ST. THOMAS UNIVERSITY SCHOOL OF LAW

EXAMINATION NO.

WILLS AND TRUSTS

SPRING 1997 FINAL EXAMINATION

PROFESSOR AMY D. RONNER TIME LIMIT: 3 HOURS

IN TAKING THIS EXAMINATION, YOU ARE REQUIRED TO COMPLY WITH THE SCHOOL OF LAW RULES AND PROCEDURES FOR FINAL EXAMINATIONS. YOU ARE REMINDED THAT AT THE CONCLUSION OF THE EXAMINATION, YOU SHOULD PLACE YOUR EXAMINATION NUMBER (YOUR ANONYMOUS GRADING NUMBER) ON EACH EXAMINATION BOOK. ALSO WRITE THE INSTRUCTOR'S NAME AND TITLE OF THE COURSE ON EACH EXAMINATION BOOK, SECURE ALL BOOKS AND YOUR EXAM WITH A PAPER CLIP, CHECK OFF YOUR EXAM NUMBER AND NOTE THE TIME IN THE "SIGN-OUT" BOOK PROVIDED IN THE DESIGNATED CLASSROOM. ALSO BE SURE TO LEAVE YOUR EXAM IN THE DESIGNATED BOX.

INSTRUCTIONS

  1. This is a CLOSED BOOK exam. No notes or books are permitted in the examination room.

  2. Complete Problems I, II, and III.

 

PROBLEM I: STYXVILLE APPEAL

You are working as a judicial clerk for Justice Moribund on the Supreme Court of Styxville. The following case is pending in that court and Justice Moribund has asked you to provide her with a memorandum of law on all of the issues involved.

In the memorandum, Justice Moribund expects you to explain what arguments all parties are making. She also wants you to tell her what you think the outcome should be and to explain your answers thoroughly. She specifically wants you to analyze the problem in depth and elaborate on all of the arguments that the parties have available to them. Further, Justice Moribund informs you that she is more interested in your analysis than in your actual conclusion.

Your research, however, is limited to only those materials covered in your Wills and Trusts course.

IN RE ESTATE OF PALLOR

Styxville has a statute that allows the "lineal descendants" or "spouse" of a testator or testatrix to petition a court to invalidate a devise to charity where all of the following conditions are met:

  1. where testator or testatrix dies leaving part or all of his or her estate to a benevolent, charitable, educational, literary, scientific, religious, or missionary institution, corporation, association or purpose;

  2. where the will was duly executed at least six months before the testator or testatrix's death; and

  3. where it can be shown by clear and convincing evidence that the devise was made without proper deliberation or that the charitable devise was the result of undue influence.

Mr. Pallor, a well-respected and prominent resident of the town of Cerberus in the state of Styxville, had been happily married to the same woman for about thirty years. Although they did not have any children, the Pallors had a pet cat, named Obit.

The Pallors named the cat after their attorney, Ms. Obit, who was also a close friend of Mr. Pallor for about twenty years. They decided to name the cat after Ms. Obit not just because she was a good attorney and friend, but also because she was the director of Cat Charity. Cat Charity was a non-profit organization devoted to caring for sick and/or abandoned cats.

In the Pallors' household, Obit was adored and treated just like a member of the family. Quite often, the Pallors would call the cat by special pet names, like "Goddess Obit" or "Ms. Obit" or Princess Obit." Obit sat at the head of the table with the Pallors, ate only the finest food and paraded about the house with a very expensive Morganite collar.

The harmonious life of the Pallors, however, suddenly came to a halt when Obit became mysteriously ill after dining on some Servuga caviar. When Mr. Pallor rushed Obit over to a special veterinarian in France, Dr. Chant D Cynge ("Dr. Chant"). Dr. Chant discovered that Obit had actually been poisoned. Luckily, Dr. Chant gave Obit some medicine and Obit recovered.

On the flight home, Mr. Pallor was suddenly consumed by a dreadful fear that his wife was the one responsible for the near tragedy. Specifically, he believed that Ms. Pallor was trying to kill Obit because she was jealous of all the time he spent with the cat.

After that incident, Mr. Pallor began to fear and avoid his wife. In fact, he ordered her not to go near the cat ever again and insisted on personally preparing Obit's food. He also commanded his wife to move into the guest cottage on their property so that he could be alone with Obit. Mr. Pallor frequently sat on his porch and watched his wife go in and out of the guest cottage. He believed that his wife had turned into a witch and was concocting various spells designed to hurt the cat.

During this period of time, Mr. Pallor retired from his job and cut himself off from all of his friends -- except for his attorney, Ms. Obit. Ms. Obit came to the house once a day, brought Mr. Pallor some groceries and lavished a great deal of attention on the cat.

One day, Mr. Pallor said to Ms. Obit:

Obit, we need to prepare for my death. Obit, as you know, I do not want my wife to have anything more than the law absolutely requires me to give her. Because you are my attorney, I want you -- Obit -- to draw up my will. Obit, I only trust you.

Unfortunately, Mr. Pallor died about five months later. In his will, Mr. Pallor had expressly cut out his wife. He, however, did give her the minimum statutory share of $10,000. Further, Clause A of Mr. Pallor's will devised $500,000 to Obit and $750,000 to Cat Charity.

When Mr. Pallor's will was offered for probate, Ms. Pallor filed objections to Clause A. The court conducted a trial on several issues and the jury found in favor of Ms. Pallor on all of them. In this proceeding, the trial judge did not allow the parties to introduce extrinsic evidence. The court ultimately found that with respect to Clause A, Pallor died intestate and thus, the property passed to Ms. Pallor as the heir at law. The intermediate appellate court affirmed the ruling in all respects.

Ms. Obit and Cat Charity have appealed the trial court's rulings with respect to Clause A and that appeal is presently pending in the Supreme Court of Styxville.

PROBLEM II: MULTIPLE CHOICE

Forty (40) Points

Write the answer IN YOUR BLUE BOOK. If you put down more than one answer, you will not get any credit. Also, no credit will be given for an explanation.

1. Which of the following is nonprobate property?

  1. Life insurance proceeds of a policy on the decedent's life with a beneficiary named in the insurance contract.

  2. Interests in trust.

  3. Property disposed of in a will, which designates such property as nonprobate assets.
  4. All of the above.
  5. Only A and B.

2. Which of the following statements is correct?

  1. Generally speaking, the law of the state where the decedent executed his or her will governs the disposition of personal property.

  2. Generally speaking, the law of the state where the decedent's real property is located governs the disposition of the real property and personal property.

  3. A decedent can specify in his or her will which state law shall govern the disposition of both the personal property and the real property.

  4. All of the above are correct.

  5. None of the above are correct.

3. Mr. Demise has died intestate. He has left one child and two elderly parents. The parents are poor and in bad health. Which of the following statements is correct?

  1. Under all intestate succession statutes, Demise's parents are not considered heirs.

  2. Under all intestate succession statutes, Demise's parents are considered heirs and will share with the child.

  3. In some jurisdictions, the courts will consider the equities and make sure that Demise's parents share in the intestate distribution of the estate.

  4. A and C are correct.

  5. None of the above are correct.

4. Which of the following statements is true under the Uniform Simultaneous Death Act?

  1. The benefactor is automatically deemed to have died before the beneficiary.

  2. Where there is no sufficient evidence of the order of deaths, the beneficiary is deemed to have predeceased the benefactor.

  3. Where there are two joint tenants, Amy and Barry, that die simultaneously, one half of the property is distributed as if Amy survived and the other half is distributed as if Barry survived.

  4. Both B and C are correct.

  5. Both A and C are correct.

5. The decedent leaves no spouse. He, however, has three children and an estate worth $50,000. One daughter, Amy, received an advancement of $10,000. Which of the following statements is correct?

  1. Amy receives an additional $20,000 from the estate.

  2. Amy receives an additional $10,000 from the estate.

  3. Amy's siblings each take a $20,000 share.

  4. Both B and C are correct.

  5. None of the above are correct.

6. Which of the following is true in situations in which a killer seeks to take by descent or distribution from the estate of the victim?

  1. Some states have statutes preventing the killer from taking by descent or distribution from the estate of the victim.

  2. Some states allow legal title to the property pass to the killer in spite of the crime.

  3. Some states allow legal title pass to the killer, but equity holds that killer to be a constructive trustee for the heirs or next of kin of the decedent.

  4. Only A and C.

  5. A, B and C are correct.

7. In Ronner's will, there is a no-contest clause. It provides that if Barry contests the will he shall take nothing in lieu of the provisions made for him in the will. A court dealing with such a clause might:

  1. Determine that Barry's litigation involving the will is not really a contest, but instead a suit for construction.

  2. Enforce the no-contest clause unless the court determines that there is probable cause for the contest.

  3. Impose a constructive trust.

  4. Only A and B are correct.

  5. A, B and C are correct.

8. Oedipus has poor eyesight and he asks his heir apparent, Antigone, to bring him the document prepared for him as a will so that he can sign it. Antigone brings Oedipus a document that is not Oedipus' will and she knows that it is not the document that Oedipus wants. Oedipus signs it, believing it is his will. This is an example of:

  1. Fraud in the inducement.

  2. Fraud in the execution.

  3. Undue influence.

  4. Only B and C are correct.

  5. Only A and C are correct.

9. Which of the following statements is correct?

  1. In some states, a will is valid as a holographic  will, whether or not witnessed, if the signature and material portions of the document are in the testator's handwriting.

  2. Some states require a holographic will to be entirely handwritten.

  3. Some states require that a holographic have a full date (day, month and year).

  4. Only A and B are correct.

  5. A, B and C are correct.

10. Ronner's will bequeaths her opal ring to her oldest friend, Susan Weiner, and $10,000 to Professor Gordon. The residuary devisee is Barry Hendricks. Susan Weiner and Professor Gordon predecease Ronner. Under the common law, which of the following statements is correct?

  1. the ring will go to Susan Weiner's child.

  2. the $10,000 will go to Barry Hendricks.

  3. the $10,000 will go to Professor Gordon's issue.
  4. A and B are correct.

  5. A and C are correct.

11. After making several specific and general devises to a number of persons, Ronner devises the residue of her estate onehalf to Barry and one-half to Susan Weiner. Barry predeceases Ronner. Under the common law rule, which of the following statements is correct?

  1. Barry's one-half share goes To Susan Weiner.

  2. Barry's one-half share goes to his issue.

  3. Barry's one-half share goes to Ronner's heirs.

  4. Barry's one-half share escheats to the state.

  5. None of the above.

12. Ronner's will gives Barry "the sum of $30,000 to be paid from the proceeds of sale of my IBM stock." At death, Ronner's IBM stock is worth $40,000. Most courts would:

  1. Deem Barry entitled to all of the IBM stock.

  2. Consider this to be a demonstrative legacy.

  3. Direct the executor to comply with Ronner's testamentary direction and sell $30,000 worth of the stock.

  4. Give the executor a choice of either selling the stock or selling other assets to raise the $30,000.

  5. Both B and C are correct.

13. Ronner's will devises her "ranch in Palm Springs" to Barry. Some years later, Ronner sells the "ranch in Palm Springs" and uses the sale proceeds to purchase a condo in Palm Beach. Ronner dies without changing her will. Which of the following statements is correct:

  1. The doctrine of ademption by extinction applies.

  2. Barry has no claim to the condo in Palm Beach.

  3. The gift of the "ranch in Palm Springs" is a specific devise.

  4. Since the "ranch in Palm Springs" is not owned by Ronner at her death, the devise fails.

  5. All of the above are correct.

14. In September, Professor Ronner executes a written instrument creating an irrevocable trust and naming Professor Gordon as trustee. The trust instrument provides that the income from the trust is to be paid to Alice for life, and upon Alice's death the corpus is to be distributed to Barry. Shortly thereafter, Professor Ronner delivers a copy of the trust instrument and $5,000 in cash to Professor Gordon and tells Professor Gordon that this money is to be held by him under the trust. Professor Gordon takes the money and puts it in his office. Ronner dies the following month. Shortly thereafter, Professor Gordon makes an announcement that he is not a trustee and never wanted to be a trustee. He gives the money away to charity. Which of the following statements is most accurate?

  1. There is no trust because Professor Gordon did not accept the office of trustee.

  2. There is a valid trust because Professor Gordon unequivocally accepted the office of trustee and his subsequent disclaimer was too late.

  3. If Professor Ronner is deemed to have effectuated delivery, there is a valid trust.

  4. Even without sufficient delivery of the trust property or trust instrument to Professor Gordon, the law can impose liability on Professor Gordon for the breaches of duties as trustee.

  5. Under these facts, there can be no trust and no liability as a matter of law.

15. Professor Ronner dies leaving a will that devises her residuary estate in trust, to pay the income to Alice for life, and on Alice's death to distribute the trust property to Barry. Which of the following statements is most accurate?

  1. Because there is no trustee, the trust must fail.

  2. Because the beneficiaries are not sufficiently delineated, the trust must fail.

  3. The court can appoint a trustee to carry out the trust.

  4. Because it is clear that the trust powers here were personaI to the named trustee, the trust must terminate.

  5. The court will treat this situation as if it were a declaration of trust and thus, hold the settlor to her obligations to manage the trust property.

16. Owner owns Roslynacre. Professor Ronner pays Owner $1,000,000 for Roslynacre. The deed conveying Roslynacre, however, names Professor Gordon as grantee. Which of the following statements is correct?

  1. If Professor Gordon is not a natural object of Professor Ronner's bounty, a presumption arises that Professor Ronner did not intend to make a gift of the property to Profesor Gordon.

  2. If a court finds that a resulting trust is created, Professor Ronner will be deemed the trustee for the benefit of Professor Gordon.

  3. The Statute of Frauds will prevent a resulting trust from arising in this situation because it involves real property.

  4. Only A and B are correct.

  5. None of the above are correct.

17. Professor Ronner conveys land to Professor Gordon upon an oral trust to pay the income to Nolan for life and upon Nolan's death to convey the land to Barry. Professor Gordon, however, refuses to perform. A court faced with this problem might:

  1. Allow Professor Gordon to retain the land because the Statute of Frauds forbids proof of the oral trust.

  2. Determine that Professor Gordon holds on a constructive trust for Professor Ronner.

  3. Determine that Professor Gordon holds on a constructive trust for Nolan and Barry.

  4. All of the above are correct.

  5. None of the above are correct.

18. Professor Ronner devises property to Professor Garcia in trust to pay the income to Barry for life or until such time as Barry appoints and to distribute the principal to such person or persons as Barry shall appoint either by deed during Barry's lifetime or by will. If Barry, however, does not exercise the power of appointment, at Barry's death Professor Garcia is to distribute the principal to Professor Gordon. Which of the following is correct?

  1. Professor Ronner is the donor.

  2. Barry is the donor of a general power of appointment.

  3. Professor Gordon is the donee of this special power of appointment.

  4. This power of appointment is exclusively testamentary and thus is invalid.

  5. Only A and C are correct.

19. A trustee has failed to earmark a trust investment. Which of the following is correct?

  1. Failing to earmark a trust investment is never considered a breach of trust because there is no self-dealing and thus, the trustee is not liable.

  2. Those courts following the older view will deem the trustee strictly liable for any loss resulting from the investment.

  3. Those courts following the more modern view will find the trustee liable only for such loss as results from the failure to earmark the trust investment.

  4. None of the above are correct.

  5. Only B and C are correct.

20. Professor Ronner died testate, leaving ten children. She named two of her daughters as executors. Ronner's will expressly directed her executors to sell her real estate and to divide the proceeds equally among her children. The executors sold Ronner's property in the Hamptons and the husband of one of the executors bought the property. Shortly thereafter that husband sold the property to Professor Gordon for a profit of over $100,000. Which of the following statements is correct?

  1. A court would probably apply the no further inquiry rule to this situation.

  2. A court would probably find that the executors' good faith and reasonableness in this transaction are irrelevant.

  3. If Professor Gordon is an innocent purchaser, a court might hold the executors to account for the complainants' share of the profits made on the resale of the property.

  4. All of the above are correct.

  5. Only A and C are correct.

PROBLEM III: SHORT ANSWER

Ten (10) Points

Alice has two children, Bob and Carol. Bob predeceases Alice, leaving a child, Doug. Carol predeceases Alice, leaving two children, Ellen and Fran. Ellen predeceases Alice, leaving two children, George and Harold. George and Harold survive Alice.

Alice dies intestate, leaving no surviving spouse.

A. Under a modern per stirpes system describe the share that each of the following individuals will get. Use a fraction or write out the share. (example -- 1/3 or one-third).

PUT THE ANSWER IN YOUR BLUE BOOK

1. Bob gets

2. Carol gets

3. Doug gets

4. Ellen gets

5. Fran gets

6. George gets

7. Harold gets

B. Under a classic per stirpes system describe the share that each of the following will get:

8. Fran gets

9. George gets

10. Harold gets