Wills Trusts Question Analysis
Hank, an avid skier, lived in State X with his daughter, Ann. Hank’s first wife, Ann’s mother, had died several years earlier.
In 1996, Hank married Wanda, his second wife. Thereafter, while still domiciled in State X, Hank executed a will that established a trust and left “five percent of my estate to Trustee, to be paid in approximately equal installments over the ten years following my death to the person who went skiing with me most often during the 12 months preceding my death.” The will did not name a trustee. The will left all of the rest of Hank’s estate to Wanda if she survived him. The will did not mention Ann. Wanda was one of two witnesses to the will. Under the law of State X, a will witnessed by a beneficiary is invalid.
In 1998, Hank and his family moved permanently to California. Hank then legally adopted Carl, Wanda’s minor son by a prior marriage.
In 2001, Hank completely gave up skiing because of a serious injury to his leg and took up fishing instead. He went on numerous fishing trips over the next two years with a fellow avid fisherman, Fred.
In 2003, Hank died.
In probate proceedings, Wanda claims Hank’s entire estate under the will; Ann and Carl each claim he or she is entitled to an intestate share of the estate; and Fred claims that the court should apply the doctrine of cy pres to make him the beneficiary of the trust.
1. Under California law, how should the court rule on:
. Wanda’s claim? Discuss.
. Ann’s claim? Discuss.
. Carl’s claim? Discuss.
Outline
Answer
1. UNDER CALIFORNIA LAW, THE COURT’S RULING ON:
A. WANDA’S CLAIM
Wanda will argue that the will is valid and she is therefore entitled to at least 95% of Hank’s estate, as described under the will.
1. Validity of the Will
a. Choice of Law
In order to determine whether the will is valid, it must first be decided what law will apply. The facts state that Hank dies while living in California. A will will be valid if it is valid in the state in which it was executed, the state in which the testator was domiciled at the time of execution, or the state in which the testator died. The will was executed in State X, and while Hank was domiciled in State X. Although the facts state the will would be invalid in State X, it is not necessarily invalid in California, the state in which Hank was living at the time of his death. The following is a discussion of the will’s validity in California.
b. Requirements for an Attested Will
Under California law, for an attested will to be valid, it must be signed by the testator in the presence of two disinterested witnesses. An interested witness is one who is a beneficiary under the will. If a witness is “interested”, the entire will is not invalid, but there is a presumption that the portion which the interested witnesses received is invalid.
Under the facts of this case, Wanda was to receive 95% of the estate. In addition, she was one of two witnesses to the will. Therefore, there is a presumption that the portion left to her is invalid. If Wanda cannot overcome this presumption, she will not be left with nothing; rather, she will still be entitled to her intestate portion under the will.
c. Wanda’s Intestate Portion
Under intestacy, a spouse is entitled to receive all community property, and at least 1/3 and up to all of her deceased spouse’s separate property, depending on whether or not the decedent left any surviving kin. In the present case, Hank left Ann and Carl. Where two children are left, the testator’s estate is divided in 1/3 portions among the spouse and the two children. Therefore, Wanda will obtain 1/3 of Hank’s remaining estate.
B. ANN’S CLAIM
1. Omitted Child
Ann will argue that she was an omitted child and, in the event the will is found valid in its entirety, other interests should abate and she should receive an intestate portion of Hank’s estate. However, Ann will be unsuccessful in this argument because Ann was alive and known about prior to Hank’s execution of the will, and she was not provided for on the will.
2. Intestate Portion
Ann will therefore argue that the aforementioned devise to Wanda is invalid and that she is in this way entitled to her intestate portion of the remaining interest. As discussed above, Ann will be entitled to 1/3 of Hank’s estate through intestacy.
C. CARL’S CLAIM
1. Pretermitted Child
Carl will first argue that he was a pretermitted child, as he was adopted after the will was executed. Therefore, he will argue that, if the devise to Wanda is valid, her interests should abate to account for his intestate portion. However, the fact that Ann was excluded from the will harm Carl’s interest, as this will evidence as intent not to devise any portion of his estate to his children.
2. Intestacy & Adopted Children
Therefore, Carl will argue that the devise to Wanda is invalid and that he should be entitled to a portion of the remainder of the estate through intestacy. The fact that Carl is adopted and not a child by Hank’s blood will not affect Carl’s portion because under California law, adopted children are treated the same in intestacy as children by blood.
2. COURT’S RULING ON FRED’S CLAIM
Hank’s Will also included a trust. This is called a pour-over will. In order for the pour-over will to be valid, it must meet the requirements of a valid trust.
A. Validity of the Trust
1. Requirements
In order for a trust to be valid, it must have 1) an ascertainable beneficiary, 2) a settlor, 3) a trustee, 4) a valid trust purpose, 5) intent to create a trust, 6) trust property (res), and 7) be delivered.
2. Lack of Trustee
The facts state that the trust lac[k]ed a trustee. The lack of a trustee, however, is not fatal, as a court can appoint a trustee to administer the trust.
3. Trust Property
The trust property is clearly identified in the will, as “five percent of my estate...to be paid in approximately equal installments over the 10 years following my death...” Therefore, this requirement is satisfied.
4. Delivery
The delivery requirement is met through the inclusion of the trust into Hank’s will.
5. Unascertainable Beneficiary
The fact that the beneficiary is not named poses the biggest problem for the trust. In order for the trust to be valid, a beneficiary must be ascertainable. In the present case, the beneficiary is not named, but rather is described as “the person who went skiing with me most often during the 12 months preceding my death.” Courts can use a variety of methods to ascertain the identity of a beneficiary when he or she is not specifically named on a will, such as: Incorporation by Reference or Facts of Independent Significance. Neither one of these are helpful in the present case.
Incorporation by reference allows a testator to incorporate into a will a document or writing if it is in existence at the time of the will, a clear identification is made, and the intent to incorporate is present. In the present case, the identity of beneficiary was not presently in existence. Therefore, this method fails to assist in ascertaining the beneficiary.
Facts of independent significance can also be used to incorporate outside items into a will. Although the identity of the person most frequently skiing with Hank would have independent significance, it is of little help here since Hank suffered a serious injury to his leg and thus gave up skiing. Therefore, this method also fails to assist in ascertaining the identity of a beneficiary.
When there is no ascertainable beneficiary, a resulting trust occurs. This means that the trust property returns to the settler’s estate.
5. Cy Pres
Fred, however, will argue that under the doctrine of cy pres, the property should not be returned to the settlor’s estate, but should go to him instead.
Cy pres is a doctrine which provides that, where a charitable trust fails for lack of a beneficiary or other impracticality, the court should apply cy pres and grant the trust property to another charity which conforms with the trust purpose.
In the present case, Fred will argue that the purpose of the trust was to further leisurely sports and camaraderie. Fred will compare fishing with skiing, and argue that the two activities were similar in that they provided the opportunity for friends to come together and enjoy each other. Therefore, because it [sic] the two purposes are so similar, and because Fred went on numerous fishing trips with Hank, Fred will argue that he should be entitled to the trust property.
However, in order for cy pres to apply, the purpose of the trust must be charitable. Under the Statute of Elizabeth or the common law, this trust purpose, however Fred defines it, is not charitable. It does not alleviate hunger, help sick, further education, or health. Therefore, the doctrine of cy pres is inapplicable, and a resulting trust will occur. Therefore, the 5% will retain to Hank’s estate and be divided among Wanda, Ann, and Carl accordingly.
Therefore, Fred will get nothing, and Wanda, Ann, and Carl will each get 1/3 of Hank’s separate estate, and Wanda will get all of her and Hank’s community property.