Fall 2000 Estates & Trusts

Final Exam

Prof. Robert McLeod

The exam is two-and-one-half (22) hours. All answers must be written in the blue books. Only your text and outlines prepared by you may be used for the exam. Graduating seniors must clearly state that they are a graduating senior on the exam answer books. The exam must be returned with the answer books.

QUESTION 1. (26 points)

John was married to Jane. John and Jane had three children together, Adolphus, Bonifacious, and Chisholm. John had a will dated 1/1/81 that devised everything to Ahis wife@, or if Ashe@ was not living, Ain equal shares to his two children, Adolphus and Bonifacious, but Chisholm is specifically disinherited and shall not receive any part of the estate.@ John then met Jim. There is no doubt that Jim was a man in the biological sense. John divorced Jane on 1/1/84. Jim had a Asex change@ operation on 1/1/85 whereby the surgery removed his Amale parts@ and in their place Amade female parts.@ (Forgive me for not being more graphic but I hope you understand the general intent of the facts.) On 5/1/85 Jim changed his name to Loretta. On 8/1/85 John and Loretta married in a civil ceremony. Neither the county nor the person performing the marriage knew of the sex change operation. John died on 12/2/00. At the time of John=s death, Chisholm was dead but he left two surviving children (Dan and Ellen). Adolphus and Bonifacious are still alive. Every person listed in this question wants the greatest possible sum allowed by Minnesota law. Analyze the claims of A-E and Loretta=s claims. Also explain the evidentiary limitations of the claims.

QUESTION 2. (17 points)

Jake created an irrevocable spendthrift trust for him and his wife, Helen. He funded the trust with $1,000,000. Jake was the trustee of the trust. Jake borrowed $500,000 from the trust on a promissory note bearing interest one point above current fair market value. Jake invested $250,000 in a real estate venture and invested the other $250,000 in the stock market. Jake made $100,000 profit on the real estate deal and lost $100,000 in the stock market. He then repaid the loan with interest. Jake then died. After Jake died, Helen was informed that Jake had used the money that he repaid to the trust as collateral for a loan (the amount was put up as collateral before he used it to repay his loan to the trust). The creditor is now demanding that the trust pay the debt. Helen comes to you for advice regarding the complete administration of the trust. What do you tell her?

QUESTION 3. (12 points)

Betsy is a boxer. Betsy creates a valid will on 1/1/90 devising her estate in equal shares to her six siblings. On 1/1/00 Betsy fought a match (at the encouragement of her manager but against her siblings= wishes) during which she was knocked out cold for 2 hours. After that her speech was slurred and her coordination was so bad that she would often stumble and fall. On 6/1/00 Betsy made a new will devising her entire estate to her manager. Betsy slowly deteriorated and finally died on 12/2/00 and the doctors said her death was the result of her fight on 1/1/00. At the time of her death, three of Betsy=s siblings were dead but each deceased sibling left two surviving children. Who get Betsy=s estate?

QUESTION 4. (8 points)

X wrote a will on 1/1/90 devising the entire estate to Y. X then wrote a will on 1/1/92 for the sole purpose of devising his home to Z. Y=s wife, Gwen, wanted the house so she secretly destroyed the will dated 1/1/92. X dies. All documents were in X=s possession. Who gets the home?

QUESTION 5. (12 points)

Jacob videotapes himself and during the recording he describes how he wants his estate to be distributed. After completing the videotape, Jacob creates a document that says: AThis videotape is my last will and testament. Dispose of my property as I have directed on the videotape.@ Jacob signs the document. Three days later he has two friends sign the document as witnesses but they never saw the videotape. Jacob tapes the will to the videotape cassette. Jacob dies. Is the videotape to be followed?

QUESTION 6. (5 points)

If you sign an employment contract with me assigning all property rights in your ideas and work product that can be patented or copywritten while you work for me, and then I contribute the profits to be earned from that contract to a trust, is that contribution considered valid trust corpus under common law?

QUESTION 7. (3 points)

In what order do devises abate?

QUESTION 8. (6 points)

Explain dependant relative revocation.

QUESTION 9. (8 points)

What happens to the following devises to non-family members when they lapse? How might the answers change if the devise was made to descendants of the testator=s parents? What if the devise was to your spouse?

a. Specific devise.

b. General devise.

c. Residual devise.

QUESTION 10. (3 points)

When is a gift adeemed?