Wills, Trusts and Estates

 Course Syllabus

Because of the complexity and mathematical nature of this course, the courseware is a bit longer and more complex than in other courses. Therefore, instead of putting the entire courseware under the “required reading” category, we are splitting the courseware into “required reading” and “optional reading.” On this syllabus, you should treat the reading sections that appear in blue as “required” reading and the sections that appear in red as optional reading. We still recommend that read as much of the courseware as you can all of it if possible. However, if you don’t have time to read all of the courseware, it is recommended that you read the sections in blue before the sections in red.

Week 1 Class 1 (Class #1)              

Topic: Introduction and Inheritance without a Will

This class will begin with an overview of estate planning, introducing how a person has a right to transfer property at death.  Next, we will review what happens to a person’s assets when he or she dies without a will.  Specifically, we will cover how intestate succession rules determine who inherits what, giving consideration to how the state handles step-siblings, non-marital and adopted children and when the state is entitled to receive someone’s assets. Further, we will examine specific protections against disinheritance by discussing certain safeguards available for spouses and children, contrasted with what circumstances make someone ineligible to inherit from an estate.

Reading:

I.  Introduction to Estate Planning

A.  Overview of Estate Planning

B.  Intestate Succession Rules

C.  Protection Against Disinheritance

D.  Qualifications on the Right to Inherit

Week 1 Class 2 (Class #2)               

Topic: Planning for incapacity so as to avoid depleting the estate

In this class, we will also cover different ways to plan for incapacity, such as the use of living wills, healthcare proxies and durable powers of attorneys. We will also spend some time on a discussion of Medicaid and Medicaid planning; specifically, the various methods that are available to make sure that long term care that may be necessary does not deplete the estate of funds.

Reading:

I.  Introduction to Estate Planning

E.  Planning for Incapacity

Week 1 Class 3 (Class #3)          

This class will begin our discussion of wealth transfer taxes. Initially, we will discuss the different types of taxes an estate might be subject to, namely gift, estate and generation-skipping transfer taxes. This class will be devoted toward discussing the federal gift and estate tax systems and how those systems impact one another. Next, we will take an in depth view of gift taxes and how they operate.

Topic: Wealth Transfer Taxes; Gift tax

Reading:

II.  Federal Wealth Transfer Taxes

A.  Introduction to Gift, Estate and Generation-Skipping Transfer Taxes

B.  Gift Tax

            1.  Taxable gifts

            2.  Exclusions

            3.  Marital deduction

            4.  Charitable deduction

            5.  Computation of gift tax

Week 2 Class 1 (Class #4)             

Topic: Estate Tax

 This class will be devoted to discussing the estate tax and its ramifications. We will cover which assets are included in the decedent’s estate and discuss how estate tax liability is determined. In addition, we will discuss the various estate tax exemptions that exist and various techniques that can be used to minimize estate tax liability. We will also discuss the role of the Generation Skipping Transfer Tax (GST Tax) in estate planning.  Included in this discussion will be a review of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and how it affects estate taxes.  

Reading:

II.  Federal Wealth Transfer Taxes

C.  Estate Tax

            1.  Rates

            2.  Applicable exemption amount (unified credit)

            3.  “A-B” trust planning (credit shelter trust)

            4.  Step-up in basis

            5.  Marital deduction (QTIP and QDOT)

            6.  Charitable deduction

            7.  Expenses

            8.  State wealth transfer taxes

D.  The Gross Estate

            1.  Real property

            2.  Stocks and bonds

            3.  Mortgages, notes and cash

            4.  Insurance

            5.  Jointly held property

            6.  Miscellaneous property

            7.  Transfers during decedent’s lifetime (within three years of death)

            8.  Powers of appointment

            9.  Computation of estate tax (tax apportionment)

E.  Generation-Skipping Transfer (GST) Tax

F.  Disclaimers

G.  Impact of the 2001 Act (EGTRRA)

Week 2 Class 2 (Class #5)            

Topic: Drafting and executing a valid will

In this class will begin our discussion of wills.  Initially, we will give an overview of wills, including the binding nature of the instrument and consider how different types of property, such as personal and real property, are disposed of by will.  In contrast, we will itemize which items of property are not disposed of by a will.  Next, we will provide in-depth coverage of the statutory requirements for executing a valid written will, including testamentary capacity, signature requirements, the role of witnesses and how fraud, undue influence and mistakes could impact the validity of a will.  Additionally, special consideration will be given to the attorney-draftsman as beneficiary or fiduciary and how to safeguard the will once it is completed.  In addition to written wills, we will discuss other types of wills, such as holographic and nuncupative wills.  The next area for discussion will be the components of wills, namely integration, incorporation by reference, the doctrine of independent significance and testamentary gifts to trust.  Lastly, we will finish with an examination of contracts to make wills, which are formed primarily between spouses.

Reading:

III.  Execution, Validity and Components of Wills

A.  Historical Overview of Wills           

B.  Items Not Disposed of by a Will (Nonprobate Property)

         1.  Joint tenancy

         2.  Totten trusts

         3.  Life insurance

         4.  Retirement plan benefits

C.  Statutory Requirements for a Valid Written Will

            1.  Testamentary capacity

            2.  Signature requirements

            3.  Witnesses—attestation versus self-proving affidavit

            4.  Absence of fraud and undue influence

            5.  Absence of mistakes

            6.  Special considerations for attorney-draftsman as beneficiary or fiduciary

            7.  Safekeeping of wills

D.  Other Types of Wills

            1.  Holographic wills

            2.  Nuncupative wills

E.  Components of Wills

            1.  Integration

            2.  Incorporation by reference

            3.  Doctrine of independent significance

            4.  Testamentary gifts to a trust

F.  Contracts to Make Wills

Week 2 Class 3 (Class #6)            

Topic: Testamentary gifts

In this class we will continue our discussion of wills, focusing on their construction (interpretation). First, we will discuss when extrinsic evidence may be introduced to explain ambiguities.  Also, we will cover conditional wills and explain the types of testamentary bequests, which can be specific, demonstrative, general or part of the residual estate.  Next, we will tackle what happens when an asset listed in the will no longer exists (ademption) and when there are insufficient assets to cover all the expenses and/or bequests (abatement).

IV.  Construction of Wills

A.  Admissibility of Extrinsic Evidence

            1.  Latent ambiguities

            2.  Patent ambiguities

B.  Conditional Wills

C.  Types of Testamentary Bequests

            1.  Specific bequests

            2.  Demonstrative bequests

            3.  General bequests

            4.  Residuary

D.  Ademption and Abatement

            1.  Ademption

            2.  Abatement

Week 3 Class 1 (Class #7)             

Topic: Will beneficiaries

In this class, we will discuss lapse and antilapse statutes that cover what happens when a beneficiary is no longer around to receive a bequest.  Another provision we will cover that determines who is a beneficiary is the Uniform Simultaneous Death Act.  Additionally, beneficiary designations change for various reasons, so we will explore class gifts, pretermitted children, intentional omission and how changes in marital status affect who may inherit.  Lastly, we will cover the numerous ways to revoke a will, revive it via republication and modify it using codicils.

IV. Construction of Wills

E.  Lapse and Antilapse Statutes

F.  Changes in Beneficiaries

            1.  Describe the beneficiary

            2.  Change in marital status

            3.  Pretermitted children/minors

            4.  Intentional omission

            5.  Class gift

            6.  Beneficiary predeceases testator

            7.  Uniform Simultaneous Death Act

G.  Revocation

            1.  By operation of law

            2.  Subsequent instrument

            3.  Physical act

            4.  Partial revocation

            5.  Lost wills

H.  Republication and Codicils

Midterm Examination

Week 4 Class 1 (Class #8)          

Topic: Estate Administration

This class will focus on the process of probating a will, including review of what happens if there is a will contest.  We will start with a discussion of which court has jurisdiction over administrating an estate and the required time period for closing the estate.  Next, we will discuss the Uniform Probate Code, which has been adopted by some jurisdictions, coupled with states’ statutory requirements. Specifically, in discussing the probate process, we will study the role of the personal representative, from appointment to a discussion of his or her authority, responsibilities and liabilities.  Next, we will scrutinize the steps involved in managing the decedent’s estate, including inventory and appraisal, collection and preservation of assets, sale of property, dealing with creditors’ claims and final distribution of the decedent’s assets.  Lastly, for decedents with smaller estates, we will examine informal administration procedures. 

Reading:

V.  Estate Administration

A.  Probate and Uniform Probate Code

B.  Will Contests

            1.  Testamentary capacity/intent

            2.  Undue influence

            3.  Confidential relationship

            4.  No-contest “in terrorem” clause

C.  Personal Representative

            1.  Types of personal representatives

            2.  Appointment and qualification

            3.  Authority

            4.  Revocation of authority

            5.  Personal liability for torts

            6.  Personal liability on contracts

D.  Management of the Estate

            1.  Inventory and appraisal

            2.  Collection of assets

            3.  Preservation of assets

            4.  Sale of real property

E.  Distribution and Informal Administration

Week 4 Class 2 (Class #9)            

Topic: Private Trusts

This class will focus on the use of private trusts as another estate planning tool.  Specifically, we will start with a review of the elements necessary to create a trust, highlighting intent, concept of trust property, the parties to the trust and typical terms used. Our discussion in this class will survey the various methods for creating trusts, but we will focus primarily on the inter-vivos (“living”) trust and its role in estate planning, both as a means for avoiding probate and as a means for minimizing estate taxes.

Reading:

VI.  Private Trust Creation, Modification and Termination

A.  Elements and Limits on Creation and Duration of Interests

            1.  Intent

            2.  Trust property (res)

            3.  Parties to the trust (settlor, trustee, beneficiaries)

            4.  Terms

            5.  Rule Against Perpetuities

            6.  Suspension of the power of alienation

B.  Prohibited Trust Purposes

C.  Methods of Trust Creation

            1.  Declaration of trust

            2.  Transfer in trust (inter vivos or by will)

            3.  Exercise of a power of appointment

            4.  Contractual agreement

            5.  Statute

D.  Contract Law Considerations

            1.  Parol Evidence Rule

            2. The Requirement of a Writing—The Statute of Frauds

F.  Types of Trusts

            1.  Revocable Inter Vivos “Living” Trusts (as Will Substitutes)

            2.  Irrevocable Life Insurance Trusts (ILITs)

            3.  Resulting (implied) Trusts

            4.  Constructive Trusts

Week 4 Class 3 (Class #10)             

Topic: Interaction of Wills and Trusts

In this class, we will consider how trusts and wills work together in carrying out a testator’s wishes. We will look at various forms of testamentary trusts (trusts created by wills) and the purposes that they serve. In addition, we will discuss will provisions that “pour over” assets into trusts created during the settlor’s lifetime. Finally, we will discuss the revocation, alteration and modification of all types of trusts.

Reading:

VI.  Private Trust Creation, Modification and Termination

E.  Trusts and the Statute of Wills—Creation of Testamentary Trusts

            1.  Requirements

            2.  Secret trust (semi-secret trusts)

G.  Power to Revoke, Modify or Terminate Trusts

            1.  Power of Settlor to Modify or Revoke

            2.  Power of Trustee to Modify or Revoke

            3.  Power of Beneficiaries to Modify or Terminate

            4.  Power of Courts to Modify or Terminate

Week 5 Class 1 (Class #11)          

Topic: Charitable trusts

This class will continue our discussion of trusts, focusing instead on charitable trusts.  We will begin with a discussion of the underlying principle behind a charitable trust, public benefit, and explore the different types of permissible charitable purposes, such as relief of poverty, education, religion and health.  Next, we will delve into the limitations on charitable trusts, discussing mortmain acts and the applicability of the rule against perpetuities.  In addition, we will examine how to modify a trust via the Cy Pres Doctrine.  We will end with a discussion of various charitable trusts, such as charitable lead, remainder and annuity trusts and unitrusts. 

Reading:

VII.  Charitable Trusts

A.  Public Benefit

B.  Charitable Purpose

C.  Limitations on Charitable Trusts

            1.  Mortmain Acts

            2.  Rule against perpetuities

D.  Modification of Charitable Trusts—The Cy Pres Doctrine

E.  Order of Beneficiaries

            1.  Charitable Lead Trusts (CLTs)

            2.  Charitable Remainder Trusts (CRTs)

F.  Payment Method

            1.  Annuity Trusts (CLATs, CRATs)

            2.  Unitrusts (CLUTs, CRUTs)

Week 5 Class 2 (Class #12)             

Topic: Trusts Administration

This class will focus on how to administer a trust once it has been created.  Specifically, we will start with an examination of which jurisdiction has authority over the administration of the trust.  Next, we will examine the appointment and qualification of a trustee as fiduciary and then move on to talk about the responsibilities and authority of a trustee who is charged with maintaining the trust.  Furthermore, we will look at the specific functions undertaken by the trustee, including his or her duties, powers, compensation and potential liabilities.

Reading:

VIII.  Trust Administration

A.  Jurisdiction over Administration

B.  Appointment and Qualification of Trustee as Fiduciary

C.  General Responsibilities and Authority of Trustees

            1.  Functions—preservation and productivity of trust res

            2.  Trust terms and sources of trustee’s powers

            3.  Standards of fiduciary conduct

D.  Powers of the Trustee

            1.  Generally

            2.  Incur reasonable expenses

            3.  Power to lease

            4.  Power to sell

            5.  Power concerning claims

E.  Duties of the Trustee

            1.  Duty to administer trust according to its terms

            2.  Standard of care, skill and caution

            3.  Duty of loyalty to beneficiaries

            4.  Duty to secure and safeguard trust estate

            5.  Duty to segregate and identify assets

            6.  Duty to account

            7.  Duty to invest and to make property productive

F.  Trustee’s Compensation and Right of Indemnity

G.  Liabilities

            1.  Contract liability

            2.  Tort liability

            3.  Breach of trust liability

Final Examination