UNIVERSITY OF MICHIGAN LAW

SCHOOL

Law 755 Winter 2022

Trusts and Estates I James R. Hines Jr.

Study Questions

Note: These study questions are intended as a study, education, and review aid only; they are not
designed to be reliable guides to the questions that are likely to appear on the Law 755 quiz.

In evaluating these questions, please apply the provisions of the Uniform Probate Code, the
Uniform Trust Code, and other applicable uniform statutes.

1. James’s will includes specific devises of $100,000 to each of his three children, Ronald,
Richard, and Roger, with the condition that the sons are eligible for the money only if they
marry women of the Congregational faith. The residual taker under the will is the University of
Michigan. James’s estate at his death is $2 million. Richard marries a woman of the Jewish
faith, whereas Ronald marries a woman of the Congregational faith, and Roger is unmarried.
How is the estate divided?

 Ronald takes $100k, the University of Michigan $1.9M, and Richard and Roger $0.
Shapira.

2. Matthew has a will containing a testamentary trust that instructs the trustee, his brother
Alex, to invest the trust property and distribute income for life to Erin, his surviving spouse, as
long as she remains unmarried, with the trust property to go to their children when she dies or
remarries (whichever comes first). A few years after Matthew dies, Erin, now a widow (age 78)
starts a long-term relationship with her boyfriend (age 80). They move in together, but do not
marry, explaining to everyone that they are avoiding marrying so that she can continue to
receive income from the trust.

(a) Can the trustee refuse to pay Erin income on the ground that she is
constructively married?

 No, trustee is not given adequate discretion.

(b) If not, then could the trustee adjust the trust investments so that they generate less
income for Erin, thereby saving resources in the trust for ultimate distribution to the children?

 No, not impartial, given the settlor’s desires. UTC 803.

(c) And if not either of these, is there anything else the trustee might be able to do to
carry out the settlor’s wishes?

 Perhaps unitrust? Come back to this one.

 3. Chris is a famous sculptor. Her will instructs the executor of her estate to transfer her
completed and semi-completed sculptures to the local art museum, except for her
masterpiece, which the will instructs the executor to have destroyed.

(a) You are the executor. Should you destroy the sculpture? If not, what else should you
do? If you appeal to a court for instructions, what will the judge order?

Yes, although the court may worry about destruction. See Eyerman, p. 15.
(b) Suppose that in addition, Chris’s will makes a specific devise of $100,000 worth of Ford
stock to the first of her two children to destroy a sculpture at least 4 feet tall that Chris had
given them during lifetime. Should the executor adhere to this instruction?

 Yes, must respect the testator’s intent. The kids have legal right to the sculpture. No rule
that wills cannot be capricious.

4. A deceased testator Barb is survived by two children and one parent. Barb’s properly
executed will gives everything to a friend, F. Who takes Barb’s property? An unrelated
individual, G, has a will that devises a farm to “Barb’s estate.” Who takes the farm?

 F takes Barb’s property under the Will, including G’s farm. See UPC 2-602 (posthumously
acquired property is included in the estate).

5. Your spouse dies, leaving you everything in a properly executed will.

(a) Are there circumstances in which it makes more sense just to skip probate? What are
they?

 No or few assets. See Small Estate Procedures.

 All assets are held in trust or joint tenancy.
 No children outside of the marriage or surviving parents. See p. 74.

(b) If your spouse had died without a will would you need to go through probate? Under
what circumstances would it clearly be necessary to go through probate?

 I might not need to go through probate if the spouse had previously conveyed all of their
assets via nonprobate transfers (e.g., living will, joint tenancy, POD contracts). However, if
either I or the spouse has children from outside this marriage or RE not held as joint tenants
then I must go through probate to resolve intestacy disputes or transfer RE.

6. A husband and wife want to draft reciprocal wills that leave income from property to
each other, with the remainder to go to their mutual children. What is the best way to set this up
so to avoid the possibility that spouses or children of subsequent marriages could take some of
this property? Suppose, for example, that one of the original spouses were to die, and the
widow(er) were to remarry – how can the arrangement prevent the new spouse from taking in
the event of a subsequent divorce or other event?

 If they want to draft reciprocal wills, only, then the best option is to draft “mutual wills,”
which leave income from property to each other, with the remainder to go to their children.
Mutual wills must expressly provide that they are intended to be binding. See Keith v.
Lulofs; UPC 2-514.
 Another solution is for each Will to create an irrevocable testamentary trust.
 The best solution may be to convey the property to an inter vivos trust today.

7. A lawyer drafts a will based on notes from a client meeting, the will is properly executed,
and three years later the lawyer, in looking through some files, discovers that the will mistakenly
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omits a daughter as one of the beneficiaries. Is the lawyer obliged to call this to the client’s
attention? What if the client is now alive but mentally incompetent – what should the lawyer do?
Can the lawyer be sued, and if so, can the daughter do so? Can anyone else sue the lawyer?

 Yes, an omitted daughter can sue. Simpson v. Calivas.

8. I die without a will (I was busy writing study questions during my lifetime). How is my
property divided among heirs in the following situations?

(a) My wife and our two kids survive me. Would it matter if the two kids were born before
we were married, and my wife and I had been married just four months?

 To the wife. No difference in either situation.

(b) My wife and our two kids survive me, plus I have one surviving child from a
previous marriage.

 Wife gets $150k + ½ of remainder, and surviving child gets the other ½.

(c) My father and my two sisters survive me.

 Father takes all. UPC 2-103 (CHECK what to do about bracketed rules  Hines seems to
suggest they should be excluded as not officially adopted by the UPC/UTC).

(d) My two sisters survive me; my daughter does not, but her son does. What if instead of
having a son, my daughter had married a man who had a child from a previous marriage, and
this child survives me?

 Daughter’s son would take. UPC 2-103(c). Daughter’s step-child would have no claim, so
all is split by the sisters.

(e) My mother and my two grandchildren survive me.

 Grandchildren take. UPC 2-103(c).

(f) I am survived by my two brothers and my live-in girlfriend of 10 years.

 Brothers take everything. UPC 2-103.

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(g) I had a spouse and three children, all now deceased. One of my children died childless,
one had one child, and one had three children. My four grandchildren are alive, as is my
mother.

 Grandchildren will take. UPC 2-103(c). The grandchildren each take ¼. UPC 2-106(b).

(h) My spouse and two of my children are deceased. One of the deceased children has a
living child (my grandchild), and one has three children. My third child, who is alive, has two
living children.

 Child and grandchildren will take. UPC 2-103(c). Living child takes ⅓. UPC 2-106(b).
Each grandchild takes ⅙. Id.

(i) I am survived by two sons of my father’s brother, and three daughters of my mother’s
sister (five cousins total); the fourth daughter of my mother’s sister is deceased, but her two
sons (who are my first cousins once removed) are alive.

 Five cousins will take 1/6. UPC 2-103(i). The two first cousins once removed each take
1/12. Id.

(j) I am survived by a brother; the son of a deceased brother; the daughter of a deceased
sister; two children of the son of the same deceased sister; and the grandson of another
deceased brother.

 Brother takes ¼. Nephew and niece each take 3/16. Remaining generation each take 5/24.

(k) I am survived by two biological children and one stepchild (who I did not formally
adopt). What if I were survived by a spouse and one stepchild? What if I were survived by two
sisters and two stepchildren? What if I were survived by one stepchild and two grandchildren of
my grandfather’s brother?

 1. Two children split. 2. Spouse takes everything. 3. Two take everything. 4. Stepchild!

(l) I am survived by two children; my third child is deceased, but she has one living
child and two living adopted children.

 Children take ⅓ each, while the grandchildren each take 1/9. UPC 2-118 (adopted children
are children).

(m) My wife is deceased, but our two children survive me; I also have another living child
from a previous non-marital relationship. Would it matter if the third child had been legally
adopted by someone else? What if my non-marital child who had been adopted by someone else
was deceased, but had two living children?

 1. ⅓ each. 2. ½ each to two remaining kids. 3. ½ each again.

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(n) My two biological children are deceased, but they each have three living children. In
addition, a year prior to my death I adopted a previously unrelated 60 year old woman as my
daughter, and she survives me.

 Grandchildren take ⅙ each. UPC 2-705(d) (60 yr old woman probably not a “child”).

(o) I am survived by two biological children, one of whom has the right to control what
happens to my deceased wife’s and my genetic material. Two years after I die a new child is
born. How is the estate allocated? Would it matter if the new child were born 10 years after I
died?

 First new child may take, depending on the process, but the second never takes. See UPC 2-
104.

9. Your properly executed will devises $1 million each to your four children, with the
remainder to go to the University of Michigan. You subsequently write on a piece of paper “I
revoke my previous will in its entirety. I do not want my no-good son Bill to get anything,” and
you sign and date the paper. A month later you die (this is what happens to mean people). How
is your property allocated?

 Valid holographic will, so the prior will is revoked in entirety. UPC 2-507. Presumably all
four children take ¼.

10. I die with an estate of $3 million but without a will, and am survived by three children.
During lifetime I gave $300,000 to one of the children, explaining in a signed (but not
witnessed)

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contemporaneous document that I was doing so as an advance against his inheritance. How
much does that child take when I die? What if I had not produced such a document during my
lifetime, but had instead told the child, in the presence of others, that I would give him $300,000
as part of his inheritance? What if I had neither produced the document nor told him that the
$300,000 was part of his inheritance?

 Advancements are only for intestacy. UPC 2-109.

 1. Child 1 takes $800k. UPC § 2-109. 2. No advancement. 3. No advancement.
 Calculation: (Total Estate + Advancement) / Number of Children → Subtract the
advancement from the advancement child’s share.

11. A wife murders her husband, who dies without a will and with an estate of $2 million.
He is survived by the wife, their two children, and one of his parents. Who takes the property if
she is convicted of manslaughter? What happens if she is acquitted of the manslaughter charge?
What if she were convicted but instead of dying intestate he had a will that left half the property
to the wife and half to his parents? What if he had the same will but she was acquitted?

 Only a “felonius and intentional” killing causes forfeiture. Absent a criminal conviction,
courts will determine whether the criminal would have been criminally accountable under a
preponderance of the evidence standard. UPC 2-803 (slayer rule).
 Convicted: children take $1M each “by representation,” so long as not accidental
manslaughter. If accidental manslaughter, wife would take all $2M.
 Acquitted: if criminal acquittal, civil trial with preponderance standard.
 Will: her half would go to her children by representation. 2-803(c).

12. What would happen if the husband had two children from a previous marriage, the
wife had one child from a previous marriage, his will leaves half to the wife and half to his
two children, she murders him, and she is convicted of murder?

 Two previous marriage children share half. Unless state law prohibits a slayer’s child from
taking, the wife’s child from a previous marriage will take half.

13. Father dies without a will. His spouse is deceased, as is his son; but the son’s son is
alive, and his daughter and her two daughters are also alive. The living daughter renounces
(disclaims) her inheritance. What is the resulting allocation of property?

 Disclaimer treated as if the disclaimer predeceased the testator. UPC 2-1105, -1106.
 Son takes 50%, granddaughters each take 25%.

14. Your grandfather dies without a will, and you are the sole heir of his $500,000
estate. Only trouble is, bad business ventures have left you $800,000 in debt to the bank.
Can you renounce the inheritance so the money goes to your solvent children instead?

 Yes, takers may disclaim any interest in property. UPC 2-1105.

15. Which of the following (typewritten and signed by the testator unless
indicated otherwise) wills are valid?
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  Ordinary will execution requires it be in writing, signed, and attested. UPC 2-502(a).
Holographic wills are valid if the signature and material portions are in the testator’s
handwriting. UPC 2-502(b).

(a) A will signed by two witnesses, neither of whom actually saw the testator sign the will,
but both of whom saw and heard the testator say that he had signed it. If this is valid, would the
two witnesses be required to be present at the same time, or could the testator get one to
witness the attestation one day, and the other witness the following day?

 Valid acknowledgment. No requirement that the witnesses be present at the same time, but
they must each sign within a “reasonable time” after hearing the testator’s
acknowledgment.

(b) A will with just one signature, that of a notary public. What if the notary simply signed
the will, and failed to affix her official stamp and seal?

 Testator still needs to sign, otherwise this would be ok.

(c) A will with one witness signature prior to the testator’s death, and a second witness
who signs the will after the testator’s death.

 Ok, so long as within a reasonable time.

(d) A will with two witness signatures at the top of the first page.

 Ok! But not recommended.

(e) A will with signatures of two witnesses who saw the testator sign the will over
skype, then two days later signed as witnesses.

 Ok! But not recommended.

(f) A will that an infirmed testator did not sign, but that was signed in his stead (and in
his name) by a good friend who was standing next to the testator’s hospital bed.

 Possibly ok, but only if the testator was “conscious” and it was by his direction.

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(g) A handwritten will with no date and no witnesses.

 Totally fine. Need only signature and handwritten material portions by the testator. Form
wills are ok.

16. What four functions do will formalities serve?

 Evidentiary, channeling, cautionary, and protective. P. 146.

17. A testator’s will devises all his property to two cousins, both of whom are the two
witnesses to the will. The testator is survived by two children, a parent, and the two cousins.
Who takes?

 Interested witnesses will not invalidate a will. The two cousins take. UPC 2-505(b)
(“disinterested witnesses”).

18. A testator and her husband work with a lawyer to prepare their wills which have
slightly different terms: his will devises half his property to her, one quarter to their children,
and one quarter to his university (the University of Michigan); hers devises half to him, one
quarter to their children, and one quarter to her university (Ohio State). By accident he signs
the will prepared for her, and she signs the will prepared for him. Both signatures are
witnessed by two witnesses. She dies a year later; and only then is the mistake discovered.
Who gets her property?

 Cases have gone both ways, but the UPC adopted the Harmless Error rule. UPC 2-503.
Husband takes half, children take quarter, OSU takes quarter.

19. A client works with a lawyer for months on the draft of a will, and when the big day
arrives, she mistakenly signs not the will but a blank sheet of paper underneath the will.
Somehow there are witnesses who manage to sign the will. The client dies before the mistake is
discovered. Is the will effective, or does her property pass through intestacy?

 Under Harmless Error, I think this is ok. Id.

20. You are going on a trip to scale the peak of Mt. McKinley, and before leaving write
a signed note that reads, “Should I die on McKinley I want my house to go to Cousin
Louise.” You return safely from the trip, and a month later die from a heart attack trying to
climb the stairs to the 9th floor of Legal Research. You are survived by two brothers and
three cousins, including Louise. Who gets your property?

 Cousin Louise takes. This is sufficient to show testator intent. 2-502. Not a condition
precedent.

21. You download a fill-in-the-blank will from the internet, you fill in the blanks with names
of beneficiaries and property to be allocated to them, and you sign the form at the bottom. There
are no witnesses. Do you have a valid will?

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  Yes, material portions and my signature are in my handwriting. 2-502(b).

22. Suppose that you have a valid will but change your mind. If you tear the will in half,
have you revoked it? What if you tear the will at an angle, so that only a small part (say, 10
percent) of the will comes off? What if you use the lighted tip of a cigarette to burn a small hole
in the first page of the will? What if you wrote in the margin of the first page, “Canceled as of 9
February 2022”?

 All are valid revocations. UPC 2-507.

23. What if you have a valid will, but start talking to a lawyer about a new will. The lawyer
explains that you will need to revoke the old will, so you go home and put an X through every
page. You die before you return to the lawyer’s office to continue working on the new will.
Does your old will dispose of your estate, does the (unsigned) draft copy of the new will-in-
progress control, or are you intestate?

 Intestate. Dependent Relative Revocation does not apply to revive the old will because it is
unclear whether the testator meant to preserve any portions of the old will. DRR mistaken
belief is more about conditioning revocation on something else.

24. Your first will devises all of your property to your brother. You then execute a second
will that devises all of your property to your sister. Then you tear up the second will, and a
month later die, survived by your brother and sister. Who takes?

 Will 1 was wholly revoked, so intestacy unless circumstantial evidence shows the testator
meant to revive will 1. UPC 2-509(a).

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25. A testator executes a will with various dispositions, including that the daughter Julie
gets the house, and a year later executes a document that says “I amend the third paragraph of
the previous document to replace “Julie” with “my friend Dave.”

(a) A year later he tears up the second document. Does Dave still get the house, does Julie
get the house, or does the house pass through the residuary (or by intestacy)? What if the testator
instead had torn up the first document – who would get the house?

 Julie gets the house because will 1 was either revived (if the document was a valid
holographic codicil) or document 2 never amended will 1 (if it was not signed). UPC 2-
509(b). House goes to intestacy.

(b) Suppose that in the previous question the testator a year after executing the will had not
executed a second document, but instead lightly crossed out “Julie” and wrote in “Dave” –
who would get the house? What if the testator had simply crossed out “Julie” without writing
anything else?

 Crossing out is a valid revocation, but “Dave,” unless signed, is not a valid codicil. UPC 2-
507. Unless there is a residual clause, the house goes into intestacy.

26. Discovered among the effects of a decedent with no formal will is a signed handwritten
document that says (in its entirety), “The Acura to Frank, the Nissan to Susan.” Is that a valid
will? Would it be permissible to introduce evidence that the decedent had told his co-worker that
he had arranged for Frank to get his Acura and Susan to get his Nissan upon his death?

 Extrinsic evidence is admissible to prove latent ambiguities, but not patent ambiguities.
This is a valid holographic will, and extrinsic evidence would be admissible if this was
determined during probate to be a latent ambiguity.

27. A hospitalized testator has second thoughts about his will, and asks his son to find it in
the testator’s desk and destroy it. The son tears the will in half, and reports to the father that he
had gotten rid of it, to which the testator replies “Good,” and promptly dies. Is the will still
valid, or does the testator’s property pass through intestacy?

 Under 2-507(a)(2), revocations by other individuals are valid if in the testator’s conscious
presence and performed at the testator’s direction. It’s unclear here if the conscious
presence was met. (Conscious presence means hearing, not sight.) If not, the original will
remains valid.

28. A testator signs a will in her lawyer’s office, where it is properly witnessed, and
deposited in the office safe, a copy to be mailed later to the testator. The testator leaves the
lawyer’s office for the airport, there to fly to Switzerland, where upon seeing the local prices
she has a heart attack and dies. In the meantime the lawyer’s office has burned down, though
the lawyer survives. How will the testator’s property be distributed – based on the will, or based
on intestacy provisions? Just FYI, the lawyer insists that she can remember virtually all,
possibly entirely all, of the provisions of the will, though the witnesses have no idea what the
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will provided.

 The will remains valid and can be proved by the lawyer’s testimony.
 If a lost/mutilated will was last in the testator’s possession, then presume revocation.
 If in another person’s possession, then presume no revocation. Pp. 232–33.

29. A testator has a properly executed that gives the bank account to child 1, the house to
child 2, and everything else to child 3. A subsequently executed second will gives the house to
niece 1 and the boat to niece 2 (and has no other provisions). The testator later has second
thoughts and crosses out the section of will two that gives the house to niece 1. Then the testator
dies (of course). How is the property divided?

 Bank account to child 1. Niece 2 gets the boat. House to child 2. Residuary to child 3.
UPC 2-509(b).

30. In the previous question, suppose that instead of crossing out the section of the will
giving the house to niece 1, the testator executes a third will that revokes will 2 and gives
the bank account to nephew 1; then the testator dies. Who would take?

 Bank account to nephew 1. Rest goes to intestacy. UPC 2-509(c).

31. Suppose that will 2 had expressly revoked will 1, gave the house to niece 1 and the
boat to niece 2, and also had a residual clause giving everything else to nephew 2.
Experiencing

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regret, the testator subsequently tears will 2 into small pieces, but does not execute a new will.
Who would take the property on the testator’s death?

 Intestacy.

32. A different testator has a properly executed will giving everything other than the farm
(e.g., the house, the bank account, the Picasso,…) to the second child; the will further provides
that the two children are to share the farm. Following a Thanksgiving holiday full of family
drama, the testator executes a second will expressly revoking the first will and giving each child
40 percent of the estate, with the remaining 20 percent to go to charity. A year later the testator
executes a document amending the first will to say that the second child gets only a life estate in
the house, with the house to go to charity upon the second child’s death. Who gets the testator’s
property upon his death?

 Second child gets a life estate in the house and takes everything other than the farm in fee
simple. The two children share the farm.

33. A testator executes a will leaving half her property to her husband, one quarter to her
sister, and one quarter to her three children. Her property consists of a bank account, a stock
market fund, some personal items, and a rental property. Three years later she and her husband
divorce; and a year after that she dies. Who gets her property? What if her property also
included a pension account and a life insurance policy from her employer with the husband
designated as the survivor beneficiary? What if she also had a revocable inter vivos trust with
the husband as the beneficiary?

 One quarter to her sister, three-quarters to her children. UPC 2-804.

 Pension and life insurance go to husband. Egelhoff.
 IV trust is revoked, so one quarter to her sister, three-quarters to her children. UPC 2-
804 (“governing instrument”).

34. A testator has a will devising all of her property to her husband, or if her husband is
dead, to her husband’s daughter from a previous marriage. The testator and the husband later
divorce, and the testator dies shortly afterward. Who gets her property?

 Her husband’s daughter from a previous marriage. Testamentary intent.

35. A testator has an 8-page will in which the pages are not stapled or attached to each other
in any way. There is a place on each page for the testator to initial, but these were left blank;
instead, the testator simply signed the will at the bottom of page 8, which is where the
witnesses also signed. Following the testator’s death a dispute arises over the dispositive
provisions on page 4 of the will. Are the page 4 provisions presumptively valid? Might it
matter whether the lawyer kept a copy of the will?

 All 8 pages are integrated. Rigsby.

36. Fred types and prints a document he entitles “My Gifts,” in which he lists all the
bequests he would like to make. Fred subsequently writes on a piece of paper, “I want all my
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property to be distributed according to the ‘My Gifts’ list,” and subsequently signs the piece of
paper, and dies two days later. What will be the outcome, and why?

 Follow “My Gifts.” Incorporation by Reference; UPC 2-510.

37. Bob properly executes a will that provides that some of his property will be distributed
according to a separate list; and that the remainder goes to child 1. The separate document,
which is typewritten and signed at the bottom (though with no witnesses) and dated five years
after the will, lists various items of household property to go to child 2; it also says that one of
the stock funds should go to child 3, and the farm should be divided between children 4 and 5.
Who takes? What if the separate document were dated six months prior to execution of the will?
Would it matter if the separate list were handwritten?

 Child 2 takes household items and the remainder goes to child 1. UPC 2-513. The stock
funds and farm go to child 1.
 If earlier, then integrated.
 If handwritten, then a valid holographic codicil.

38. Suppose that Bob instead had a will that devised all of his property to “The Bob
Trust.” The Bob Trust is a revocable inter vivos trust with $100, with the property to be
distributed

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equally to his five children. Bob subsequently adds some text to the back of the trust document
with the same dispositive provisions as in the previous question. Who takes?

 Follow the specific disposition added. UTC 602(c)(2)(B).

39. My properly executed will provides that Elizabeth gets my book collection, Julia gets the
cars, and the remainder goes to charity. Some of the books are subsequently stolen, as a result of
which I receive a $20,000 payment from the insurance company, which I use to buy a car. I die
one year later. Who gets the cars?

 The cash payment would definitely go to Elizabeth as non-ademption, 2-606, but given
the acts of independent significance, all cars go to Julia.

40. A testator executes a will that devises “my house and all its contents” to child 1, the
stock fund to child 2, and everything else to child 3. Two years later the testator sells $2 million
of the stock fund to buy a Pissarro painting, which is proudly displayed in the living room. A
year later the testator dies. Who gets the Pissarro; and who gets all the other property?

 Child 1 gets the Pissaro. Child 2 gets what’s left in the stock fund. Child 3 gets
everything else. Acts of Independent Significance.

41. Sister 1 has a properly executed will that gives gifts to various charities, with the
remainder to a grandchild. Sister 2 subsequently executes a will with a devise of $2 million “to
be allocated among charitable recipients in proportion to their receipts from the will of Sister
1,” with the remainder to a nephew. Three years later Sister 1 executes a new will explicitly
revoking will 1 and containing new dispositive provisions, including distributions to different
charities. Sometime later Sister 1 dies, followed by Sister 2. Who takes Sister 2’s estate?

 Sister 1’s 1st will is incorporated by reference, unless shown otherwise by ambiguity.

42. You agree to sell me your car for $1,000 (much less than its market value) in return for
getting a $20,000 bequest from my will. The next day I dutifully execute a codicil to my will
giving you a specific devise of $20,000. Ten years later I trade in the car for $100, decide that it
was a lousy car all along, and execute a new will that revokes the old will and gives you $500.
Can you sue me (I am still alive)? What if I am 88 years old and the doctors say I will live just
three weeks? What I’m dead – do you have any recourse? Would it matter whether you were
my daughter?

 Contract isn’t enforceable until you die! UPC 2-514.

43. A husband and wife execute identical wills in which each leaves everything to the
spouse if he/she survives, and if not, then the property is divided equally between his son from a
previous marriage and her daughter from a previous marriage. This is the product of two
meetings with a lawyer at which all parties agree that this is a fair outcome. The wife dies first,
the husband takes her property and promptly remarries, has a child with the new spouse,
executes a new will leaving everything to the new spouse, and dies.

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4
(a) Can the first wife’s daughter claim a portion of the estate, and if not, does she have
any other recourse?

 No, because this is not an enforceable contract! UPC 2-514.

(b) If the daughter can claim a portion of the estate, would that include assets the
husband acquired after the wife’s death (he won $10 million from the lottery)?

 Yes, she has a claim to whatever he owns at death.

(c) What would have happened if the husband had never executed a new will?

 Even though the new spouse is entitled to an intestate share as a pretermitted share, the
majority view is that the contract prevails.

(d) What if the husband had executed a new will giving half his estate to his
stepdaughter from the first marriage, but during life spent lavishly on the child from the first
marriage, including private schooling and foreign trips, and there was nothing left for his
estate?

 This might be fine.

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44. A nine year old child has a third grade homework assignment of bringing to school a one
paragraph essay. The child writes, “I give everything I own, including my trust fund, to my
friend Sally. I mean it. I want Sally to be rich.” She then signs the document. The next day she
is struck by a car on the way to school and dies in the hospital. Does Sally get her property?

 Need to be 18! UPC 2-501.

45. A 95-year-old woman who is mentally infirmed and living in an institution asks for a
piece of paper and a pen, and writes “I give everything I own, including my trust fund, to my
friend Sally. I mean it. I want Sally to be rich.” She then signs the document. She dies the next
day. Does Sally get her property? Would it matter if she had written, “I give my trust fund to
Sally, and the house in Malibu, my 200,000 shares of Apple stock, and the 20,000 acre farm in
Indiana, to my daughter Sarah,” and it transpired that she owned no home, no farm, and no
Apple stock?

 First example is ambiguous enough that it could go both ways. UPC 2-501. Second
example is clear that she doesn’t know what she’s disposing. UPC 2-501.

46. Richard’s will gives half of his property to his three children, share and share alike, and
half “to be shared among the members of the 2014 Detroit Tigers (baseball team) in
celebration of their stirring World Series victory over the San Francisco Giants.” Sadly, the
Detroit Tigers did not win the 2014 World Series, nor did they play in the World Series; they
made the 2014 baseball playoffs, but were smeared 3-0 by the Baltimore Orioles in the first
round. The San Francisco Giants won the 2014 World Series; the last time Detroit won the
World Series was 1984. Who takes Richard’s estate?

 Mistake, then admit extrinsic evidence. UPC 2-805. If lack of capacity, then all goes to
intestacy.

47. John’s will devises his house (worth $500,000) to friend A, his investment fund (worth
$400,000) to friend B, and the remainder (worth $2 million) to charity. The will explains that
his three best friends in the world were A, B, and C, but that C gets nothing because he is
already dead. It turns out that C is not dead, but simply out of communication for an extended
period of time while hiking the Appalachian Trail. John dies shortly after executing the will and
before finding out that C is alive. Who gets John’s property?

 Plain meaning of the original will.

48. An 88-year-old hospitalized testator had a will leaving everything to the four children,
but one week before dying executes a new will giving half the estate to her doctor, and one-
quarter to the attending nurse. The hospital has videotapes of all of the interactions between the
testator and the doctor and nurse, and these tapes clearly show that neither the doctor nor the
nurse ever encouraged the testator to favor them in the will, and indeed, never mentioned the
will; the doctor and nurse were simply nice to the testator. Do the children have grounds for a
claim in probate court? Would the situation differ if there were no videotape?

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  Rebuttable presumption of undue influence  rebutted by videotapes, if presented by
doctors and nurses.

49. A healthy middle-aged married man executes a will leaving 20 percent of his property
to the lawyer who prepared the will, and the remaining 80 percent to his spouse and children.
Do the spouse and the children have grounds for a claim? Would such a claim succeed?

 Attorney-client is a confidential relationship, and 20% is suspicious. But it’s a middle-

aged married man, so perhaps not susceptible. However, see model rules.

50. A healthy 70-year-old woman with four grown children executes a will devising her
estate to the children in equal shares. One of the children is a lawyer, and also by far the most
affluent of the four (two are destitute); the lawyer child prepared the will. The testator dies two
years later. Do the other three children have grounds for a claim, and if so, will they succeed?

 I don’t think this is undue influence because it’s a standard will drafted by the child.

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51. An 85-year-old man with a deceased spouse and two grown sons marries a 19-year-old
woman. His previous will gave everything to the sons. One month after their marriage he
executes a new will giving everything to the new spouse, and a year later he dies. Do the sons
have grounds for a claim, and if so, will they succeed? Would it matter if there were reliable
testimony that the 19-year-old told all her friends that she “could not stand the old geezer,”
and “was doing it for the money”?

 Seems ok.

52. Karl’s will gives $20,000 to each of his five grown children, and the remainder to his
girlfriend of two years. The will has a clause that anyone who brings a claim against the estate
gets nothing. One of the children nonetheless brings a claim, arguing that the girlfriend exerted
undue influence. The probate court dismisses this claim. Who takes Karl’s estate?

 If the child had probable cause, then their claim was ok. UPC 2-517.

53. A 70-year-old client asks your advice about estate planning. The client’s spouse is
deceased, she has three grown children, and she has a boyfriend of one year who introduced her
to a new church (she was raised Methodist), the 1,000-member Church of New Life, which asks
members to leave at least half of their estate to the church. The client is very excited about both
the church and the new boyfriend. You conclude from your conversations with her that the
client is of sound mind, that she loves the boyfriend, and that she has a genuine and thoughtful
interest in the church. The client wants to leave half her property to the church and 40 percent to
the new boyfriend, with only 10 percent to be divided among her children. What advice would
you give her, and how would you proceed?

 Multiple wills and letters to the lawyer.

54. An elderly client has a will giving everything to the children, but has a change of heart
and starts working with a lawyer about a new will that gives everything to a surviving brother.
After two meetings the lawyer’s office drafts a new will, but when the client appears for the
third meeting the office printer is broken and they cannot print and execute the will. They
schedule a new appointment for a week later, but the same thing happens. At the follow-up
appointment two weeks later, a fire alarm in the building makes everyone leave before the will
can be signed. And just prior to another follow-up meeting a month later (this was the holiday
season), a stranger in the building lobby bumps into the client, knocking her to the floor and
requiring a trip to the hospital emergency room. While there she has a heart attack and dies.
Can the brother take any of the estate?

 Could go either way, under harmless error. Unclear whether the decedent reviewed and
assented to the final version of the agreement. UPC 2-503.

55. Child 1 tells an elderly parent that child 2 secretly hates him. The next week the parent
tears up his will, which had given child 2 80 percent of the estate, and a month later dies
intestate. It turns out that child 2 loved the parent. Who takes the parent’s property, and does
child 2 have a claim?

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  The transfer would be invalid for fraud. Remedy could mirror DRR.

56. My will says that one-tenth of my property goes to “my friend David,” and the rest to my
children. During my lifetime I had two close friends named David, one of whom claims that I
told him he would be favored in my will. Will the probate court entertain testimony from him on
this subject? Can he bring other witnesses who can testify about what good friends we were?

 Yes, can bring witnesses.

57. Jason’s will provides that half of his estate will be divided between his grandsons Bill
and Bob, and half divided among his nephews Sam, Sandy, and Stuart. The trouble is that Jason

10
does not have grandson Bill, though he does have a grandson Sam; and he does not have a
nephew Sam, though he does have a nephew Bill. Who takes his estate?

 Need evidence to show intent. UPC 2-805. Unclear whether Bill or Sam’s share would
change.

58. My will says that my neighbor Don gets 5 percent of my estate; but as it happens, I
have two neighbors named Don, and am friendly with both. Will a court hear evidence about
which one I liked best, and award the property to him? If not, then what will happen to the 5
percent?

 No, court will hear evidence about which Don the testator intended. If unclear, residual,
then intestacy.

59. An elderly parent has no will, and has four children who live in different parts of the
country. One of the children moves in with the parent, and two years later the parent executes a
will giving 85 percent of his property to that child; the other children get 5 percent each. On the
parent’s death do the almost-disinherited children have claims against the estate that might be
successful?

 No, expectancies are not property interests. No evidence of undue influence.

60. A parent executes a will giving 25 percent of his estate to his son and the remainder to
charity. There is undisputed testimony that the parent subsequently told the son and many other
people that his will gave 75 percent to the son and the remainder to charity. After the parent dies
can the son successfully challenge the will to get 75 percent?

 Plain Meaning of will.

61. Tom’s will gives half his estate to child 1, half to child 2, and one-quarter to charity.
Tom’s lawyer files an affidavit saying that the client meant to give just one-quarter to child 2,
but that the lawyer messed up, and the client did not catch the mistake before executing the will.
How much property will each party take? What if Tom’s will provided that three-quarters goes
to child 1 and one-quarter to child 2, with nothing to charity; but the lawyer’s affidavit said that
the client had intended each child to get half?

 Both should get reformed. UPC 2-805.

62. Frank’s will gives 10 percent of his estate to Susan, who – unknown to Frank – had
died a year earlier. Susan is survived by a daughter. Frank’s will divides the remainder of his
estate between Anne and Bob, both of whom survive Frank. Who gets his estate? Would it
matter whether Susan were a sister or a friend? What would have happened if Susan were alive
and Anne had died between the execution of Frank’s will and Frank’s death? Would it matter
whether Anne were a sister or a friend? Would it matter whether Anne had a surviving son?

 If Susan is a sister then her daughter will take, but if she’s a friend then the share goes to
intestacy. It does not matter whether Susan was alive at the time the will was created, but
11
 lineal descent does matter.

63. Emma’s will leaves her property “to my sister Lydia if she survives me, and otherwise
to my sister Katherine.” Lydia dies between execution of the will and Emma’s death; Lydia is
survived by a husband and two children, and Katherine is still alive. Who takes Emma’s estate?

 “If she survives me” alone is insufficient to overcome antilapse, but the alternative devise
might be enough to express a contrary intention. UPC 2-603(b)(3).

64. Jane’s will leaves her property “to my children,” of which she had three: child 1, child
2, and child 3. Child 1 subsequently dies, and is survived by a spouse and one child. Who takes
Jane’s estate?

 Antilapse applies to child 1’s share.

65. William’s will gives the house to child 1, the car to child 2, the bank account to child 3,
and everything else to child 4. The house subsequently burns down, and with the proceeds
William buys a small condo worth half as much as the house, and puts the rest ($200,000) into
the bank account. Three years later, when the bank account has dwindled from its peak (right
after the infusion of insurance money) of $800,000 to a still-respectable $500,000, William
dies. What does each child get from the estate?

 Child 1 takes condo; child 2 the car; child 3 the $500k; and child 4 everything else.
Ademption and acts of independent significance, again.

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66. Dean’s will devises $100,000 to child 1, $100,000 to child 2, and the remainder to child
3. At the time of his death the estate is worth $500,000, so the remainder is $300,000, but
shortly thereafter the estate is required to pay $100,000 in back taxes, leaving only $400,000 in
the estate. How much does each child get? Would it make a difference if the will had explicitly
provided that child 3 get $300,000, with the remainder to a distant nephew?

 Child 1 $100k, Child 2 $100, Child 3 $200k.

 Child 1 takes 1/5 of the abatement ($20k), Child 2 1/5 of the abatement ($20k), Child 3
3/5 of the abatement ($60k). So: Child 1 takes $80k, Child 2 takes $80k, Child 3 takes
$240k. UPC 3-902(a).

67. Justin’s will gives his airplane plus $100,000 to child 1, the house to child 2, and
everything else to child 3. Justin subsequently sells the airplane and uses the proceeds, plus an
additional $300,000, to buy a yacht. A year later he dies. What does each of his children get?

 Child 1 gets the yacht, but there may be a strong presumption against. Ademption (gray
area).

68. A testator’s will gives child 1 the Renoir, child 2 the house, and divides the rest between
children 3 and 4. If the testator subsequently donated the Renoir to the Metropolitan Museum of
Art, who gets his property when he dies? Suppose instead of giving the painting to the Met the
testator gave it to child 4 a year before dying – then who would get his property when he died?

 Donating the Renoir is presumably ademption, so child 1 takes nothing here, in either
case.

69. When the children are 14 and 12 years old, a parent executes a will giving $1 million to
child 1 (the elder), $1 million to child 2, and the remainder to charity. Child 1 does not attend
college, but child 2 does; and the parent pays for the college, which costs $100,000. When child
2 graduates from college the parent gives the child a new car worth $25,000 as a graduation
present. The parent subsequently dies. How is the estate divided?

 No ademption by satisfaction because no contemporaneous writing.

70. Mary attempts to create a trust for the benefit of her son, Thomas. She conveys $100,000
to the trust, to be paid to Thomas when he turns 35, and the trust document provides that
Thomas is the trustee. Has she created a valid trust? What if the trust further provides that if
Thomas dies before he turns 35 then the money is paid to her nephew George – has she then
created a valid trust?

71. You want to create a trust for the benefit of your children during lifetime, and at their
deaths, for the benefit of your grandchildren. What considerations would influence your choice
of whether the trustee should be a bank or one of your relatives?

72. My will gives my brother John “$50,000 with the expectation that he will use part or all
of this money to support the education of his nephews.” Upon my death John gets the $50,000,
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and a year later one of the nephews feels he may have to drop out of college because he cannot
afford the tuition. The nephew appeals to for support to John, who refuses to help him. Can the
nephew bring a claim against John, and if so, did John commit a breach of trust by simply
putting the $50,000 in his own bank account?

73. At a holiday dinner you tell your twin 12-year-old nieces, in the presence of many
others, that you have set aside a fund of $10,000 to pay for around-the-world trips for them
when they turn 18. Two years later, their parent, your sister, asks for an accounting of the trust,
and you reply that you do not have one. Have you committed a breach of trust, and if so, are
you liable?

74. My father’s will devises $200,000 to a trust for the benefit of the children of his best
friend, with me as the trustee. Can I refuse to be the trustee, and if so, what happens? What if I

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do not know that the money is for a trust, because no one told me – instead, I thought that the
$200,000 was simply a bequest to me. Five years later, after I have spent $30,000 of the money
on myself, the friend’s children appeal to me for support, and the error is discovered. Can I then
refuse to be the trustee? Am I liable for breach of trust for my actions in the meantime? What
if I am unable to make good the $30,000?

75. You give your brother $25,000 with instructions to use it to make $100 monthly
payments to each of his four children. After a year he stops making the payments. Has he
breached a trust, and if so, who has standing to challenge him?

76. I tell my four nephews that I have a $25,000 fund with which I will give them
$100 monthly payments. After a year I stop paying. Have I breached a trust, and if so,
who has standing to challenge me?

77. You put $100,000 into a foreign investment fund, and simultaneously execute a
document creating an irrevocable trust for “the support, welfare, and education” of your nieces,
with yourself as trustee, and three named nieces as beneficiaries. The trust assets are “any and
all gross profits earned by the assets in the foreign investment fund,” with investment losses for
this purpose not subtracted from investment gains, so gross profits cannot be negative. After 30
years the investment fund will return to you the $100,000, or whatever is left of it; everything
else is to be used for the nieces. Have you created a valid trust?

78. You execute a separate document creating a trust for your grandchildren, using resources
to be bequeathed to the trust in your will. Upon your death the trust will receive assets from your
estate, invest the assets, and distribute all the accumulated income and principal to then-living
grandchildren when the youngest turns 40 years old (assuming that at least one is younger than
40 at the time of your death). Is this a valid trust?

79. Your will devotes $1 million to sets up a trust in which the trustee is your best friend,
who is instructed to distribute the income of the trust annually “to a person or people who have
been particularly helpful to others;” after 20 years, the trust principal is to be distributed to three
individuals “who have clear views of an appropriate future for the United States.” Is this a valid
trust?

80. Ann’s will leaves $75 million in trust for her pet goldfish; the trustee, First Bank, is
instructed to use the annual income for lavish fish tanks, staff, and the best in fish food. After 20
years the remaining money is to go to Ann’s grandchildren. Is this a valid trust?

81. In the presence of others I give my brother $10,000 cash, which I explain that he is to
save and invest, distributing the income and principal to my children “as they need it,” with
whatever is left to be shared with them when they turn 40. My brother says nothing, accepts the
money, and we have nothing written down.

(a) Have I created a valid trust, and if so, is my brother the trustee?

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(b) Suppose that two years later I approach my brother and say that I’ve changed my mind
and want the money back. There is now $9,000, because he has given some to my children. Am
I entitled to ask for the $9,000 back, and if so, can I sue him to get the remaining $1,000?

(c) Suppose that instead of $10,000 cash I gave my brother the title to a house that I owned
as an investment property, explaining that he was to use the rental income it generates to
support my children, and convey the house to them when they turn 40. Would this affect the
validity of the trust? If the trust is invalid then who owns the house?

82. George is hospitalized with a terminal illness. A week before he dies he has a
conversation with his son, in the presence of others, in which George says he would like to
leave
$1 million to the son in his will, but only if the son promises to use the money to care for
George’s sisters. The son agrees, and the next day George executes a new will giving $1 million
to the son. Is this provision of the will valid, and if so, has George also created a valid trust?
Would it matter if George’s will said “$1 million to my son, for him to dispose of in the manner
in which we agreed”?

83. Steven gives $400,000 in trust to his sister Alice, with instructions to distribute income
and principal “to whichever of Steven’s children, in the view of the trustee, most needs the
money.” Alice starts paying $10,000 per month to Steven’s daughter, with nothing to either of
Steven’s two sons. Can one of Steven’s sons bring a challenge to the trustee’s exercise of
discretion in this way, and if so, under what circumstances and on what grounds?

84. Louise creates a trust for the benefit of her nieces, with her brother Robert as trustee. The
trust provides that it can be amended only by delivery of written instructions to Robert. A few
years later Louise instructs Robert to remove one of the nieces as beneficiaries, since she chose
to attend The Ohio State University; but Louise makes this instruction orally, not in writing.
Robert complies, distributing income and principal henceforth only to the other beneficiaries.
Ten years later Louise dies. Can the excluded niece bring a suit against Robert for breach of
trust?

85. Justin conveys $1 million to Sally and simultaneously signs a trust document
providing that Sally is to use the money “for the education, support, and welfare of her
children.” Justin later has a change of heart and tears up the trust document. Under what, if
any, circumstances will he have thereby revoked the trust?

86. At the time of your death you own $300,000 worth of stocks; a home worth $400,000
that you hold in joint tenancy with your husband; and a joint bank account, also with your
husband, in which there is $150,000. During your lifetime you had created two revocable trusts
with your daughters as beneficiaries; each trust had $75,000 of assets at the time of your death.
You die with considerable unpaid debts. What is the maximum amount that creditors can claim
from your estate?

87. Martin and Mary are married. Mary is the sole beneficiary of Martin’s will; furthermore,
Martin made Mary the contingent beneficiary (upon Martin’s death) of his life insurance policy,
his company pension, his bank account (it was a POD account), and a revocable inter vivos
16
trust.

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Martin and Mary divorce two years later, and a year after that Martin dies, without having
changed his will or any of the beneficiary designations. What property does Mary take?

88. Harrison’s will conveyed $600,000 to Second Bank as trustee, with instructions to invest
one-quarter of the funds in Ford Motor Co. stock, the rest in general equities, and accumulate
income for 20 years. At the end of 20 years the trustee is to give Harrison’s oldest child the Ford
stock, and his two younger children $200,000 each; the local library is to get $20,000, and the
remainder is to go to State University. Alas, poor stock market performance meant that at the
end of 20 years the Ford stock was worth just $80,000, and the equities worth just $250,000.
What should each of these beneficiaries receive?

89. Carl executed a will devising all of his property to “The Carl Trust,” and at the same
time signed a document creating that trust, which has no other property. The trust provides that
the trust assets are to accumulate for ten years, then be distributed to the youngest of Carl’s five
children. Seven years later Carl dies, and the trustee dutifully invests the trust property and
accumulates the income for ten years, after which he distributes everything to Carl’s youngest
child. Upon learning of this distribution a few months later, one of the other children files suit,
arguing that the younger child exerted undue influence over Carl. Is such a suit able to proceed?

90. The beneficiary of Kathy’s life insurance policy is her sister Michelle. Late in life she
has second thoughts, and executes a will giving the life insurance policy to her brother Brian,
though does not inform the insurance company of this. When Kathy dies who gets the life
insurance payment?

91. Larry conveyed $200,000 to an irrevocable trust that provides that the income from the
trust “should be paid annually in equal shares to my children A, B and C,” with the principal to
be shared among them after 15 years. After five years child A dies without descendants; after
eight years child B dies, survived by two children of his own. Child C survives for the 15 years.
What trust payouts does each receive?

92. Chris has $100,000 in a bank account with a POD designation for her sister Amy. A year
before she dies Chris executes a new will indicating that Tom should receive the bank account.
Who gets the account on Chris’s death? Would it make a difference if instead of a POD bank
account the fund in question was Chris’s pension account?

93. Jim is confined to a nursing home and has declining mental capacity, so a court appoints
a conservator to manage his financial affairs. Jim had previously created a revocable inter vivos
trust that paid income to his children; the trust principal was required to be invested in foreign
stocks. Can the conservator change the investment rule for the trust while Jim is still alive? And
if the trust investments do very well, so that the children are thereby well provided for, can the
conservator amend Jim’s will to reduce the bequests to the children and increase bequests to
other beneficiaries?

94. Nick and Nancy were married 50 years, but Nick found Nancy irksome, so his will gave
Nancy just 20 percent of his property. Nick died with $1 million of property, and Nancy at the
time owned $500,000 of property. Is Nancy able to claim more than $200,000 (20 percent of $1

18
million) at Nick’s death, and if so, how much more? If Nick’s will left Nancy the house (worth
$200,000), to which he held exclusive title, could she refuse to take the house and get something
else instead? Would any of this change if Nancy died three months after Nick and before any of
this was resolved? Would it matter whether they really loved each other? (Answer: of course it
matters; love is the only thing that really matters.) What would be the outcome if they had been
married just 10 years? What would be the outcome if they had been married 50 years but at his
death Nick had $500,000 in stock and a life insurance policy with a $500,000 payout and Nick’s
grandson as the beneficiary?

95. Zach and Zoe are in love (see previous question) and decide to marry, but before they
do, they sign a prenuptial agreement in which both agree not to claim the elective share from the
estate of the other. True to form, Zach leaves nothing to Zoe in his will. Can she claim
anything?

96. Walter and Wanda are also married, and have been for 40 years. Walter puts his money
where his heart is, leaving everything to Wanda in his will. Trouble is, it’s not really Walter’s
money. Walter dies with $400,000 in assets, but he owes the bank $700,000. Will Wanda get
anything from Walter’s estate, and if so, how much?

97. Paul’s will leaves everything to his co-worker Peter, but Paul subsequently marries
Mary, and does not change his will. Who gets Paul’s property upon his death five years after his
marriage? What if Paul and Mary had been married for 30 years? What if Mary predeceases
Paul, but is survived by her son Arlo? What if Peter was not only Paul’s co-worker, but was also
his son from a prior marriage?

98. Ed executes a will giving everything to his spouse if she survives him; but in the event
of the spouse’s death, $100,000 to child A, the boat to child B, the house to child C, and the
remainder to a nephew. Ed subsequently has another child (“D”), his spouse dies, and then Ed
dies. Who gets his estate? Would it matter if Ed had executed a minor codicil to the will after
the birth of child D?

99. Ernie executes a will giving everything to his spouse if she survives him; but in the
event of the spouse’s death, everything to a nephew. At the time Ernie was childless; but he
subsequently had a child (“Zeke”). Ernie’s spouse dies, and then Ernie dies. Who gets his
estate?

100. A testamentary trust conveyed the farm to a trustee who was to use the income to
provide for the comfort and support of the settlor’s children. The trustee attempts to sell the
farm in order to invest the proceeds in a diversified stock portfolio, but the best offer after six
months is just $200,000, whereas the trustee is convinced that the farm is worth $250,000.
Eventually the trustee sells it to himself for $300,000, and dutifully invests the proceeds in
diversified stocks. Has the trustee committed a breach, and if so, if challenged by one of the
children what are the likely remedies?

101. In the previous question suppose that the trustee sold the farm to himself for $75,000,
that the trustee reports the sale to the beneficiaries, and they do not complain at the time, but
instead
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bring a claim eight years later, by which time the farm is worth $1 million. What is the likely
outcome?

102. Ned’s will creates a trust “for the education, welfare, and support of my children,” with
Ned’s brother Matt as the trustee. What are Matt’s distribution responsibilities – on what basis is
it to distribute the trust income and principal to his children? Would it matter if the trust
document added that Matt was to make these distributions “in his sole, absolute, and
uncontrolled discretion”?

103. Jonas’s will creates a trust for the benefit of Jonas’s grandchildren, with Jonas’s niece
Audrey as the trustee. The trust property is Jonas’s hoard of gold ingots, worth $2 million at the
time of his death. Audrey slowly sells the ingots to generate income to make distributions to the
beneficiaries, but six years later the gold market tanks, and the ingots become worth only one
quarter of what they once were. Has Audrey breached the trust, and if so, to what damages is she
potentially liable? If she is guilty of a breach, then what, exactly, would she have had to do to
have avoided a breach? Would it matter if the trust document instructed the trustee to keep all of
the trust investments in gold ingots? Would it matter if Audrey had had a conversation with
Jonas’s grandchildren about the gold investments, told them it was possibly risky, but suggested
that they potential gains might outweigh the risks, and they agreed with this investment strategy?

104. How would your answers to the previous question change, if at all, if instead of being
a testamentary trust this was a revocable inter vivos trust, and Jonas was still alive?

105. You are a trustee of a testamentary trust created by your sister. Her will gives $80,000 to
the trust, which you promptly add to your own bank account (previously $75,000, now
$155,000) in order to get the trust (and coincidentally, yourself) a higher rate of interest available
only to accounts with balances of $150,000 or greater. You keep careful accounts of how much
money is in the trust v. how much is your own money, accurately prorate interest receipts
between the two accounts, and make distributions to beneficiaries from the account, again being
careful to record the resulting balances of the trust and your own funds. Have you breached the
trust?

106. Your mother’s will creates a testamentary trust for the benefit of your siblings with you
as the trustee, requiring you to invest funds and pay the income to the siblings. You have little
expertise with investments, and are worried about the consequences of doing a bad job. Should
you invest the property in a general equity fund, or do you need to hold some bonds as well?
Does it matter for the investments what the needs of the beneficiaries might be? If you hire an
investment advisor to pick investments for the trust assets, and pay the advisor out of the trust
assets, are you liable to suit from the beneficiaries if they advisor payments are deemed
excessive relative to the quality of the advice received? Could you be sued for failing to hire an
advisor? Will it matter what rate of return the investments earn?

107. Aiden created a revocable inter vivos trust with you as the trustee. The trust document
instructs the trustee to distribute the income from trust assets equally to each of Aiden’s
grandchildren for 15 years, then to distribute the principal equally among them. Three years
after formation of the trust, Aiden comes to see you, explains that one of the grandchildren “is

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bugging him,” and tells you to stop making payments to that grandchild. If you do so, are you
liable for breach of trust?

108. The testamentary trust of your beloved uncle, of which you are the trustee, instructs you
to sprinkle income and principal of the trust among your uncle’s children “in your sole,
absolute, and uncontrolled discretion.”

(a) You decide to convert the trust into a unitrust that pays 5 percent of assets each year
to your uncle’s children, share and share alike. Have you exceeded your authority as a
trustee?

(b) Instead of the unitrust deal you convert the trust into an irrevocable trust with the same
provisions concerning the annual sprinkling of income and principal, but adds that at the time
of the death of the first of your uncle’s children all of the remaining principal will be distributed
to his children then living. Have you now exceeded your authority as trustee? Would it matter
whether you sought court approval prior to converting the trust into the new one?

109. Lauren’s will allocates $5 million to a trust that it creates, with the requirement that the
trustee use the income, and if necessary the principal, from the trust to provide for the health
care of her first child, Katie. Otherwise the trustee has complete discretion to distribute the trust
income and principal to Katie and/or Lauren’s other two children, or, if the trustee so decides, to
reinvest the annual trust income. After 20 years the remaining trust principal is to be distributed
to the three children equally. The trustee decides to convert this trust into a new and different
trust that pays for a very comprehensive medical insurance plan for Katie, and otherwise
accumulates income for 20 years, at the end of which all the money is divided among the three
children. Has the trustee exceeded her authority? Would it matter what the terms of the
insurance policy were? Would the trustee need court authority to do this conversion?

110. Pam’s will creates a trust with $1 million principal, requiring the trustee to pay half of
the income from this fund annually to each of her two children, with the remaining principal to
be divided equally between them after 15 years. Instead of doing this, the trustee uses all of the
trust principal to fund two new trusts, each with $500,000, with one child the sole beneficiary of
one of the trusts and the other child the sole beneficiary of the other. Furthermore, these two
new trusts have the same terms as the original trust: they pay the trust income to the beneficiary
for 15 years, then distribute the principal to the beneficiary. The original trustee makes herself
the trustee of the two new trusts, and the first trust ceases to exist. Furthermore, the trustee
invests the money in the two trusts rather differently: the trust for the benefit of child one is
invested in stocks, whereas the trust for the benefit of child two is invested in government bonds.
Has the trustee exceeded her authority, and if so, can she be sued for beach of trust? If so, what
are the potential damages?

111. Clark is the trustee of a trust created by his grandfather, of which Clark’s cousins are
the beneficiaries. The trust assets are invested in a diversified stock and bond portfolio, but
Clark recognizes an outstanding investment opportunity in buying distressed properties in
downtown Detroit. He has in mind selling one quarter of the trust’s stocks and bonds, and
using the proceeds to invest in Detroit land. Would such an action constitute a breach of trust?
Would Clark need to tell the beneficiaries first, and/or obtain their explicit approval for such an
action?
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112. Your mother created a discretionary trust of which you and your brother are the
beneficiaries, and from which you both receive distributions twice a year. Every two years the
trustee sends you information on the trust investments and other trust accounts, including
distributions. The trustee makes a very large distribution to your brother (normally you each get
$10,000 twice a year, but this one time your brother gets $200,000), which you discover when
you receive the subsequent statement from the trustee. Do you have any possible course of
action against the trustee?

113. In the previous question, is the trustee obliged to report the distribution to your brother?
Suppose that the trustee’s accounts simply indicated trust balances, so the drop in balances
could have been either due to a distribution to another beneficiary or else investment reversals.
Would such accounting be adequate? Would it matter whether you and your brother had
previously agreed that such accounting would be adequate?

114. Arthur owes $200,000 to the bank and has only $50,000; but Arthur is also a beneficiary
of a trust established by his uncle. This is a discretionary trust with Arthur’s Aunt as trustee; the
Aunt “in her sole, absolute, and uncontrolled discretion” can make distributions to Arthur or his
sister. What potential recourse does the bank have against the trust?

115. Suppose that the trust in the previous question had a spendthrift provision –
what difference would that make?

116. Suppose that instead of a spendthrift provision the trust provides that the trustee
must make distributions “for the education and support of Arthur and his sister.” What
difference would that make?

117. In the previous three questions, what difference, if any, would it make if instead of owing
$200,000 to a bank Arthur owes the money to a former spouse for unpaid alimony?

118. Austin, a doctor who is concerned about potential malpractice claims, puts $1 million
into an irrevocable spendthrift trust with himself as beneficiary, his best friend as trustee, and
his second best friend as trust protector. The terms of the trust permit the trust protector to veto
any distribution of the trust. Austin is subsequently sued by a former patient, who is awarded a
$3 million judgment. What potential recourse does the patient have against the trust?

119. You are 90 years old, have a terminal illness, and want to devote your remaining
$500,000 of assets to provide support for your child who is permanently disabled,
institutionalized, and currently receiving support from Medicaid. What should you do?

120. Suppose that you are near death and want to use your substantial savings to provide
lifelong support to a child who is healthy but has the kind of lifestyle that entails limited
work history and accumulation of considerable debts. What should you do?

121. Mother’s will conveyed $500,000 to create a testamentary trust with her brother as
trustee and her four children as beneficiaries. The trust terms are that the trustee should pay
income from the trust to the children for 20 years, then distribute the principal among them.
After two
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years the four children appeal to the trustee to have the trust terminated and the principal paid to
them immediately. What should the trustee do?

122. In the previous question, would it matter if a meteor had struck the town, destroying
the homes of three of the four children (though remarkably not killing any of them)?

123. What if the trust had a spendthrift clause – would that matter? How about a spendthrift
clause and a meteor?

124. Would it matter if the trust in question 121 had to pay more taxes than necessary,
so distributing the principal right away would avoid some tax obligations?

125. William executes a written document creating an inter vivos trust with his sister as
trustee and his nephews as beneficiaries. The trust provides that the sister is to pay income from
the trust to the nephews. After one year William approaches the sister and says he wants the
trust to pay income to his nieces instead of his nephews. There is nothing about that in the
written trust document. What should the sister do?

126. Louis’s will devotes $10 million to establish a testamentary spendthrift trust for the
benefit of his grandchildren, each of whom (there are eight) is to receive $5,000 per year for ten
years, with the remaining principal to be shared among them after ten years. In year two, one of
the grandchildren contracts a rare disease, for which the only treatment is available in Rome,
and at great expense ($400,000). The grandchild does not have the resources to pay for this
treatment. Should the trustee appeal to the court for permission to use trust assets to pay for the
treatment, and if so, will the suit succeed? Would it matter if the other grandchildren all agreed
to this use of the funds (provided that the $400,000 is subtracted from the sick grandchild’s
distribution after 10 years)?

127. Father’s will created a testamentary trust with Uncle as the trustee and Father’s three
children as beneficiaries. This is a unitrust in which the trustee is to distribute 6 percent of trust
assets every year to the beneficiaries, followed by distributing all trust assets after 20 years. The
trustee dutifully reports trust affairs to the beneficiaries every year, but they grow concerned by
the investment performance of trust assets: the investments are properly diversified, but earn
distressingly low rates of return. Can the children have Uncle removed as trustee, and if so, then
under what circumstances is it possible to do so?

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