Will Substitutes * Four main will substitutes constitute the non-probate system.

. (1) life insurance (2) pension accounts Pure will substitutes. (3) joint accounts (4) revocable trusts o Trust o Trustee manages property in fiduciary capacity for beneficiaries. o Trustee holds legal title o Beneficiaries hold equitable title. Trustee cannot be sole trustee and sole beneficiary. Settlor/Grantor/Trustor: person who creates a trust. Testamentary trust: always irrevocable Inter-vivos trust: always revocable. Imperfect = join tenancies. 3 differences between Will substitites and wills (1) most will substitetes- but not all- are asset specific. (2) property that passes through a will subsitite avoids probabte. A financial intermediary takes place of court in effecting transfer. (3) the formal requriements of the wills act attestation and so forth- do not govern will substitutes and are not complied with. FARKAS v. WILLIAMS Facts: farkas died intestate. descendants were his heirs-at-law, nephew and niece. Williams was an employee of Farkas at vet. o Farkas purchased stock investors mutual inc and executed a written application instruction investors mutual to issue the stock in his name as trustee for Williams. At same time Farkas executed a separate declaration of trust which were identical except as to dates. All were executed for the benefit of Williams. ISSUE: (I) whether the trusts created a valid inter-vivos trust effective to give Williams, the purported beneficiary, title to the stock in question after the death of the settlor-trustee Farkas. (1) Whether upon execution of the so-called trust instruments defendant Williams acquired an interest in the subject matter of the trusts, the stock of the defendant Investors Mutual Inc. * If no interest passed to Williams before death the intended trust are therefore testamentary and invalid for failure to comply with will statutes. * here there is evidence showing an intention to presently part with some of the incidents of ownership of the stock. * the disposition is not testamentary and the intended trust is valid, even though the interest of the beneficiary is contingent upon the existence of a certain state of facts at the time of the grantors death. (2) whether Farkas, as grantor, retained such control over the subject matter of the trusts as to render said trust instruments attempted testamentary dispositions. * Each Trust retained the following powers to Farkas. 1) the right to receive during his lifetime all cash dividends

2) the right at any time to change the beneficiary or revoke the trust. 3) upon sale or redemption of any portion of the trust property, the right to retain the proceeds therefrom for his own use. * Retention by grantor the power to revoke, even when coupled with the reservation of a life interest in the trust property, does not render the trust inoperative for want of execution as a will * Farkas as trustee retained powers to dispose etc. BUT if had without having revoked the trust given the stock away without receiving any consideration for it, WILLIAMS would have a valid claim against Farkas estate for damages.8 Takeaway o RULE: even though grantor (1) retains power to revoke trust (2) appoints himself as trustee, - If beneficiary obtains ANY interest in trust BEFORE grantor dies, a valid inter-vivos trust may have been formed. 603 [Uniform Trust Code] Grantors powers; Powers of Withdrawl (a) While a trust is revocable [and grantor has capacity to revoke the trust], rights of the beneficiaries are subject to the control of and the duties of the trustee are owed exclusively to, the grantor. (b) during the period the power mayu be exercised, the holder of a power of withdrawal has the rights of a grantor of a revocable trust under this section to the extent of the property subject to the power.

UPC6-101 non probate transfers on death.

A provision for a nonprobate transfer on death in an insurance policy, contract of employment, bond, mortgage, promissory note, certificated or uncertificated security, account agreement, custodial agreement, deposit agreement, compensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, marital property agreement, or other written instrument of a similar nature is nontestamentary. This subsection includes a written provision that: (1) money or other benefits due to, controlled by, or owned by a decedent before death must be paid after the decedent's death to a person whom the decedent designates either in the instrument or in a separate writing, including a will, executed either before or at the same time as the instrument, or later; (2) money due or to become due under the instrument ceases to be payable in the event of death of the promisee or the promisor before payment or demand; or (3) any property controlled by or owned by the decedent before death which is the subject of the instrument passes to a person the decedent designates either in the instrument or in a separate writing, including a will, executed either before or at the same time as the instrument, or later.

LINTHICUM v. RUDI sup ct Nevada 2006 ISSUE: Whether revocable trust beneficiearies have the right to challenge amendments to the trust, when made by the grantor during the grantors lifetime. HOLD: Because a beneficiaruys interest in a revocable trust is contigent, we hold that these beneficiaries lack standing to challenge the grantors amendments. > Bro/sis must follow procedurs created by Nevadas legislature when it modified guardianship statutes.

FACTS: appelants are brother and sister in law & beneficiaries. & successor trustees at death or incapacity of Cobb. 2002 Cobb executied will and revocable trust. o Becomes irrevocable at death Cobb = Trustee o Reserved power to amend/revoke without having to notify beneficiaries. 2004 new will and amendment to trust executed o Amendment replaced bro/sis as successor trustees with . o ALSO named as sole beneficiary. petitioned for co-guardianship of Cobbs estate because obb was possibly delusional and paranoid. Court granted finding Cobbs actions had resulted in self-neglect and potential self-harm. Bro/sis objected. & filed complaint alleging the amendment was product of of the incapacity and/or undue influence. Requested constructive trust. filed motion to dismiss on gorunds that Bro/sis lacked standing. ANALYSIS: Nevadas revocable statute allows an interested person to petition the court for proceedings concerning the internal affairs of a nontestamentary trust and to obtain any appropriate relief provided with respect to the trust. HERE: was a revocable inter vivos trust and thus Cobb could recke during her lifetime and bro/sis interest has not vested and are NOT interested parties within the meaning of the statute.

ESTATE OF ATKINSON payable on death contracts and other nonprobate transfers FACTS decedent while living made deposits in the Willard United Bank and took three certificats. 1) January 25, 1957: $5,500 P.O.D. Patricia Burgeous. 2) October 1, 1957: $2,000 POD Maxine Burdette 3) Febuary 3, 1959: $1,000 POD Patricia Burgeous o January 30, 1957 Will executed including the two people above providing specifically that his widow Emma Atkinson should not share in his estate. At death Emma took her spousal forced share of the estate EMMA argues that the certificates which were not taken into account when calculating her share are required to be taken into her statutory 20%. ISSUE: whether adding the words payable on death to a certificate of deposit creates an invalid testamentary disposition contrary to the statute of wills. statute: Except oral wills, every alst will and testament shall be in writing, but may be handwritten or typed. Such will shall be signed, etc etc be attested by two or more who saw.. HOLD: the registration of the three certificates of deposit in this case are an ineffectual attempt at a testamentary disposiont of the deposits involved. ANALYSIS: court finds that there was NO present interest created by grantor for Pat/Max.

Estate of HILLOWITZ

FACTS: husband Abraham was partner in an investment club, and at death, pursuant to a provision of this clubs membership paid his widow $2,800 = husbands interest in club. Executors of husbands estate contend the above provision was an invalid attempt at testamentary disposition and thus the $$ should pass under will as an asset of his estate (i.e. residuary) RULES: these partnership contracts are third-party beneficiary contracts, performable on death thus need not conform to statute of wills. (ex) Contract to make a will, intervivos trust in which grantor retains life estate. Insurance policy.

transfer on death deed for real property a transfer on death deed (TOD), also known as a beneficiary deed, allows the owner of real property to execute a deed that names the beneficiary who wil succeed to ownership at the owners death. This creates NO current interest in the benecifiary and is NOT a compelted gift for taxes.

p414 REVOCABLE TRUSTS Courts have applied subsidiary rules from the law wills (abatement/ademption) where there is not enough trust property to satisfy the provision calling for distribution at death or the property is not in the estate at death. In Estate and Trust of PILAFAS (ariz app 1992) FACTS: Pilafas executed a will and revocable trust. updated both twice. Pilafas was trustee, the trust included real property and interest in a note and deed of trust on a mobile home park and a promissory note payable to the trustee and secured by a deed of trust on real property that decedent had acquired. o At death the decedents son was unable to find trust and will documents. HOWEVER, will and trust last known to be in decedents possession thus DOES presumption of revocation apply to both? RULES: where a will is within the possession of the decendent last and evidence/extrinsic included tends to show the testator revoked the will via destroying it the common law principle is that the will has been revoked. Here: (1) will revoked. TRUST: these instruments cannot be taken from the beneficiaries ecept in accordance with a provision in the trust instrument, or by their own acts, or by court order. Here: trust provided that the grantor may at any time or times during grantors life by instrument in writing delivered to the trustee amend or revoke the agreement in whole/part. HOLD: the appelles presented no evidence showing that the decendent complied with the required method of revocation and thus the TRUST was NOT revoked.