlor invested 70% in Kodak stock; the
trustee (a bank) did not reinvest; this is not diversification
1. Although this is a pre-portfolio case, the court says:
a. Look at purpose of trust;
b. The risks;
c. The size of the estate;
d. And needed to diversify.
2. Damages are important in a “bigger” trust like this
IN TEXAS, BOTH ARE a. Lost capital plus interest  should have sold the stock on a
AVAILABLE certain day; because you did not this is the damage
DEPENDING ON THE
CIRCUMSTANCES!! b. Total return damages  if sold when should have PLUS
invested elsewhere
3. Case is slight unfair to Kodak; when the husband died Kodak was a
“safe” investment
a. Duty of diversification was not clear until the 90s
viii. There could be circumstances wherein the duty of diversification does not apply
1. Example: a family farm that you do not want to invest
i. Inception Assets
i. Traditionally: if the trustee received a trust with assets in it, you could retain
them
1. Example: the retained Kodak stock
ii. Modern  if retention is permitted in the trust, it is allowed but trustee still
must investigate if retention is warranted
1. The settlor may require retention (the family farm)
a. This puts the trustee in a difficult position
b. The trustee must retain the asset unless:
i. Becomes illegal, impossible;
ii. The circumstances have changed so much that the asset
puts the trust in peril.
j. Unwise Settlor Strategy
i. If the settlor directs and unwise investment strategy, the trustee considers:
1. Purpose of the trust;
2. The policy against waste;
3. Illegality;
4. Impossibility;
5. Will cause the crashing of the trust.
ii. If these factors direct to, look for modification (pg. 64)
F. Five Sub-Rules Relating to Trust Property
a. These are “not as important” as duties of loyalty and prudence
b. Collect and Protect

CAITLIN SULLIVAN_59
 i. Particularly looking at personal property
ii. Obligation to collect the personal property and protect it
1. Perhaps insurance it or put it in a safe
iii. No reasonable delay in either
iv. Examine and make sure that the property is correct
1. Take an inventory
v. Act as a prudent person in preserving
1. If it is artwork, probably do not store it in your garage
c. Earmark
i. Mark property as trust property
1. Own real property  on deed, Victoria Mather as Trustee
2. Stock  certificate hold as trustee for X family trust
3. Personal property  store and insurance as trustee not as owner
ii. Common law  if fail to earmark, liable to the trust for any loss whatsoever
1. Did not matter if the loss was your fault
2. This is still the majority view
iii. Modern trend  trustee is liable for any loss that is attributable to the
failure to earmark
1. This is still a minority view but the modern view
iv. Do not have to earmark bearer bonds
1. Rare exception
d. Duty not to Co-Mingle Trust Property with Own Property
i. Difficult with cash or bank accounts
ii. Common law  strictly liable to the trust for any loss whatsoever
iii. Modern trend  liable for the loss attributable to co-mingling
iv. Texas  if you co-mingle:
1. Increase in value  trust gets the value
2. Decrease in value  trustee takes the hit
v. Exception: most states allow smaller trusts to be combined into a “bigger trust”
to invest on behalf of the trusts
e. Duty to Keep Adequate Records
i. Linked to the duty to account
ii. Promotes prudent administration
iii. Enable the beneficiary to be informed
iv. Protects trustee against “hindsight” review
1. If the trustee has records about what investments they considered, etc.
f. Duty to Bring and Defend Claims
i. Trustees can enter into Ks
1. Can have responsibilities or be owned them on behalf of the trust;
ii. Trustees can commit torts;
iii. Trustees can be the victim of a tort;
iv. Trustee has to determine what the risk is:
1. Should you settle
2. Should you bring a claim;
v. Trustee must act prudently and reasonably in these decisions
G. Trustee Selection and Responsibilities
a. Settlor can settle any individual or entity they desire as trustee

CAITLIN SULLIVAN_60
 i. Family member; professional; business
b. Once you are chosen as trustee and accept, you have a duty not to delegate
i. Can hire accountants and consultants
1. Trustee must still supervise
2. Must use care in selecting and delegating these individuals
ii. But the ultimate discretion is for the trustee
iii. Can delegate ministerial functions but not discretionary
c. Historically, the duty not to delegate was strictly construed but this has relaxed
H. Modern Trends in Trust Law
a. Use of Trust Protector  sole job is to “protect” the trust
i. Not a trustee
ii. Can fire and hire trustees
iii. Can terminate the trust on their own accord
iv. Can often make changes to trust
v. Can approve administrative or dispositive provisions
1. Example: instead of A & B as beneficiaries; A & C will be
b. Delegated Trusts  within the trust there is an express provision allowing the trustee to
delegate certain functions
i. Example: if Mather has her mother as the trustee the trust says “You are
authorized to hire a financial advisor and you can leave the decision-making to
the advisor”
ii. Permission to actually delegate to an expert
c. Directed Trust  the trustee’s job is to manage the property but the trustee is directed by
an individual that is not a trustee
i. “Opposite” of a delegated trust
ii. Trustee is directed to follow instructions from someone else
iii. Different than how a trust usually operates
iv. Newer devise
d. Family Trust Company  families with businesses, interests, or land (families with a lot
of concentrated wealth) that they want managed together
i. A hired person that manages the family trusts as a group
ii. The only job is to manage these trusts
I. Duty of Impartiality
a. The trustee is supposed to treat the income beneficiaries and principal fairly
i. Unless the trust says otherwise
Income beneficiaries 
life tenant 1. The trust might expressly prefer the life tenant
Principal beneficiaries  2. Also presume that settlors want to favor their spouses
remainderman
ii. This can be a challenge; Texas adopted the Uniform
1. Authorizes the trustee to take income and transfer it to principal and vice
versa
2. Can deem increases in value to be income or principal
3. This is a discretionary function of trustee
b. Unitrust  a fixed percentage of principal as return to income beneficiary
i. Eliminates the need to be impartial because the unitrust indicates how much of
the unitrust to distribute
c. Allocation of Principal and Income
i. Traditionally interest and cash were income; increases in value were principal

CAITLIN SULLIVAN_61
 ii. No longer makes sense under the Portfolio Theory  look at the whole
J. Duty to Inform and Account
a. Three parts: (1) affirmative disclosure of significant events; (2) promptly respond to
reasonable requests for information; and (3) duty to account
i. Affirmative Disclosure of Significant:
1. You do not have to tell the beneficiaries every time you buy or sell trust
assets
2. Only significant transactions
a. See Allard v. Pacific National Bank – there is only one asset in
the trust; trustee sells without telling the beneficiaries (this was a
breach)
3. Texas view  must disclose information to beneficiaries (1) upon
request; or (2) if trustee will take a material and unusual action.
a. A trust document may limit this duty if:
i. Trust is revocable;
1. Why? The settlor can revoke the whole thing so
STILL NEED THE
TRUST DOCUMENT TO the beneficiary’s interest is contingent
LIMIT! NEED ii. Beneficiary is under 25; or
LANGUAGE THAT THIS
DUTY IS LIMTIED iii. Beneficiary is not eligible for distributions if the trust
PLUS ONE OF THESE were to terminate at this time.
1. If the trust terminated today and the beneficiary
has not vested, then why should you have to
inform them?
ii. Duty to Account: judicial and informal
1. Judicial accounting protects trustees
a. Everything in and out of the trust;
2. Texas view  trustee has a duty to account at the request of beneficiary
or interested party: (1) within 90 days of the requests; and (2) no more
than once every 12 months
a. Accounting appears (by case law) that trustees have duty of full
disclosure of all material facts known to them; anything that
would have a bearing on the value
3. See Nat’l Acad of Sciences v. Cambridge Trust Co. – decedent left a trust
to wife for life, but if remarries or at her death, remainder to National
Academy of Sciences
a. W remarried but did not notify trustee
b. The Academy sues trustee to set aside accountings and recover
improper distributions (court allows)
c. Texas  trustee is not liable for distributions made without
knowledge of the facts (actual knowledge or written notice)
including marriage or divorce
i. But trustee still has a duty to inquire (even though this
statute does not say so); this is a part of the duty of
prudence
4. Accounting helps protect trustee; it is often required by law

CAITLIN SULLIVAN_62
 XV.
Modification or Alienation of Trusts
A. Alienation
a. Restrictions on Alienation of trusts
i. Alienation – conveyance or transfer of property to another
b. Restrictions of Alienation arise in: discretionary trust and support trust (pg. 58)
i. Discretionary trusts have a protective aspect
1. Creditors cannot reach the assets while the trustee has them in the
trustee’s control
2. If the trust is purely discretionary, the trustee does not have to
distribute anything so the creditors cannot reach either
3. But if the trustee gets the beneficiary an amount, the creditor can reach
ii. Support trust
1. Spendthrift aspect; the beneficiary cannot make a voluntary alienation
for non-support creditors
2. Only support creditors can reach the assets of the trust
3. Can force the trustee to pay out to the creditors that paid necessary
support to the beneficiary
a. Usually medical creditors but also food, shelter, clothing
B. Spendthrift Trusts
a. Spendthrift trust - A trust that prohibits the beneficiary's interest from being Spendthrift - a person
assigned and also prevents a creditor from attaching that interest; a trust by the who spends money in an
extravagant, irresponsible
terms of which a valid restraint is imposed on the voluntary or involuntary way
transfer of the beneficiary's interest
b. A device for settlors to protect beneficiaries from creditors; preserve trust assets;
c. Works through a disabling restraint
i. A clause in the trust that says “The beneficiary may not alienate his or her
interest”
1. Cannot transfer to a creditor or anyone else
2. Creditors cannot reach the assets either
d. Some states do not allow
i. Why? They say it favors the rich and overly paternalistic
e. Most states do allow spendthrift trusts
i. Texas allows (Texas Property Code § 112.035)
ii. We want to honor settlor intent
iii. The purpose is to protect the beneficiary and provide the life tenant
f. Even with a spendthrift trust, cannot protect against:
i. Spousal support order;
1. Policy  we do not want the spouse on welfare
ii. Child support orders;
1. Policy  children need to be supported; we do not want the children on
welfare
iii. Necessaries provided to beneficiary (food, clothing, shelter, medical care);
1. Typically, at a low-level; if the beneficiary buys a Ferrari likely not
covered
iv. US Tax liens (the IRS);

CAITLIN SULLIVAN_63
 v. Attorney’s fees;
vi. Torts vary
1. Some states say a tort creditor can reach the spendthrift
2. Others say no
vii. Settlor as beneficiary
1. You cannot create a spendthrift trust for yourself as life tenant with a
spendthrift clause; can protect your remainderman but not yourself.
g. See Scheffel v. Krueger – beneficiary sexually assaulted a minor, S
i. There was a spendthrift clause in the trust
ii. S sued in tort for assault, seeks to enforce judgment
iii. Even though sympathetic, the statute did not permit for tort creditors to reach if
spendthrift clause
h. Some states have special statutes for spendthrift trusts
i. Example: if the beneficiaries have a spendthrift trust, they can get “needs”
covered but if there is excess income in the trust, the creditors can reach
1. This protects the needs of the beneficiary but allows legitimate creditors
to get paid
2. Most states do not do thus
ii. Example: creditors can reach at certain % of the income garnishment
1. Not a majority view either
i. ERISA Pension Trusts are spendthrift trusts
i. In general, pension trusts that are covered by ERISA cannot be reached by
creditors
j. Bankruptcy creditors cannot reach spendthrift trusts
C. Protective Trusts
a. Offered in most states without spendthrift trusts
b. Operates through a forfeiture restraint
i. If the beneficiary tries to alienate interest, you lose the interest
ii. Or if creditors attempt to reach it
iii. The trust becomes purely discretionary
c. Does not protect the beneficiary; it extinguishes their interest when they try to alienate
D. Self-Settled Asset Protection Trusts
a. Some states and foreign jurisdictions (off-shore trusts) allow
b. This is a trust that a settlor can establish a trust to protect themselves from creditors
i. Ordinarily, this is not permitted (pg. 65 above)
c. Usually, the purpose is to insulate from tort liability
Another device  some
states have abolished RAP
d. The Off-Shore Trusts  United States did not have jurisdiction
to allow for perpetual i. Some states authorize Self-Settled Asset Protection Trusts (below)
trusts

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 e. See Huber v. Huber – Huber has a real estate development company; signed as third-party
guarantor on loans
i. Lived in Washington; business is in Washington
ii. Goes to Alaska and sets up self-settled assed protection trust; transfers ownership
General conflicts principle  of his property into the trust to protect from bankruptcy
Law designated in a trust to
govern is valid if (1) the state has iii. Court says the assets are not protected  no substantial relation to the state of
a substantial relation to the trust; Alaska; violates public policy
and (2) law does not violate
public policy. 1. No connection to Alaska  settlor, beneficiaries, and corpus are all
related to Washington
2. Public policy  Washington state does not favor asset protection trusts
iv. Also: fraud; intent to defraud creditors
f. For these trusts:
i. Jurisdictional issues; professional responsibility; timing of actions might affect
fraud; newer aspect of law; it is undeveloped
ii. Jurisdiction: off-shore trusts  US does not have jurisdiction over the trust
assets, but if the settlor is on US soil, they have jurisdiction over the person
1. The gov’t can pressure to repatriate the assets
iii. Trust protectors often arise to protect the foreign trust
1. But settlor cannot be both trust protector and settlor
iv. Flight clause  trustee may move trust if the trust or change the governing law if
is threatened in a jurisdiction
E. Trusts for the State-Supported
a. Individuals that are developmentally disabled or in nursing homes
b. On Medicaid or other state support
c. Want to assist these individuals through trust assets without foregoing Medicaid benefits
or requiring that the individual repay Medicaid
d. The State will provide necessaries but not further care (hairdresser, etc.)
e. Can create a special needs trust or supplemental trust
i. Federally regulated
f. If you are state-supported, the state is not going to look favorably on transferring all
assets to another to qualify

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 i. Mather says “plan ahead”
F. Modification and Termination of Trust
a. General rules:
i. If the settlor is alive: may terminate or modify a trust if: (1) all beneficiaries
agree; and (2) settlor agrees.
1. Must be unanimous between beneficiaries and settlor; trustee has no
input
2. A problem arises if there are unborn individuals in a class
a. Virtual representation may be utilized
i. Texas explicitly allows
ii. Example: three grandchildren but there could be more;
existing grandchildren can represent the unborn
b. Or guardian ad litem can be used
ii. If the settlor is deceased: may terminate or modify a trust depending on
“material purpose test” – CLAFIN TEST
1. What was the material purpose of the trust?
2. If you terminate or modify, will it defeat the material purpose of the
trust?
a. If defeats  not allowed;
b. If further the purpose  allowed
3. Texas view  furthering the purpose of the trust
a. Mather says this is almost the same test
iii. It is easier to modify an administrative change than a distributive change
1. Administrative: “Invest in real estate even though the trust says I cannot”
a. An administrative change that achieves tax purposes or
efficiency is easy
2. Distributive: “Beneficiaries get income plus 3% of the principal of trust
when the trust does not indicate so”
a. See In re Estate of Brown – decedent left an estate to children of
his nephew for their education, then to nephew and his wife for
their lives, remainder to their children; children complete
education and petition for termination
i. Court says this violates material purpose of the trust
b. See In re Riddell – T and W have wills left money in trust for
wife, son, daughter-in-law and children; after death, income to
grandchildren if they reach age 35
i. The grandchildren both reach age 35; Nancy is mentally
ill and unlikely to recover; Donald is an attorney
ii. Donald petitions to modify; wants to set up a
special-needs trust for Nancy
iii. Court below says no; appeals  yes! Settlor did not
anticipate that Nancy would be incapacitated and settlor
would likely want the money to go to her care rather
than to the state
iv. We are looking at the what the settlor’s intent was
1. Contra In re Trust of Stuchell (opposite result)

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G. Trust Decanting
a. Concerns modification
b. Take trust assets and put them in a new trust with the same assets

c. Texas allows decanting

i. Majority of states likely do
ii. Do not need the beneficiaries’ consent to decant but should inform (give notice)
1. Not all states require notice to the beneficiaries’
d. But you cannot use the new trust to harm the rights of an existing beneficiary
e. See Hodges v. Johnson – Senior creates two irrevocable inter vivos trusts; beneficiaries
are Senior’s children, step-children, and their descendants; corpus is family business;
i. Starts creating new trusts to exclude children and step-children and decanting
ii. Courts says this is invalid; they do not have a good faith reason to decant;
deliberately harming the beneficiaries’ interests
iii. Need a good valid reason to decant
1. Usually to protect
f. Settlor can include power to decant in the trust
i. But if it’s not in the trust, it may be authorized by statute
g. Can use decanting power to create special-needs trust
h. Some states allow trustee to modify without decanting
i. Not a majority view
H. Changing Trustees
a. The beneficiaries may be unhappy with the trustee
b. Traditional view  cannot change the trustee unless there has been a breach of a
fiduciary duty
c. Modern view  will often allow change of trustee if the situation is not working well
i. More lenient than the traditional view
ii. Particularly if there is a conflict
1. Does not necessarily have to be a “fight”
2. Beneficiary can simply be uncomfortable with trustee
3. Court may allow

Pros of Corporate Trustee Cons of Corporate Trustee

 Have more expertise; know how to
manage property better  Tend to be “one size fits all”
 Have record keeping mechanisms at o Might be beneficial to have a
their disposal family and corporate for this
reason

CAITLIN SULLIVAN_67
  Tend to be too conservative with
preserving the corpus
d. See Davis v. U.S. Bank – Davis is life beneficiary of trust; U.S. Bank is current trustee;
wants to change to U.S. Trust as trustee; grandfather was settlor
i. U.S. Trust has lower fees; closer; wants trustee to work with financial advisor
ii. Davis was able to show it was “better” to change trustee
iii. In the modern trend, we will allow change of the trustee, even if there is no
breach of fiduciary duty, if the beneficiary can show good reason
I. Issues that Arise in Modification or Termination
a. Life trust that does not account for inflation
i. If the trust includes a dollar amount to distribute
ii. In drafting, we should probably permit the trustee some flexibility to modify
b. Virtual representation (pg. 67)
i. Represent the unborn interests;
ii. Guardian ad litem;
iii. Parent represent if no conflict with minor or unborn child.
XVI.
Attorney Panel
A. J. Barrett Shipp
a. Shipp & Ecke, PLLC
b. What drew you into practice?
i. Came over as litigation estate
c. Cautions about estate practice?
i. Problems can be multi-fold: grief; failure for not seeing the issue earlier; not
necessarily dealing with just two sides
ii. Educate the parties; educate the judge
iii. One of the rare facets of law that when your client says what they want, you have
to consider what the will says or what the fiduciary duties are
1. Your client is the executor; trustee; have to comply with duties
d. Advice to Practice?
i. Join a limited number of organizations
ii. Choosing to do the work that other transactional lawyers do not want to do
iii. Develop a skill-set for “problematic” probate and trust cases
e. How will AI affect estate planning?
i. Gives a base answer; can “invent” an answer when there is not one
ii. As a substitute for notetaking function, perhaps
f. Intersect of Estate and Family Law
i. Estate law is really just spillover of arguments from family law
ii. Filing for divorce is not divorce  there are spousal protections
iii. Either divorced or not; only “medium” is continuum if there is a signed,
mediation agreement for property division and a spouse dies
iv. Child support also arises; co-parenting
v. Community property tracing
g. Where do you see niches and opportunities?
i. Practice to help people! Go back to the Texas Lawyers’ creed and know you have
a responsibility

CAITLIN SULLIVAN_68
 ii. There is a shortage of good lawyers
B. Maurine “Mo” Shipp
a. Mo is Board Certified in Estate Planning and Probate law by the Texas Board of Legal
Specialization, an achievement reached by less than 10 percent of Texas licensed
attorneys
b. What drew you into practice?
i. Got into estate planning because her father is an estate lawyer
ii. “Problem solving” aspect; premarital agreements as well
iii. Practices probate administration as well
c. Cautions about estate practice?
i. A lot of arguments are rooted in grief
ii. We are not fighting about the item in front of us; we are looking at the grief
iii. Learning about intimate aspects of people’s lives (illegitimate children)
iv. Setting boundaries and compartmentalizing
d. The Ad Litem Wheel
i. If you are interested in probate practice, get on the wheel
e. How will AI affect estate planning?
i. I think it will affect
f. Intersect of Estate and Family Law
i. Even in the most loving families, when tragedy is involved, it offers an
opportunity for things to go badly
ii. Need stability and telling your family members about your estate plans
iii. If you want to cohabitate with someone, know that you could be common law
married upon your death  lay out your intent
iv. Number of co-habitation agreements and premarital agreements has increased in
the last five years
g. Where do you see niches and opportunities?
i. Taxable estates; advanced estate planning (not recorded for IRS purposes)
ii. Find your people  people who will talk to you; tell you when you’re wrong
C. Judge Barbie Scharf-Zeldes
a. First judge presiding in Probate Court No. 3 in Bexar County
b. What drew you into practice?
i. Initially thought she would practice labor law; started working at a probate firm
ii. Her husband’s grandmother had passed
iii. Worked with families of officer’s killed in the line of duty; established heirships
and guardianships
c. Caution about estate practice?
i. Probate court is the kinder, gentler side
ii. Family law is the other end of probate law; just has a different name on the door
iii. Texas Lawyers’ Creed  we need to work together and communicate
1. Print this out. Have it somewhere you can see it.
iv. There is work-life balance to contemplate
v. Connect and network but do not forget about yourself, family, or pets
vi. Do not let “it go your head”; Chris Pettit example
vii. Do not be afraid to said no to your clients  you have a duty to the bar
d. The Ad Litem Wheel
i. Can always use pro bono
ii. Wants to establish a probate clinic of the Ad Litem wheel at St. Mary’s

CAITLIN SULLIVAN_69
 e. How will AI affect estate planning?
i. Judge reads everything carefully, so make sure AI is not fabricating cases
f. Intersect of Estate and Family Law
i. “Your mother had a will and that made it easier for you”
ii. No premarital agreements any later than six months before the wedding
iii. If you have multiple marriages, children from different marriages, illegitimate
children, “common law marriage”
iv. When need to document because family is so complicated
g. Where do you see niches and opportunities?
i. People always die; aging population
ii. Who is making decisions for elderly (guardianship); the homeless population
D. Whitney Thomas
a. San Antonio Legal Services Association; and the owner of the Whitney Thomas Law
Firm
b. What drew you into practice?
i. Wanted to practice bankruptcy
ii. Volunteered at San Antonion Legal Services Association Wills’ Clinic
c. Cautions about estate practice?
i. Sometimes you have to be voice of reason
ii. Look at both sides; look at the emotion; try to reach a compromise
d. The Ad Litem Wheel
i. This can let you network with attorneys so that they see your work ethic
e. How will AI affect estate planning?
i. For the business aspect
ii. Maybe use in comparison between similar or holes in an argument
f. Intersect of Estate and Family Law
i. Had a client that unexpectedly died during COVID-19 and her divorced wasn’t
finalized
ii. Should have connection and cross-over
g. Where do you see niches and opportunities?
i. Can come in the groups of people you help
ii. TikTok estate planning for young people!
XVII.
Charitable Trusts
A. Charitable Trusts
a. Persist forever
i. In the cases that consider charitable trusts, circumstances have changed
B. Charitable versus Private Trusts

Charitable Trust Private Trust

 Benefit the community generally
 Can have indefinite beneficiaries  Benefit a particular person or a group
o “Trust to look for a cure for of persons
cancer”  Rule Against Perpetuities limits;
 RULE AGAINST PERPEUTITIES cannot have an indefinite duration

CAITLIN SULLIVAN_70
 DOES NOT APPLY
C. Charitable purposes
a. The IRS defines “tax deductible” donations; most states follow these definitions as what
is charitable
i. Relief of poverty;
BASIC CHARITABLE ii. Advancement of religion or education;
PURPOSES iii. Promotion of health
1. A lot of medical entities are non-profit and charitable
iv. Gov’t or municipal purposes
v. Other benefit to the community.
D. “Candy Trust” versus Charitable Trust
a. There is a distinction between something that is merely benevolent and charitable
b. See Shenandoah Valley National Bank v. Taylor
i. Decedent left his estate in trust for the children in the first, second, and third
grade to receive money twice a year (Easter and Christmas) to be used by each
child to further their education
ii. Is this a true charitable trust? No
iii. Trustee is supposed to pay the children directly; there is no way to monitor that
the money is used for education; the children were free to use the money as
they wished
iv. This trust does not meet either education or community benefit
1. It seemed more like a holiday distribution to the students
2. This is benevolent but not charitable
v. The trust violates the Rule Against Perpetuities and is therefore void
vi. How could we fix it?
1. Apply for distribution (like a scholarship);
2. Make the children show receipts of educational expenses and reimburse;
c. Could argue to enforce “Candy Trust” as honorary trust (pg. 39)
E. Differences in Trust Language

Charitable Language Not Charitable Language

 Sicky, needy employees of St. Mary’s
Univ  All St. Mary’s Univ employees
 A law professor endowment  Trust for lawyer’s generally
o A named professorship fund  Scholarship for individual (my
for educational purposes; daughter Mary)
recruits certain students  Foundation to benefit political policy
 Lawyers that are “needy”; have o This is against IRS policy
health concerns o Not a general community
 Scholarship at St. Mary’s purpose
 Foundation to improve gov’t  For an illegal purpose
 To promote change in the law o To buy cars for drug dealers
o Family law that got the age
of marriage changed in Texas
to age 18
 Promote temperance (abstinence
from alcohol)
 Promote women’s rights

CAITLIN SULLIVAN_71
  Study mental telepathy
o Interpreted as educational
 To study whether the soul leaves the
body
o Educational!
 Promote atheism
F. Mortmain Statutes
a. Traditionally, there were statutes that said if property was left to a charity in a will within
six months of your death, it is invalid
b. It was believed the charities were “guilt tripping” individuals to donating
c. Not worried about as much today
G. Drafting Hints
a. Specific the Charity;
b. Get the Charity name correct;
c. Make sure the Charity is IRS tax exempt qualified (if this is important to the settlor)
H. Modification and Cy Pres
a. Charitable Trusts have an indefinite duration Cy Pres  The equitable
b. Can modify a Charitable Trust if the trust’s goal has become: doctrine under which a
court reforms a written
i. Illegal; instrument with a gift to
ii. Impossible; or charity as closely to the
donor's intention as
iii. Impracticable. possible, so that the gift
c. Examples: does not fail
i. Trust to care for tuberculosis patients
1. Asked for Cy Pres because tuberculosis is no longer prevalent;
2. Typically used for cancer care or other widespread disease research
ii. Trust is “too small”
1. If the funds do not meet the goal, ask to modify so the funds can be used
for a smaller goal
iii. Trust is “too big”
1. See Buck Trust – decedent left her estate to San Franscisco Foundation
a. Trust is to be used for the needy and other charitable purposes of
Marin County
b. There are not a lot of needy people in Marin County (very
wealthy)
c. Stock in trust skyrockets after decedent’s death; worth $695
million in 1998
d. Foundation asks for Cy Pres to use for other nearby counties
e. Court does not apply Cy Pres  says the decedent intended
for money to be used for Marin County; ineffective
philanthropy is not equivalent to impossibility
iv. Beneficiary declines the gift because it is too restrictive
1. Someone leaves money to St. Mary’s but they want all these restrictions
on how to use money
v. Charity dissolution
1. Smaller charities
d. In re Neher – decedent leaves her house to her town “to be used as a hospital” named for
her deceased husband
i. The house is not suited as a hospital; there was a hospital nearby

CAITLIN SULLIVAN_72
 ii. Town wants to use as administration building
iii. Courts below say no; appellate court applies cy pres
iv. Look at the intent; general charitable intent to benefit the village and to
honor her husband
e. Equitable or Administrative Deviation  court will permit trustee to deviate from
administrative terms of a trust if compliance would defeat or substantially impair the
accomplishment of the purposes of the trust in light of changed circumstances
i. Example: trust was established to set up and school for girls born in Quincy, MA;
not supposed to pay tuition; money was insufficient to maintain a tuition-free
school, so the trustee proposes to admit girls from places other than Quincy and
charge them more tuition
I. The Barnes Foundation
a. Dr. Barnes accumulated artwork; dozens of paintings directly from artists
i. Dr. Barnes made a fortune after inventing baby eye drops
ii. Had art collector visit France; was looked unfavorably in the United States
iii. Dr. Barnes and Philadelphia society people were “at odds”
iv. Looked at the colors in a painting
v. Thought “art should be enjoyed by the everyday person”
b. Upon Dr. Barnes’ death, he established a Charitable Trust with specific rules:
i. Located in Merion (seven miles from Philadelphia)
ii. No paintings could be moved;
1. They cannot travel
iii. No other paintings added or exhibited;
iv. No paintings can be reproduced in color;
v. Open to public Saturdays only June through September;
vi. No entrance fees; no social functions
vii. Invest only in safe low-yield bonds;
c. 1961 - the Attorney General sued to expand hours; must be open 2 1/2 days a week to
keep tax exempt status
d. 1988 – Lincoln University becomes trustees; they sue to change trust to support the
gallery
i. Was not yielded any money; it fell in disarray
ii. Want to be open 3 and 1/2 days a week, all year long; admission fee
iii. Wants discretion in investing
iv. Wants to host events in the gallery
v. Wants to tour the pictures
vi. Wants to recreate the pictures on CD-ROMS in color
e. 2002 – moves collection to Philadelphia
i. The arrangement was mirrored as Barnes had done in Merion before his
death
1. They measured every painting on the wall and put it exactly the same
way as mansion
ii. Dr. Barnes arrangement was different than how many other museums or
collections would gather; he “mixed” the works
f. Dr. Barnes trust had a lot of restrictions; but he had reasons:
i. Did not want his collection to be limited to culturally elite;
ii. People in Merion were irate when Philadelphia moved the Museum
g. Was this illegal, impracticable, or impossible?

CAITLIN SULLIVAN_73
 i. Probably not  the works needed a new building (so maybe it was
impracticable)
h. Similar – Georgia O’Keefe works
i. Left artwork to Fisk University under the condition that she does not sell
ii. But Fisk did not have means to maintain; Fisk asked for Cy Pres to sell
iii. Was authorized; Fisk sold 1/2 of interest
iv. Did this violate her intent? Probably. She probably wanted her work together.
J. Discriminatory Trusts
a. Trusts that were established for only men or women; only Caucasian individuals
i. Needed to seek Cy Pres
b. If the trustee is a gov’t body  must seek Cy Pres for discrimination
i. Even if private entity, must seek Cy Pres for discrimination because federally
regulated
1. Example: St. Mary’s is a private institution but receives federal funds
K. Supervision of Charitable Trusts
a. Attorney general  responsible for enforcement and oversight of charitable trusts
b. But the attorney general tends to get involved only: (1) with large trusts; or (2) if there is
a breach
c. Who else can enforce?
i. Settlor can enforce the Charitable Trust
1. Uniform Trust Act
2. Texas view
Charitable Trusts can be 3. This also applies in private trusts
enforced by: (1) the
attorney general; (2) the
ii. Beneficiaries with Special Interested May Sue to Enforce Charitable Trusts
settlor; and (3) the intended 1. Elderly person in a home for the aged finds out the trustee is not using
beneficiaries
money for the home  standing
2. Sometimes: tax payer suits or citizen suits
iii. Traditionally  others cannot
1. See Smithers v. St. Luke’s Roosevelt Hospital – Mr. Smithers pledged
$10 million to a hospital for the Smithers Alcoholism Center
a. Smithers is going to approve details
b. Hospital buys mansion for center
c. Smithers and hospital disagree; reconcile five years later
d. Smithers dies
e. His widow discovers that the hospital is selling the building and
using money for other operations
f. This court breaks from traditional rule and allows widow to
enforce trust because the hospital’s actions were egregious
g. Dissent  this is not the traditional view; we want to discourage
nuisance actions by family members
L. “Really Big Charitable Trusts” and Politics
a. Hershey Trust  establishes school for orphan boys
i. Was worth 8.8 billion in 2011
ii. Half of the assets are in Hershey Corporation  IT IS NOT DIVERSFIED
iii. Trustees want to sell; Hershey residents object because they believe it will cause
the plant to plummet
iv. Attorney general’s office wants to block the sale of Hershey stock
1. Why? AG is elected

CAITLIN SULLIVAN_74
 2. Shows a conflict between the trust and politics
v. The trust would be better served to sell but the AG serves the community
and the people of Pennsylvania are better served by the stock remaining
b. Bishop Estate  the Bishop trust had widespread corruption
i. The last remaining Hawaiian royal family member left her estate in trust for the
education of Hawaiian children
ii. A huge estate; spending only 70 million of the trust’s 200 million annual income
iii. The trustees of the Bishop trust were paying themselves nearly 1 million a year
iv. Court appointed trustees; trustees were paying the court, so lots of corruption!
v. IRS threatened to remove non-exempt status
vi. All trustees were removed; new trustee selection process; limits on fees; trustees
were no longer permitted to be involved with day-to-day operations with school
M. Federal law and Charitable Trusts
a. To retain tax-exempt status:
i. Charities must expend at least 5% of the value of their endowment each year;
ii. (Larger) Charities must make public disclosures Form 990:
1. Assets;
2. Expenses;
3. Gov’t structure;
4. Salaries of their top five employees.
b. Should Charitable Trusts be perpetual?
i. Posner (7th Circuit Law and Economics Judge) excerpt:
1. Charitable foundations are inefficient;
2. They do not sell anything;
3. They have no competition;
4. They do not have accountability like regular corporations do;
5. No property interest (trustees are not owners)
ii. Posner suggests the Charitable Trust should have to distribute income and should
terminate
1. Gates foundation agrees (terminates 50 years after the death of the
survivor of Gates and Buffett)
XVIII.
Judge Spencer: Guardianship
A. Importance  Guardian and ward are legal terms used to indicate the relationship between
someone who protects another (the guardian) and the person being protected (the ward)
B. Types of Guardianship
a. Person
b. Estate
C. Types of Persons who Need Guardianship
a. Minors  they age out;
b. Developmentally disabled  needs are different; they will not recover
c. Elderly (dementia; Alzheimer’s)
d. Head injuries  they could potentially improve
e. Significant health issues (tumors; strokes)
D. Attorneys
a. To be an attorney ad litem or file for a guardianship must take bar certification court

CAITLIN SULLIVAN_75
 b. The guardianship needs attention every year
E. Lay People
a. Must also take a course
F. Creation of Guardianship
a. Must show that the proposed ward is incapacitated
i. Has to be done by a medical exam conducted by a MD or DO
1. Exception  people who are intellectually or developmentally disabled
can be psych
ii. Needs to be specific about what the ward is capable or incapable of
iii. May use letter from physician
1. This is hearsay; if someone wants to get particular about it
2. Could use testimony over phone
b. Must be the Least restrictive Guardianship
i. This is a policy of Texas!!
ii. Need to be as narrow as possible
iii. Need to preserve as many rights as possible for the ward
1. Example: preserve the right to vote; right to marry
iv. Needs to be individualized; tailored to the ward
c. Jurisdiction
i. Bexar County  has statutory probate court
ii. In smaller counties, you may not have specialized probate courts
iii. May be in front of a county court at law judge (could potentially not even be an
attorney)
d. Emergency Guardianship
i. Temporary
1. Example: grandma is walking down the street naked waving a flag
ii. Application sworn and written;
iii. Need attorney ad litem;
iv. Need notice to the ward;
v. Need a hearing within 10 days
vi. Lasts up to 60 days
vii. Can extend to nine months
viii. Evidentiary standard  substantial evidence of emergency harm
1. This is a lower standard
e. Application for Guardianship
i. Standing  anyone can petition for guardianship
1. Neighbors; friends; any interested person
2. San Antonio has an agency that petitions
ii. Most of the time family members
1. Most of the time goes smoothly unless the family is treating as
“pre-death will contest”
iii. Notice to the ward
1. Must serve the ward the notice
2. Cannot be to the mother; cannot be to the caretaker; cannot leave with
nurse
3. A Sheriff or Constable must serve
4. Other persons need notice  proposed ward’s spouse, parents, POA,
adult children, administrator of facility

CAITLIN SULLIVAN_76
 f.Process
i. Court must appoint attorney ad litem
1. Must meet and discuss with the ward
2. Attorney ad litem advocates for the client’s wishes
3. Most often, if the client is capable of discussing wishes, they do not want
a guardianship
a. You would be opposing guardianship
ii. Court can appoint guardian ad litem
1. Advocate for best interests
2. Not common
iii. If it is a contested guardianship, the ward may hire own attorney
iv. Who can be a guardian?
1. Statutory list:
a. Spouse;
b. Parents;
c. Children.
2. Disqualifications:
a. Must be in (1) good character and (2) no conflict of interest with
the ward
b. Probably not a felon
c. Need to be “bondable” (if they have money problems, likely will
not be)
v. Hearing
1. The ward must be present at the hearing unless it would be detrimental
to them or their health
2. Can ask for a jury trial
3. Hearing can be closed to the public if the ward requests
vi. Standard of Proof  clear and convincing evidence
1. Need clear and convincing evidence of:
a. Incapacity of the proposed ward;
b. There is no feasible alternative;
c. Best interest of the ward.
G. Mediation
a. Mediation is more common in wills, trusts, and guardianship
b. Cannot mediate capacity  it is a judicial determination
c. The court may or may not accept what the parties agree to
H. Guardianship Process and Duties
a. Steps  order, oath, bond
b. Duties
i. Must file an inventory of assets within 90 days
ii. Must establish monthly allowance plan for the ward within 30 days.
1. This needs to be approved by the court;
2. Includes: rent, facility, mortgage, utilities, entertainment money,
hairdresser, etc.
iii. Bond  equivalent of all personal assets PLUS one year’s income
1. Guardian must qualify
2. If it is a “big” estate, they need to get a big bond
3. May need to pass criminal background check

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 c. Authorities
i. Of a person  acts in the best interest of the ward
1. Can decide where the ward lives; who their doctor is; how often they
visit the doctor
2. Could be detailed personal care or broader concept
ii. Of the estate  must use the standard of care of a prudent person as would use
with your own property
1. Portfolio theory (pg. 59)
2. Must file an investment plan with the court within 180 days (as needed)
d. Reporting
i. Every year must report
ii. Of the estate  annual accounting
iii. Of the person  their condition
1. Did the ward go to the doctor; vital signs; where do they live
e. Renewal of Letters
i. Need to renewed annually; they last one year and four months
f. Termination
i. Death of ward
ii. Majority of ward
iii. Recovery of ward
I. Alternatives to Guardianship
a. Management trust
i. Court can initiate
ii. Corporate trustee
iii. Expensive; used for larger estates
iv. Continues for the benefit of a minor until they are age 25
b. Registry
i. Can deposit funds in to the registry for minors
ii. For smaller trusts; $100,000 or less
iii. Managed as a group
iv. Distributed to the minor when they turn 18
c. Regular inter vivos trust
i. If you are competent at the moment but know you have dementia, you can set up
the trust in advance
d. Community Property Management
i. If you are incompetent but are married; your spouse can automatically manage all
community property and may have a POA for other decisions
e. POAs (pg. 48)
i. Probably most common
ii. Can also use a pre-need designation of guardian  if you are aware that you will
need a guardian; can designate
f. UTMA for Minor’s Assets
g. Special Needs Trust (pg. 66)
i. This preserves Medicaid eligibility
h. Representative Payee
i. Receive certain benefits
i. Joint bank accounts (pg. 46)
j. Supportive decision maker

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 i. Designate the ability to go with the ward to appointments;
ii. Broader than health care
iii. Doesn’t give you authority but gives the right to help
k. Civil Mental Commitment
i. Short term when you are a danger to yourself or others
ii. Standard  clear and convincing evidence
iii. They have the capacity to improve so they are not a good candidate for
guardianship
l. Specialized criminal courts  relate to civil commitment field
m. Other available services beyond the scope
XIX.
Powers of Appointment
A. Powers of Appointment  gives the donee the ability to designate who will take property under
the trust or estate
a. Donor  creator of the power ANALYZING POWERS
OF APPOINTMENT:
i. Often your testator or the settlor of the trust
ONLY SPECIAL
POWERS HAVE b. Donee  grantee of the power First: is it a general or
OBJECTS! i. Beneficiary of the will or trust special power?
c. Objects  people who can receive the property Second: is it
i. People that the donee can give the property to exercisable presently
(inter vivos or by
d. Takers in default  who takes if power is not exercised
deed), in a will
i. May or may not be named (testamentary) or
ii. If the power of appointment is not exercised, they will take both?
B. Powers of Appointment are flexible and valuable
a. A method of “not making decisions today” for people who will have to
deal with the consequences down the road
b. “Postpones” determination of how assets are distributed to a later time
C. General Powers of Appointment
a. Powers that allow the donee to appoint to:
i. Themselves;
ii. Their estate;
iii. Their creditors;
iv. Or creditors of their estate
b. Essentially  the donee can take the property for themselves
c. Often says: “You can appoint to anybody”
d. A general power is the equivalent of ownership
e. General powers are typically used for spouses
D. Special Power of Appointment
a. Power that allows the donee to appoint to anyone EXCEPT
i. Themselves;
ii. Their estate;
iii. Their creditors;
iv. Or creditors of their estate
b. Example: “To Alice for Alice, then Alice has the power to appoint the remainder to her
children”
c. Only special powers have objects

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 E. When is the Power Exercisable?
a. Presently exercisable  inter vivos or by deed
b. Testamentary  in a will
c. Both
F. Examples:
a. O conveys to A in trust, to pay the income to A for life, and A may appoint by deed or
will as she sees fit, and if she does not appoint, then to B
i. Is this general or special?
1. It is general power  “can appoint as she sees fit”
ii. Is this exercisable presently, by will, or both?
1. She can do by deed or will  it is both
2. She can appoint to herself now; she could appoint to her children now or
by will; she can appoint to whomever and whenever whatever she wants
iii. B is the taker in default
iv. No objects because it is a general power!
b. O conveys to T in trust, to pay the income to A for life, and on A’s death, A may appoint
in her will among A’s children
i. Is this a general or special power?
Caution  Powers of
1. Special  she is limited “among A’s children” Appointment are subject to
ii. Is this exercisable presently, by will, or both? Rule Against Perpetuities
1. Testamentary  “in her will”
iii. No listed takers in default
1. If you do not have listed takers in default but you have objects, the
objects are the takers in default
G. It is important to classify because of tax consequences
a. General powers are typically included in your estate because you can take
i. Usually used in estate planning for spouses only
b. Whereas special powers are not
i. Special powers are more prevalent
H. Why Use a Power of Appointment?
a. The donee can decide how the property will be distributed so to better suit the family in
the future
I. It is possible to have broad powers to a donee
a. A person can be: trustee; life income holder; AND hold a special power to appoint
Takeaway: do not need
i. Example: O conveys to A in trust, to pay the income to A for life, then upon her
separate people as trustee, death, A may appoint in her will among her children
life tenant, power holder; b. Wearing many hats
can have a power plus
c. A power holder can also have a “superpower”
i. The power to consume the principal of the trust
1. Support standard
ii. Or withdraw a certain amount each year
J. Creation of Power of Appointment
a. Can be express or implied;
i. Most are express in a will or trust
b. Not required to use “magic word” of power
i. Can create without “power of appointment”
ii. But need language that is more than precatory (request)
c. Standard  create to intent

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 K. Release of Power of Appointment
a. Do not have take your power
b. By releasing the power, you will determine who will take in the future
c. Generally  may release your power
i. Exception: imperative power  the donee must exercise; donee has a duty to
exercise
ii. Hard to do
d. Example: O conveys to T in Trust to A for life, and to such persons as A may appoint by
will, and in default of appointment to A’s children
i. Is it general or special?
1. General  “To such persons as A may appoint”
ii. Is it exercisable presently, by will, or both?
1. Testamentary  “by will”
iii. A’s children are the takers in default
iv. If A releases the power of appointment, then A’s children will take upon A’s death
1. Or A could release life estate and A’s children would take
e. Partial releases are possible
i. Going to release the property as to 50% of the property;
ii. Release the power as it pertains to Redacre but not Blackacre and Whiteacre;
iii. Release for some of the children;
iv. Not as common
L. How to Exercise Power of Appointment
a. Testamentary  in the will, “I exercise my Power of Appointment in favor of A & B,
my children”
i. Often, this does not occur
b. Inter vivos or by deed  in a document, “I hereby appoint this property
Residuary clause  A to myself; my mortgage company”
testamentary clause that
disposes of any estate c. If the donee dies and have not exercised their testamentary Power of
property remaining after the Appointment, does a residuary clause cover?
satisfaction of all other gifts.
i. Majority view  no; residuary clause does not exercise Power of Appointment
1. Texas appears here through case law
ii. Minority view  yes; residuary clause does exercise Power of Appointment
d. Donor options:
i. Can choose state law that will apply if creating the power pursuant to a trust;
ii. Explicitly say: “Giving Power of Appointment to donee but donee must explicitly
exercise power in will or goes to takers in default”
e. Blending clause  language within the residuary clause
i. “I devise all my rest, residuary, and remainder in my property, real, personal, and
mixed, including any property over which I have a power of appointment to
A”
ii. Will typically exercise power of appointment
M. Can the Power of Appointment Be Used to Make a New Power or Create a New Trust?
a. Create a new trust:
i. Exercise a Power of Appointment in favor of children in trust:
1. O conveys to T in trust to A to pay the income for life, and A may
appoint by deed or will as she sees fit
2. Exercise power of appointment to create a new trust: A conveys to H in
trust to children, B&C to pay the income for life

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 ii. Common law  no
iii. Modern trend  yes
iv. Texas  yes
b. Create a New Power
i. O conveys to T in trust to A to pay the income for life, and A may appoint to her
children
ii. Upon death, A conveys to B&C to pay the income for life, and B&C have a
general power of appointment in each for his/her share
iii. Cases split; modern trend  yes
iv. Caution  can run afoul of the Rule Against Perpetuities
N. Exclusive Power v. Non-Exclusive Power
a. Exclusive Special Power  can exclude any of your objects; give to all objects
i. Most special powers are exclusive
ii. Powers are presumed to be exclusive
iii. Example:
1. O conveys to T in trust, to A for life, with a power in A to appoint to
children. A has three children: A; B; C.
2. Can typically give it all to A, some to each etc.
b. Non-Exclusive Special Power  must give something to all objects
i. “To A for life, with the power of appointment to appoint to all of her children but
she may decide how much each children gets”
ii. Look at the language of the power
O. Fraud on a Special Power
a. An attempt to appoint to someone that is not an object of your power
i. Will be a void/ineffective exercise of power of appointment
b. People will use “side deals”
c. Example: D has a special power to appoint to kindred (relatives; heirs). She wants to
appoint to her husband (who is not an heir in the statute). She appoints $250,000 to her
cousin, Paul who agrees to appoint $100,000 to husband.
This is likely the better view d. Two views:
i. Can be void altogether;
ii. Can give the portion that Paul would have ($150,000)
N. Allocation and Capture
a. Doctrines used to assist exercise of a power
b. Allocation  when the donee, in good faith, attempts appoint to a non-object or appoints
in a way that violates RAP
i. If the donee uses a blending clause in will or deed, the assets are blending
together
ii. Doctrine of allocation steps in to allocate efficiently
iii. Example: A owns $350,000 of assets; has a POA over an additional $100,000 to
appoint to her issue
1. This is a special power of appointment
2. Leaves all her property with a blending clause (pg. 82)
3. Leaves $100,000 to daughter-in-law; and the rest to her daughter
4. But daughter-in-law is not an object
5. Allocation will gives $100,000 of power of appointment to daughter; the
daughter-in-law will take from personal assets
a. Donna (daughter) will take $100,000 from trust appointment;

CAITLIN SULLIVAN_82
 $250,000 from A’s personal property
b. Betty (daughter-in-law) will take $100,000 from A’s personal
assets
iv. Only works with a blending clause
c. Capture  capture the power of appointment assets and bring them into the donee’s
estate
i. Typically arises when the attempted exercised power lapses or violates RAP
ii. Applies to general powers
iii. Need a blending clause
iv. Example: A has general power of appointment; will says “$10,000 goes to Bob
(but Bob predeceases) and $15,000 to my dog, Trixie (violates RAP)
1. Bob: lapses
a. Would drop to residue
2. Trixie trust violates
a. Would drop to residue
3. Capture takes and gives to Charlie
v. “Grabs the power of appointment assets and allows to be in the donee’s estate”
O. Failure to Exercise Power
a. General power
i. If takers in default are named  they take
ii. If no takers are named  goes to donee’s estate
1. But remember capture might apply!
b. Special power
i. If takers in default are named  they take
ii. Without takers in default  the objects of the power take equally
1. If they can be defined
iii. If cannot define objects  donee’s estate
XX.
Charlie Granstaff: Tax Attorney
A. Lawyer and CPA
B. Estate taxes; gift taxes; generation-skipping taxes
a. These are transfer taxes Estate tax  tax on giving
Inheritance tax  tax on
b. Purpose  public policy that you can pass wealth but prevent getting
ultra-wealthy from hoarding wealth; transfer the intergenerational
wealth
C. There are limits for the amount that you can transfer to another (inter vivos; testamentary)
a. If you exceed the limit the gov’t will take 40% of the value over the limit
D. What is included in taxable estate?
a. Even non-probate assets; joint tenancy; POD; TOD; life insurance
b. General Powers of Appointment are included in the donee’s taxable estate
E. Estate Tax Exemptions
a. Modest Limit before Bush Administration - $600,000
b. Bush Administration – passed tax law for 10 years; stutter stepped exemption
c. ATRA of 2012 – made $5 million exemption permanent; re-unified estate tax; gift tax;
generation-skipping taxes
d. Trump Tax Act – doubles ARTA
Taxes are “linked” now; do
want worry about
distinguishing $12.9 mil is CAITLIN SULLIVAN_83
cap
 i. Current exemption is $12,920,000 a person; $25,840,000 a couple
ii. This is adjusted for inflation; for January will raise to $13,610,000
iii. The Trump law will expire; ATRA will not
1. On January 1, 2026 the law will revert to ATRA
F. Gift Tax
a. Annual Exclusions for gifts  $17,000
i. Adjusted for inflation in January will increase to $18,000
b. Can make a present value gift to each person annually and it will not count towards
“big” exemption
c. Cannot accumulate; “use or lose” each year
d. But can make a gift each year
e. Gifts for health or educational purposes directly to service provider  does not count
towards annual gift exclusion or “big” exemption
G. Generation-Skipping Tax
a. Limit  $26 million
b. We want to tax each generation; if you try to “leap frog” a generation, there will be a
40% tax over the value over the excess of the limit
i. Example: Mom and Dad have a $36 million estate; transfer to grandchildren;
they skip their child; will be taxed 40% over the 26 million
ii. Try a formula
H. Capital Gains
a. Purchase property for $100,000; now it’s worth $1 million
i. If you sell during your lifetime, you will pay taxes on your capital gain of
$900,000
1. Basis: $100,000
2. Capital Gain: $900,000
ii. If you transfer to daughter at death, you get basis adjustment
1. Step up the basis from $100,000
2. Will be recalibrated at $1 million
3. If she sells for $1 million  there is no capital gains
iii. The only way to get basis adjustment is to die
1. An inter vivos transfer  it will $100,000 basis!
b. Spouses
i. If one spouse dies and it is community property  get a step up in basis for
both halves
1. Example: Husband passes and the property sets up to $1 million for both
halves
ii. A quirk in community property law; different in common law
c. Cannot Solve both Estate Tax and Capital Gains Tax
i. Want to knock-out the bigger risk
1. Estate Tax  Lord Voldemort
2. Capital Gains  Bellatrix Lestrange
I. Techniques to Reduce Tax Transfer Burden
a. Credits
b. Charitable planning  giving to charity, there is no tax; 100% exempt
i. Give 1/3 to St. Mary’s; 1/3 to St. Jude; 1/3 to ASPCA
ii. Can try a Charitable Remainder Unitrust
c. Life insurance  can buy for the liquidity

CAITLIN SULLIVAN_84
 d. Valuation principles and freeze planning
e. Opportunity Shifting
J. Traditional Testamentary Estate Plan
a. Bypass martial trust  “tax free trust”
i. Fill this with the tax exemption amount
1. In stocks; bonds; property, etc.
ii. Negative is there is no step-up; if you sell asset, will have capital gains tax
iii. Try to have everything pass in one estate to take full advantage but want the
surviving spouse to take advantage
1. Stack together the exemptions of the spouses with the dual trust format
2. If the client has less than the taxable estate, you recommend capital
gains!
b. QTIP trust  exempt from tax until the surviving spouse dies
i. The spouse has interest in the property
ii. Do not have to do a marital trust to get a deduction  can give it to the
spouse outright
c. Portability  surviving spouse can elect to use unused exemption
i. Came from ARTA
ii. Allows to defer until the first person to die; the survivor spouse can make
election of tax exemption
d. Disclaimer will + portability  a survivor spouse can disclaim their gift and if they
exercise disclaimer, goes to bypass trust
i. If you have a large asset, can contain it outside of the surviving spouse’s estate
ii. “Wait and see”
K. Revocable Trust versus a Will
a. Good faith advantages of revocable trusts over will:
i. Concerned about disabilities;
ii. Out of state property;
iii. Privacy feature (assets in trusts are not included in inventory).
L. Crummey Power
a. Create an inter vivos trust and want to make a gift to the trust for $17,000 exemption,
must put Crummey Powers in trust
i. Has to be a present gift
b. Crummey Powers  convert a future gift into a present gift; beneficiary can take assets
out that you gift within a modest time period
i. Unlimited
M. Grantor Trusts
a. Can create a trust to make gifts into  treated as the owner for tax purposes
b. Example: ninety year-old-woman was receiving $1.8 million monthly;
i. Had $45 million in her checking account; was still getting more in mineral
royalties
ii. Caused a gift tax; pay gift tax in grantor trust
iii. Three-year limit
N. Inclusion Statutes (Gotcha’s)
a. Try to make a gift but retain income from asset  THROWN BACK TO ESTATE
b. Create a trust, you are trustee, can accidentally have it go back to estate
c. Life insurance  regardless of who the beneficiary is, it will be included in your estate

CAITLIN SULLIVAN_85