Backstop Defaults, Mandatory Obligations and General Predicates 17

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1 CONTENTS Acknowledgements xvii PART I Overview and Introduction 1 A. Overview: An Overdue Change in the Law-School Landscape 1 B. Introduction to the Subject Matter: The Anglo-American System of Descent 2 1. Limited Options 3 2. Mixed Solutions and the American Preference for Freedom of Descent 5 3. (A Few, Narrow) Limits on Transfer 7 a. The Historical, Common-Law Tradition 7 Maddox v. Maddox s Adm r, 52 Va. (11 Gratt.) 804 (1854) 8 b. Honored in the Modern Breach? 10 Shapira v. Union Nat l Bank, 315 N.E.2d 825 (Ohio Ct. Com. Pl. 1974) 10 c. The Real Remaining (Quasi-)Limitations 16 PART II Backstop Defaults, Mandatory Obligations and General Predicates 17 A. Intestacy and the Stirpii Intestacy: A Genuine, Good-Faith Default Construct Intestate Distribution by Representation: Three Systems 19 a. English (or Traditional) Per Stirpes 22 b. Modern (or American) Per Stirpes 23 c. The UPC System 24 d. Example 25 e. Comparative Distinctions and Aide-Mémoire B. Birth and Children Law and Ethics Coping with Medical Advance in Birth Technology 28 xi

2 a. Posthumous Children (the Common-Law Conception) 29 b. Posthumously Conceived Children 30 Astrue v. Caputo, 132 S. Ct (2012) 30 c. Surrogacy Law and Ethics Coping with Sociological Change 38 a. Nonmarital Children 38 b. Adoption 40 A creature of statute. 40 A branch of only one tree. 40 The UPC innovation 41 i. Equitable (or Virtual) Adoption 43 Luna v. Estate of Rodriquez, 906 S.W.2d 576 (Tex. Ct. App. 1995) 43 Johnson v. Rogers, 774 S.E.2d 647 (Ga. 2015) 49 ii. Adult Adoption 55 In re Trust Created by Belgard, 829 P.2d 457 (Colo. App. 1991) 55 iii. Historical Note: Adoption of Unmarriageable Partners 58 c. Pretermitted Children 58 Benjamin v. Butler (In re Estate of Jackson), 194 P.3d 1269 (Okla. 2008) 59 Robbins v. Johnson, 780 A.2d 1282 (N.H. 2001) 62 d. Non-Disinheritance 65 C. Love and Marriage Community Property Law 67 a. The Marital Community 68 b. Marital Property Separate-Property Law 74 a. Pivot Number One: From Support Theory to Partnership Theory 77 b. Pivot Number Two: From the Traditional Forced Share to the Augmented Estate and the Augmented Share 78 c. Pivot number three: The Anna Nicole Smith problem and the table of longevity The Three Pivots Reduced to Code Pre- and Postnuptial Agreements Ex-Spousal Predecease Pretermitted Spouses 89 D. Shuffling Off the Coil (and Planning for the Last Dance) Slayer Statutes 90 xii

3 2. Simultaneous death 91 Janus v. Tarasewicz, 482 N.E.2d 418 (Ill. App. Ct. 1985) Law and Ethics Coping with Medical Advance in Life Extensions 102 a. Power of Attorney 102 b. Advance Directive 103 c. Disposition of the Body 103 d. Euthanasia and Assisted Suicide 104 PART III Law of Wills 105 A. Introduction to the Law of Wills 105 B. Mental Capacity for Testation 107 C. Methods of Contesting/Undermining/Challenging Testator Competence Insane Delusion 111 In re Strittmater, 53 A.2d 205 (N.J. 1947) Undue Influence 116 In re Will of Moses, 227 So.2d 829 (Miss. 1969) 121 In re Will of Kaufmann, 247 N.Y.S.2d 664 (N.Y.App.Div. 1964) Duress Fraud Incontestable Wills and Malpractice Avoidance 147 D. Will Formalities The Formalities Considered 149 a. Writing Requirement 149 b. Signature Requirement 150 c. Attestation Requirement The Functions Performed by the Formalities Policing of Compliance with the Formalities 159 In re Estate of Kuralt (Kuralt I) 981 P.2d 771 (Mont. 1999) 4. Notarized Wills Conditional Wills Holographic Wills 169 Kimmel s Estate, 123 A. 405 (Pa. 1924) 169 Geoff Ellwand, An Analysis of Canada s Most Famous Holographic Will: How a Saskatchewan Farmer Scratched His Way into Legal History, 77 Sask. L. Rev. 1 (2014) Will Contracts 179 xiii

4 E. Changes Following Will Execution Lapse: Changes in Beneficiary Availability 180 a. Anti-Lapse Statutes 181 b. Class Gifts 183 State of Womack, 280 S.W.3d 317 (Tex. App. 2008) 184 c. Class Gifts and Anti-Lapse Statutes Changes in the Testator s Estate 189 a. Ademption by Extinction 189 i. Identity Theory 190 ii. Intent Theory 191 iii. Effect of Ademption 192 b. Ademption by Satisfaction 192 c. Increase 193 d. Exoneration 194 e. Abatement 194 F. Interpreting a Will Incorporation 195 a. Integration 195 b. Republication by Codicil 196 c. Incorporation by Reference Acts of Independent Significance Revocation and Related Details 199 a. Dependent Relative Revocation 202 b. Revival Mistakes and Reformation 206 PART IV The Law of Trusts 211 A. Creating a Valid Trust A Settlor 213 Van Duyne v. Van Duyne, 14 N.J.Eq. 397 (N.J. Ch. 1862) 214 Cahill v. Monahan, 155 A.2d 282 (N.J. Supp. Ct. App. Div. 1959) Settlor Capacity A Res or Corpus 224 Speelman v. Pascal, 178 N.E.2d 723 (N.Y. 1961) 225 Trustee(s) 228 Beneficiaries 230 xiv

5 B. Common Types of Trusts and Their Implications Revocable Trusts Irrevocable Trusts Charitable Trusts 235 a. Enforcement of Trustee Duties 236 b. The Cy Pres Doctrine Constructive/Resulting 238 C. Powers and Duties of Trustees Powers Duties 239 Kolodney v. Kolodney, 503 A.2d 625 (Conn. App. Ct. 1986) 240 In re Guardianship of Eisenberg, 719 P.2d 187 (Wash. Ct. App. 1986) 243 In re Will of Gleeson, 124 N.E.2d 624 (Ill. App. Ct. 1955) 250 a. Duty of Loyalty 256 i. No Self-Dealing 258 No further inquiry rule 258 The trustee fee exception 259 ii. No Conflict of Interest and the Baked in the Cake Exception 260 iii. Loyalty to All Masters 262 b. Duty of Prudence 271 i. Prudent Investment 271 ii. Prudent Distribution to Beneficiaries 281 c. Hybrid Ancillary Duties 282 i. Duty to Earmark Trust Property 282 ii. Duty Not to Comingle 283 iii. Duty to Inform Beneficiaries Resulting Liability for Breach 284 a. Technical, Unintentional and Disinterested Breach 285 b. Gross, Willful or Interested Breaches 286 D. Modification and Termination of Trusts 291 In re Carnoil, 861 N.Y.S.2d 587 (N.Y. Sur. Ct. 2008) 293 Grassian v. Grassian, 835 N.E.2d 607 (Mass. 2005) 296 E. Creditors Creditors of Settlor 298 a. Revocable Trusts and Provisions 298 b. Irrevocable Trusts and Provisions 299 xv

6 2. Creditors of Beneficiaries (Protective Trusts and the Hamilton/ Spendthrift Shuffle) The Self-Settled Asset Protection Trust 302 Waldron v. Huber (In re Huber), 493 B.R. 798 (Bankr. W.D. Wash. 2013) 303 Table of Cases 315 Table of Statutes and Restatements 317 Index 321 xvi