Estates and Trusts

Shapira v. Union National Bank

Facts. P conditioned his son, Plaintiff, inheritance under his will upon Plaintiff being married to, or marrying within seven years of testator’s death, a Jewish girl with two Jewish parents. Plaintiff filed suit alleging that such a condition was unconstitutional based upon the premise that the right to marry is protected by the Fourteenth Amendment to the Constitution of the United States. Rule: Upholding and enforcing the provisions of the decedent’s will conditioning the bequests to his sons upon their marrying Jewish girls does not offend the Constitution of Ohio or the United States. The conditions contained in decedent’s will are reasonable restrictions. His unmistakable testamentary plan was for his possessions to be used to encourage the preservation of the Jewish faith. The condition did not pressure plaintiff into marriage by the reward of money because the seven year time limit is a reasonable grace period, which would give plaintiff ample time for reflection and fulfillment of the condition without constraint or oppression. (Must marry a Jewish girl to inherit) – If the condition were a blanket prohibition it would be void against public policy, but partial restraints are ok. HONOR T’S INTENTIONS

Janus v. Tarasewicz

Facts: decedents, unknowingly ingested cyanide-laced Tylenol capsules. Plaintiff, insured’s mother, appeals from a declaratory judgment wherein the trial court found there was sufficient evidence to conclude that the primary beneficiary under the insured’s life insurance policy, survived the insured, and therefore was entitled to the proceeds of the life insurance policy. Rule: The record clearly established that the treating physicians’ diagnoses of death with respect to decedents were made in accordance with the usual and customary standards of medical practice. It was not necessary to determine by how long Theresa survived Stanley. After viewing the record in its entirety, the trial court’s finding of sufficient evidence of Theresa’s survivorship was not against the manifest weight of the evidence.

Hall v. Vallandingham

Genetic F died, children’s stepfather formally adopted them. Genetic paternal uncle died w/o descendants, so children would be in his line for intestacy. • Issue: whether children can inherit from their genetic uncle when they’ve been subsequently adopted by stepfather • Ct follows state statute, which eliminates adopted children’s rts. to inherit through genetic relatives (state ø want windfall + double inheritance) • UPC would have allowed dual inheritance b/c of stepparent exception. 2-113 ø apply b/c ø step-uncle (we know of) so ø technically double inheritance.

Minary v. Citizens Fidelity Bank & Trust

Alfred’s mother left trust to H, sons, heirs. Trust term’d upon death of last surviving beneficiary so Alfred adopted his wife so she could be heir of trust • Even tho KY ø distinguish child/adult adoption, Ct. said wife ø inherit b/c Alfred was trying to subvert donor intent thru adoption. • Statute should have applied, but Ct preferred donor intent to statute • Ct. also mentioned that adoption rule was a/b intestacy + this was a will!

Woodward v. Commissioner of Social Security

H sick w/ cancer ∴ preserved sperm for W, who later used it and appl’d for benefits • In lmtd circumstances a child resulting from posthumous reprodxn may enjoy inheritance rts of issue under MA law: Survivor/rep. must est. both that decedent affirmatively consented to posthumous conception and to the support of any resulting child • Ct reaches conclusion by balancing (1) child’s best interests (2) State’s interest in orderly admin’n of estates, and (3) repro. rts. of genetic parent. In this case, the above were not clear so no benefits.

In re Estate of Mahoney

W convicted of manslaughter of H. H died intestate and the W claimed her intestate share. VT had no slayer statute yet the court said it would be inequitable to permit the W to profit from her own wrongdoing and adopted the constructive trust approach to the issue to ensure that the killer did not profit from her own wrongdoing. see Homicide

In re Groffman

Testator had will prepared by atty but decided to execute it on his own. Testator, wife and 2 other couples were socializing one evening when the testator gestured towards his coat and asked the two men to witness his will. Went into another room, took will out and signed it, but one one of the other men was present, the other was still in the other room (had leg ailment so he was slow to get to the other room). When witness #2 arrives, he signs it but witness #1 has since left, so the two witnesses were not in the same room at the same time when testator signed it. Court ruled that while the testator’s intent was clear, he failed to have his signature witnessed by the 2 witnesses AT THE SAME TIME. See Harmless Error Rule, Substantial Compliance – two rules brought about to combat this type of strict compliance [must be in writign, signed by T and attested by 2 witnesses SAME TIME] Traditional common law strict compliance

Stephens v. Casdorph

T disinherited nieces in his will, which left bulk of estate to his nephew (and named neph exec’r). Nephew took T to bank to execute will, where one employee saw him sign but the two sig’ng witnesses signed in sep rooms + out of T’s sight + ø acknowledge to ea other •Strict compliance > subst’l compliance → will invalid ∴ intestacy •Dissent: Everyone knew why he was at the bank; ø fail on technicality

In re Will of Ranney

1. Background: Witnesses signed the self-proving affidavit but did not sign the attestation, i.e., they signed swearing they’d witnessed the will, but didn’t actually witness it. 2. Holding: "When formal defects occur, proponents should prove by clear and convincing evidence that the will substantially complies with the statutory requirements." 3. Disposition: Witness’ signatures didn’t literally satisfy requirements, but law was substantially complied with; will probated.

In re Estate of Hall

H+W revoked their original will by tearing it up, replacing it with a joint will draft that they signed and had their attorney notarize to stand as their will until lawyer sent a final version. No witnesses. H died, W submitted joint will to probate. H’s daughter opposed the will b/c ø witnesses. • Ct used harmless error and upheld joint will for probate admission. • Defect in attestation, but several facts showed clear + convincing ev: o Joint will spec’ly revoked all prev. wills + codicils by either H/W o H directed W to destroy original will o W’s testimony

In re Probate of Will and Codicil of Macool

– Basically person tried to update their will, much of it pretty hard to understand, and then died later that day, without ever getting to finalize it. The question was whether or not the whole will should be probated or the part that was understandable or none of it. Ultimately, because there was never any final assent, it was not considered a valid will. – So is the question was if she meant the handwritten note to be her will or if it was just the plans? ○ It was just the plans – it was only the clear and convincing evidence of plans – Professor’s view You could have said that the old will stands and this new handwritten note was just a codicil (amendment), so as to add the nieces

In re Pavlinko Estate

strict compliance/will invalid when husband and wife had mirror image wills, except she left something to her brother, but accidentally signed the others will. a. Vigorous DISSENT: will clearly intent of testator, who spoke little English and trusted the atty. making the will. "where there’s a will, there’s a way", intent of the testator gathered from ALL 4 CORNERS

In re Snide

• Ct admitted will to probate; common scheme, mirror image H and W wills, unified plan, clearly a mistake. • Deemed satisfaction of formalities (like subst’l comp) (also could have reformed the will by changing "H" to "W" etc.)

In re Kimmel’s Estate

Father wrote letter to two of his children in poor handwriting + poor grammar, signed the letter as "Father." Died the same day. • Ct held letter a valid holo will b/c discussed affairs of K’s life + disposed of prop’ty in case of his death. • Ct really just looked for strong support of test’ry intent • Tension: K was sick + writing in extremist character → intent serious? Signature technically ø meet req’ts. Letter is long with a very short provision about leaving land, etc. to his children

In re Estate of Kuralt

In 1994, K wrote holo will leaving prop’ty to mistress, then revoked by inconsistency with formal will. 1997, K sent letter to his mistress expressing test’ry intent to xfer prop’ty to her—"I’ll have the lawyer visit to be sure you inherit" and then died two weeks later w/o formally xferring land to her. Signature was "Love C" • Ct held to be a holographic codicil honoring the intent of T’r + adm’d to probate • Tension: Could have just been a plan to make a formal will, since he obviously knew how to make holo wills. K likely did not want letter to be a holo will but to express intent c. Intention for holographic will? i. Timing; knew he was sick and dying so written in contemplation of death ii. Underlined word "inherit" iii. Sham real estate transactions previously transferring property to Shannon but had provided $$ for transfer iv. Court specifically looked at intent of testator d. ON THE OTHER HAND i. Never had lawyer come by ii. Maybe intended to benefit mistress, but probably didn’t intend to be a will. Had written a holographic will before; testator knew this wasn’t one. iii. He probably wanted the transfer to happen, BUT did he mean this letter to be a will?

Thompson v. Royall

Facts: K signed a will typed on paper, signed on last pg plus 3 witnesses, gave executor will for safe keeping, executed codicil in same manner, then called everyone together and said she wanted them destroyed, on advice of attorney she just wrote on the back (didn’t destroy, deface, burn, etc. and "null and void" wasn’t written across the original writings) Not revoked by WRITING or ACT Holding: not revoked, to revoke need 1) doing a specified act, 2) intent to revoke 1. If testator would have written "null and void" and signed it, would have been a holographic revocation assuming that state recognized holographic wills 2. Good evidence testator wanted will revoked. UPC 2-507, would be different result. (says cancelling the will still effective whether or not touches any words on the will) • Revocation ineffective b/c ø physically mutilate/destroy instruments properly; needed to physically act on instrument. • Under UPC, different result b/c cancellation regardless if writing/axn touches words on will. • Under Harmless Error, there was clear + convincing evidence of intent to revoke → different result.

In re Estate of Stoker

2 wills: first with ex-girlfriend as executor and successor to trust, other where everything went to children Did the second will revoke the first? 1) Specific writing saying "revoke" 2) Disposed of all property 3) Power of attorney to children 4) Denies ex-girlfriend anything 5) Signed and dated (2 non-signing witnesses) 6) Peed/burned copy of old will HOWEVER, the will was not written by him (dyslexic). Also does not specifically state that it is a will ("to whom it may concern"). Court use of Harmless Error Rule: Allows extrinsic evidence from witnesses. *Does this really meet the Clear and Convincing Standard?* Though it failed as attested will because it was not witnessed and failed as a holographic will because it was not in the testator’s handwriting, the court applied CA’s harmless error doctrine and found that there was clear and convincing evidence that the decedent intended the document to be a valid will revoking his prior will and trust.

Harrison v. Bird

B executed wills naming H as benef but later told her lawyer she wanted them revoked, who then tore will into pieces ø in B’s presence + sent her the pieces and a letter confirming revocation. On death, nothing found. • Ct held will revoked • Presumption of revocation when will not found • Presumption rebuttable, but burden is on the proponent of the will

LaCroix v. Senecal

Will left 1/2 estate to nephew + 1/2 to friend in valid will. Updated sect’n to change name of nephew to make it clearer + republished rest of will, but update/republic’n witnessed by husb of friend making the will void w/ respect to friend even tho original prov’n to friend was valid • Ct upheld the will b/c of DRR

in re Estate of Alburn

O dies. Her sister, A, files alleging intestacy; her grandniece, V, petitions for probate of the "Milwaukee will;" and her sister-in-law, L petitions for probate of the "Kankakee will." Lwr court used DRR and found that O destroyed K will mistakenly believing it revived the M will and so admitted the K will to probate. Sister, A, appealed. • SC uses "[against] the great weight + clear preponderance of evidence" standard • Affirms that O would rather have K will than die intestate, evidenced by fact that 9/10 of her estate would to go next-of-kin not named in either will if estate probated intestate. Under majority/UPC approach, probably revived will #1.

In re Estate of Rigsby

Dispute: 2 pages, both handwritten, both initialed and dated at the top, but not fastened together and testator only signed the 1st page. Holding: ct. admitted pg. 1 to probate but not pg. 2 1. 2nd page no heading, not signed, and listed personal property followed by ppl’s names. 2. Pages not fastened together, did not reference each other, and were in conflict

Clark v. Greenhalge

Notebook listing distribution of property incorporated into will by reference when will referenced the document, the document was in existence at the time the will was created, and the document is sufficiently identifiable in the will. i. Listed in notebook that she wanted painting to go to ginny, but not in memo to executor. ii. But because the will said prop distributed either by memo or in accordance with HER KNOWN WISHES, the notebook was incorporated because it squared with helen’s intent to retaint he right to alter and amend tangible property in the will without having the formally amend the will. 1. Doesn’t matter doc wasn’t technically called "memorandum" even though that’s the document referenced in the will; notebook still a memo.

In re Wright’s Estate

Super quirky T (chased children away, gave friend a fish soaked in kerosene) devised real property (owned 3 parcels) to his friend, and his two daughters, and then gave everyone else $1. 3 witnesses, including notary + drawer of will, believe he was of unsound mind when executed will. • Testamentary capacity cannot be destroyed by showing isolated acts, foibles, idiosyncrasies, moral or mental irregularities or departures from the normal unless they directly bear upon and have influenced the testamentary act.

Wilson v. Lane

T was very odd (wouldn’t let people flush toilet, irrational fear of flooding in her home, trouble dressing herself). Devised 17 shares of her property, 16 to her family. Relatives challenged capacity. • Jury found incapacity, trial court judge granted SJ for executrix notwithstanding the verdict. SC affirms trial court. This court appl’d more scrutiny than abuse of discr’n • Dr expert testimony said T showed early signs of Alzheimers, but ct determ’d that such testimony ø show how T unable to form a rationale desire regarding disposition of her assets • T’s physician wrote a letter saying she suffered from senile dementia, but only did it to assist T in obtaining help w/ her telephone bill b/c she couldn’t see it. • "Law does not withhold from the aged, the feeble, the weak-minded, the capricious, the notionate, the right to make a will, provided such person has a decided and rational desire as to the disposition of his property." o You can be crazy and still make a will; just must be lucid when making will.

In re Strittmater’s Estate

a. Facts: no descendants but cousins, cuts them out leaving everything to National Women’s Party. Lifelong physician testified she had split personality disorder and paranoia–insane delusions about "the male" being evil why she left the women’s party $$ b. If decided today, would come out other way. Insane delusions no longer based on social norms. And capacity does not mean sanity; even though testator was probably nutty she wasn’t incapacitated. i. Doesn’t seem like unnatural disposition considering her other options

Breeden v. Stone

T killed person in a hit and run then committed suicide. Did a lot of drugs. Left a holographic will cutting out his entire family and leaving estate to a friend who was like a surrogate mother. Previous will/holographic codicil also left out family members. T’s family contested will for lack of capacity. • Court found that T had testamentary capacity and did not suffer from insane delusions o Despite drug/alcohol abuse + trauma from accident, SC said he was of sound mind when writing the will b/c he identified the person in great detail, and listed all of his belongings. o Altho T suffered from delusions (police were out to get him), it did not affect/influence the will • Knew natural objects of his bounty, extent/nature of his prop’ty, his words seemingly expressed T’s desires • The police delusion actually may have been true

Estate of Lakatosh

Roger befriends Rose (70yr old) who lived alone and was having trouble remembering things. She quickly became dependent on him, and he took her on errands, etc. A few months after first meeting Roger, Rose gave him power of atty over her affairs to "protect her" and executed a will giving all but $1k of her $268k estate to him. Roger was not present when the will was drafted or executed, but the atty was his cousin. Roger used the power of atty to use Rose’s $ for his own benefit and that of his friends, whom Rose didn’t know. Rose’s living standards deteriorated and shortly before her death she revoked the power of atty but not the will. The court found there was a confidential relationship b/w Roger and Rose and that Rose was of weakened intellect, and that Roger was to receive the bulk of her estate. Roger was UNABLE to overcome the presumption of undue influence.

In re Estate of Reid

Fact:24yr-old C shows up at 78-yr old widow and an intimate relationship develops (unclear if sexual). T adopts C and makes inter vivos gift (deed in life estate) then leaves much of estate to him in will. Opponents challenge the will, the adoption, and the deed. Held: MS law claims that a confidential relationship rises to presumption of UI concerning an inter vivos gift (don’t need suspicious circs) ∴ burden shifts to benef to rebut by C+C evidence • SOL for life estate deed xfer really matters!! Only T could challenge during her life o With fraud, SOL starts when fraud could have been discovered w/ reasonable diligence • Court found UI, but may have gotten it wrong when compare facts to suspicious circumstances factors for will.

Lipper v. Weslow

Facts: T’s will left e/t to two children and excluded grandchildren from a predeceased son. One of T’s children prepared will (T stated she "didn’t see any point in paying for a lawyer when her son could do it for free") + received substantial devise. Trial jury found UI. App jg set aside jury verdict + made jgmt NOV. Held: Showing that a confidential relationship existed between the testator and a beneficiary of the will where the beneficiary had the motive and opportunity to unduly influence the testator’s testamentary plan is just a preliminary showing. To prove undue influence and set aside the will, the contestants must further prove that undue influence occurred by showing that the beneficiary substituted his wishes for the testator’s intended testamentary plan. Here the evidence shows that the will’s drafter, Frank, is an attorney and a beneficiary whose inheritance is increased by the Weslows’ disinheritance and who had access to his mother’s home and there was animosity between him and the Weslows’ father. Accordingly, the Weslows have established a confidential relationship and shown Frank’s possible motive and opportunity to influence Block’s disposition of her estate. However, the evidence also includes testimony that Block had intended to disinherit the Weslows for reasons consistent with the recitations in her will. Since the evidence is insufficient to show that the will as written substitutes Frank wishes for Block’s wishes, the jury verdict is reversed and judgment is to be entered in favor of the Frank Lipper and Irene Dover.

Schilling v. Herrera

Facts:The brother, the decedent’s only heir-at-law, alleged that the decedent named him in her will as her personal representative and sole beneficiary. She was later hospitalized and, after her release, moved in with the caretaker. The complaint alleged the caretaker used undue influence to convince the decedent to prepare and execute a new will naming the caretaker as personal representative and sole beneficiary. The trial court held the complaint failed to state a cause of action and that the brother was barred from filing the action because he failed to exhaust his probate remedies. Held: • The appellate court disagreed with both findings. • That the complaint failed to allege that the caretaker breached a legal duty owed to the brother was immaterial, as the tortious conduct required for the interference tort was directed at the testator, not the beneficiary. • By alleging that the caretaker did not advise the brother of the decedent’s death until after she had petitioned the probate court for discharge of probate, the brother sufficiently alleged that he was prevented from contesting the will in the probate court due to the caretaker’s fraudulent conduct. The appellate court reversed the order dismissing the complaint and remanded for further proceedings.

Mahoney v. Grainger

Facts: H drafted will to leave residuary to "heirs at law." H had one heir at law at death, but evidence showed that when drafting will she intended her 25 first cousins to take equally; lawyer who used the wrong words. Held: "Heirs at law" is not ambiguous, and just b/c will is not in conformity with H’s intent or instructions to lawyer does not authorize ct to reform or alter Only where language is not clear can extrinsic evidence be considered.

In re Estate of Anton

Facts: i. Facts: Hester marries Herbert . During marriage Herbert’s daughter G deeds property to them. Herbert builds duplex on property. Herbert dies and Hester becomes sole owner. H has a will leaving ½ duplex interest to G and ½ to Robert= SPECIFIC DEVISE. Remainder of her estate to Robert and Nancy. Holding: Ademption does not occur when specifically devised property is sold as a result of acts that are involuntary to the testator. Rationale: no opp to revise the will, so no ademption. •No ademption because sale was result of act involuntary to T, but the devisee is entitled to her share of what is left over of the proceeds. •Under identity theory, stepdaughter should not have received "reimbursement" payment of half value of prop’ty

Jimenez v. Lee

π sues her father, claiming that a trust arose (deed of trust) in her favor when two separate gifts were made for her benefit, which he misused. One was from her grandmother ($1000 savings bond, registered in names of ∆ "and/or" π "and/or" π’s mom). The other was from ∆’s client ($1500 deposited into a savings acct in names of ∆ and his 3 children–$500/each kid). Both gifts were made "for the educational needs" of the children. ∆ moved the funds around and used them for himself. Claiming he was "custodian," he broadened the powers over the trust. • SC believes the gifts were in trust, not gifts → ∆ breached his duty of loyalty as trustee. Rule: Transfer of property with the intent to vest the beneficial ownership of the property in a third person gives rise to a trust and imposes on the trustee duties to administer the trust solely for the benefit of the beneficiary and account for trust income and expenditures.

Unthank v. Rippstein

Facts: Craft wrote a letter to X about "rounding up" his financial affairs. In the letter, C says he will give X $200 on the first week of the month every year for 5 years, "provided I live that long." Then expressly strikes the "provided . . . " part. Held: The court determines that there is insufficient certainty in the language that C indeed was establishing a trust. Rather, C was expressing an intention to make monthly gifts—no more than a promise, which is not enforceable

Clark v. Campbell

Facts: One provision of T’s will directs his trustees to "make disposal by the way of a memento from myself . . . to such as my friends as . . . my trustees shall select." Held: A valid private trust will not arise unless the trust is made for the benefit of definite and ascertainable beneficiaries and is to be distributed in specific proportions.

In re Searight’s Estate

Facts: S dies testate, and one provision of his will gifted his dog $1000 (in a bank), to be used to pay S’ friend for keep and care for the dog for its life. The remainder plus interest of the $1000 leftin the account after dog’s death gifted to people. Held: Court upholds the gift as honorary trust or a gift, but does not worry about the terminology just holds the bequest as being valid.

Moon v. Lesikar

Facts: Father sets up a family trust, and appoints himself and his son as co-trustees and gives himself life income, with the right to revoke or amend the trust by written notice to trustee. Upon his death, the trust becomes irrevocable and sets up separate trusts for his two children, wife, and grandkids. Carolyn claims her father breached duties when he took stock out of the family trust and sold it to his son for the benefit of the grandchildren’s trust. Held:A contingent beneficiary whose interest has not yet vested does not have standing to challenge a transaction by the settlor of a revocable trust. Carolyn lacks standing.

State Street Bank and Trust Co. v. Resider

Facts: Decedent created inter vivos trust with pwr to amend or revoke it and the right during his lifetime to direct the disposition of principal and income. Conveyed to trust corporate capital stock + executed a pour over will. Then decedent appl’d to bank for loan, and was granted one unsecured. Then decedent died. Held: Where a person places property in trust and reserves the right to amend and revoke, or to direct disposition of principal and income, the settlor’s creditors may, following settlor’s death, reach those assets owned by the trust over which the settlor had such control at the time of his death as would have enabled the settlor to use the trust assets for his own benefit.

Clymer v. Mayo

Facts: M executed a will naming her husband as primary benef. Then she named him the benef of her life insurance and retirement plans. Decade later M executed new will and revocable trust. New will = pour over. Husband was trust benef. Then unified all of her POD/retirement to make trust the benef. M + H divorced. M changed benef designation of life insurance, but left trustees as beneficiary of pension + ex-H as life benef of trust. Issue: Should ex-H ints in trust be revoked as a result of the divorce? Held: Looks to substance rather than form + deems the trust coordination w/ will was to fashion a unified estate plan Court holds that divorced spouse ø take under revocable trust unless expressly stated otherwise (this is how Court reads Mass Statute applying)

Cook v. Equitable Life Assurance Society

Facts: T purchased whole life insurance policy naming W at the time as beneficiary. Then divorced. Holographic will gave everything to new wife + son 11 years later. Divorce ø revoke life insurance policy. Issue: Whether policy-holder can change beneficiary of LI in will without changing it w company Held: Under Indiana law, an insured party may only change the beneficiary of a life insurance policy in the manner set out in the policy, and a designation of an alternate beneficiary by will is ineffective.

Egelhoff v. Egelhoff

Facts: WA statute provides that designation of spouse as beneficiary of nonprobate asset is revoked automatically upon divorce. E had employer life insurance policy + pension plan, of which he designated his ex-wife as the beneficiary. E died intestate w/o changing beneficiary, and under ERISA, the money went to his ex-wife. E’s children sue, arguing the $$ should have passed thru intestacy. Held: Yes. If a state statute affects the administration of an ERISA-governed plan in a way that interferes with the objectives of the ERISA statute, ERISA will preempt the state statute. ERISA provides that it "shall supersede any and all State laws" that "relate to any employee benefit plan" that is also governed by ERISA. The phrase "relate to" is construed broadly but to avoid over-broad application of the preemption clause the court must consider the scope of the state statute and its effect on the objectives of the ERISA statute. Here, Washington’s state statute invalidates, as a non-probate asset, a beneficiary designation made in an employee benefit plan where the beneficiary is a former spouse. However, ERISA requires an administrator’s compliance with an employer’s benefit plan rules, including the requirement to pay beneficiaries who have been "designated by a participant or the terms of the plan." Consequently, the Washington statute conflicts with one of the key objectives of the ERISA statute, which is to have uniformity and standard procedures for administering ERISA plans. Tension: Doesn’t commend on slayer rules, though, which is silly b/c slayer rules are much more complicated + would hurt ERISA more!

In re Estate of Kurrelmeyer

Facts: K appt’d W and daughter as attorneys in fact. W established trust w/ herself _ daughter as cotrustees + xferred real estate of K into trust when H no longer competent. K’s will contained specific provision for the property—W to have prop’ty for life then pass to children at death. Trust provided W could have pwr to sell the home. Son challenged on three grounds: (1) Did durable pwr of attny create in W pwr to xfer assets to trust? (2) Is such pwr even delegable to agent under durable pwr of attny? (3) Did W breach fiduciary duties? Held: To determine whether an attorney-in-fact has the authority to create a trust, the court must consider the language of the power of attorney to determine whether the principal intended to authorize the attorney-in-fact to do so. Here, the express language of the power of attorney, which includes authorization to execute trust instruments and execute deeds to transfer real estate, clearly shows that Louis, Sr. intended to give Martina authority to create the trust and add his assets to the trust. The fact that Martina is an agent also does not prevent her from creating the trust because a principal may authorize an agent to create or modify a revocable intervivos trust.

Hartman v. Hartle

Facts: T named two sons-in-law as executors of her estate and directed them to sell her real estate and to divide proceeds equally among her children. They sold farm to one son at "public auction" on behalf of the executor’s spouse, J (daughter). Then J sold the farm for $5500 (nearly $2k profit). Π, another sibling, sues executors seeking 1/5 of profit realized in the sale of the farm by J. Held: A trustee cannot purchase land from himself at his own sale—breach of loyalty by being on both sidesof the transaxn. Damages: Bc bona fide purchaser, can’t void the transaction, so executor has to disgorge the money ($1600), giving π 20%.

In re Gleeson’s Will

In March, X leases 160 acres of farmland to Y for one year. 11 months later, X dies, devising the farmland to Y in trust for the benefit of her children. With expiration of lease imminent (ø find renter so late in year) Y renews lease to himself for another year with an increase in rent, plus a share of the crops. • Even though no injury, and possibly even benefit to trust, breach of loyalty b/c leasing property from trust as trustee. • Example of no further inquiry rule—no defense of good faith or best interests of beneficiary o Defenses: Settlor authorized particular self-dealing, beneficiary consented after full disclosure, or trustee got judicial approval

In re Rothko

X dies, leaving 798 paintings of tremendous value, to be sold at trustee discretion with profits setting up trust for his daughter’s benefit. Appointed three trustees: R, S, L. Executors dispose of paintings w/i three weeks thru contracts with MAG and MNY. • Court finds breach of loyalty for R, S + breach of prudence for L, given his knowledge of R+S’ conflicts of interest • Damages: o Undo transaxn to the extent possible • Some paintings sold, so ø reverse sale • Looks at appreciation damages • What the paintings would be worth NOW (trial), not when breach happened • Part of the damages was that the paintings sold too quickly → had the executors held on to them, would have struck better K → overhasty sale appreciation damages better approximate monetary value!

Marsman v. Nasca

T gives husband, Cappy, 1/3 of residue in trust, with quarterly income and the right to invade principal "if necessary or desirable." Remainder at his death to daughter. C asks attorney for funds b/c income was insufficient, attorney made him explain why it was needed + discouraged him from asking again. C only receives $300. When still insufficient, C xfers house to stepdaughter and takes life estate in it for consideration. The attorney claimed he accounted regularly. Issue: Whether trustee holding discretionary pwr to pay principal for comfortable support and maintenance has a duty to inuire into the financial resources of that benef • Duty of inquiry is owed, and here was breached. • Also, here, duty of distribution breached. o Attny had actual notice of circs + ø invade principal. Arranged sale of house → knew of circs. • Remedy: constructive trust on trust corpus to go to C’s estate! o No personal liability for trustee b/c of aEXCULPATORY CLAUSE —his actions were not "willful neglect or default" o Two Theories of Damages: 1. Loss from sale of the house—had C owned the home, substract "what C received" from "what it would have been worth" = Damages a. B/c stepdaughter was bona fide purchaser, ø going to give house back to C 2. Payments that should have been distributed to C from the corpus → C’s estate a. Even though C assented to the accounting made by attny, judge can withdraw assent when "it is deemed improvident or not conducive to justice"

In Re Estate of Janes

X dies and puts $3.5mill in trust, $1.8mill of which is in Kodak stock. Price of Kodak fell significantly over 7 year period, but trustee didn’t divest/reinvest. • Court determines breach of prudence, uses capital lost + interest damages

Scheffel v. Krueger

P claimed person w/ trust sexually assaulted her minor child. Jgmt ordered recovery. Π wants to attach ∆’s ints in an irrevocable trust with spendthrift provision. • Based on plain language of statute in place, spendthrift clauses are enforceable unless the benef is the settlor (and not a special needs trust) or unless there have been fraudulent xfers. Π’s claim fails.

Federal Trade Commission v. Affordable Media LLC

H+W ringleaders in ponzi scheme, of which they put their own profits in an offshore APT + claimed they were unable to reach assets b/c they had willingly relinquished all control of the offshore irrevocable trust. But they were co-trustees so they had themselves removed as co-trustees b/c a provision said in an event of duress, they could be removed. Then they were held in contempt of court • Court holds that ∆s had control; didn’t buy the trust terms + trustee removal. o The entire point of offshore APT is to frustrate domestic court jdxn + evade Amer law o ∆s couldn’t show repatriation was impossible o Because ∆s were trust protectors, they had significant control o Shady trustee removal

In re Estate of Brown

Provision of trust said it was to be used for education and to continue for the care, maintenance and welfare to live in a manner which benefs accustomed for the remainder of their lives • Even tho all benefs agreed to terminate, ø b/c material purpose—life income—had not yet been accomplished.

In re Riddell

Appealing court’s denial of motion to modify trust + create special needs trust for bipolar daughter. If principal is distributed, she will lose Medicare benefits • Court remands to lwr court to see if equitable deviationwould permit change here. Trial court erred in considering loss to state. Trust probably can be modified to provide for continuation as special needs trust

Davis v. US Bank National Association

Settlor created a trust with a bank in MO as co-trustee. Beneficiary wants to remove Bank as trustee and replace US Trust as the new trustee b/c new bank will charge lower fees, the new bank’s investment advisor understands the beneficiary and his family’s unique needs, and the beneficiary lives closer to the new bank. • Court allows trustee removal and replacement under UTC §706(b)(4), even though there is no "cause" for removal.