QUESTION I (60 minutes)

Vera Anthony was a very successful woman who in her 40s developed a great interest in breeding and racing horses. She bought a farm in Mitchell which she devoted to her racing business and called it Luckyview Stables. It became so successful that after a time it made up almost 1/2 of her estate in value. She was pleased that her son, Tony, was as enthusiastic about the business as she was. In 1990 she consulted her lawyer, Sandra Smith, about her will. Vera had 3 children, Tony, Sara and Blake, but she had not seen Blake for a number of years and wanted him to get no part of her estate. Because Luckyview had grown to be worth 1/2 of all she owned, Vera asked Smith to draft a will which had the following provision:

'I give my horse farm, Luckyview Stables, to my son, Tony, if he survives me.'

The residue was then left to Sara. Vera made a clear declaration to Smith that it was her intention to leave her estate equally to Tony and Sara.

In 1991 Vera had the great fortune of developing one of the top three year old horses in the country, Talking Trash Tony. Her reputation grew and she decided she was ready for a move up to a bigger farm. In 1992 she entered into a tax free exchange of Luckyview Stables for a new larger farm which she called Triple T Farms in honor of the horse that had made it possible. Because the new farm was worth more than her old place, she had to pay $250,000 in addition to her farm in the exchange.

After the exchange she called Smith to ask whether she needed to do anything to her will. Vera told Smith that she wanted Tony to have the new farm but still wanted an equal division between Tony and Sara. Smith said that she need do nothing since Tony would still be entitled to the farm under the will.

In early 1993 Blake heard about his mother's fortune and came to see her. They had a reconciliation and in May, 1993, Vera had Smith draft a new will leaving her entire estate in equal shares to her 3 children. In it was a provision saying that Tony should have first claim on Triple T Farms if he wanted it. In this will Vera also included a provision which expressly revoked all prior wills.

Sadly Vera's makeup with Blake was over quickly. When he failed to come home or even call at Christmas in 1993, Vera was sure his old wandering had returned. On January 10, 1994, after several attempts to reach Blake failed, Vera wrote out the following document:

'I no longer want the will I executed in 1993 to be effective and want to exclude my son, Blake, from taking any share in my estate. I want my old will of 1990 to be effective. I know now that it expresses my wishes.'

She then signed this document in the presence of 2 friends who both signed under her name as witnesses. Two days later Vera had a massive heart attack and died. At the time of her death her estate had a value of $1,500,000; of that, Triple T Farms made up $1,000,000 of the total.

Tony now claims that he is entitled to the farm by the terms of the 1990 will. Sara claims she is entitled to the entire estate under the 1990 will. Blake claims that Vera died intestate and that he is entitled to a 1/3 share of the estate as heir.

A statute of Mitchell provides as follows:

'If a later will which revokes a prior will by express provision is itself revoked, the prior will is not revived by revocation of the later will.'

1) How should Vera's estate be distributed? Why?

2) If either Tony or Sara receives less than his or her claimed share, does either have a cause of action against Smith?

QUESTION II (60 minutes)

A) (30 minutes) Yesterday a new client, Bryan Torgerson, sought your advice for estate planning. He is 68 years old and explained to you that he had been experiencing some problems with memory recently and had visited his doctor. After some tests the doctor told him that he had Alzheimer's disease. The diagnosis was tentative since the disease can only be absolutely diagnosed with an autopsy. Nevertheless, Torgerson wishes to proceed on the assumption that he does have the progressive disease and will quite rapidly lose much of his ability to function.

He told you that he wanted you to draft a will giving all of his estate to his friend, Marjorie Main. He met her at an AARP meeting a year ago and they have become very good friends. They traveled to Florida together this winter and now live together. He expects that she will take care of him as his disease progresses. He also told you that he has 2 children but they have not treated him well recently and he wants to be sure that they receive no part of his estate.

He is concerned that he not be kept alive by artificial means if he can no longer live on his own and wants your advice as to how to ensure that.

What advice would you give to Torgerson? Are there any special precautions that you need to take in dealing with a client like him?

B) (30 minutes) In 1990 Ernie Wills read an article on the use of the revocable inter vivos trust as a means to avoid probate. Thinking that a wonderful idea he bought a self help guide and drafted his own Self Declaration of Trust in which he declared himself trustee of a trust in which all income was payable to him as long as he was alive. The trust also provided, ÒAt my death the trustee shall pay all trust assets to my wife, Clara.Ó There was no further provision for distribution of the trust.

In 1991 Ernie and Clara had a falling out and were divorced. Ernie never changed his trust. In 1993 Ernie and Clara had a reconciliation and began to date again. They never remarried although they had made plans to when tragically they were both killed in an automobile accident last month. No one witnessed the accident, but the policeman who came along shortly after it occurred thought he heard Clara moan although he was not sure. Both Ernie and Clara were pronounced dead at the scene.

The state in which Ernie and Clara resided has the following statute:

'In order to inherit property in this state a person must survive the decedent by more than 120 hours. Unless a will provides otherwise, in order to take property as a devisee under a will, a person must survive the testator by more than 120 hours'

In his trust Ernie appointed Mitchell Bank as his successor trustee. Mitchell Bank has taken control of the assets of the trust. It has received a claim to the assets from the personal representative of Clara's estate saying that she was entitled to the trust as the remainder beneficiary. It has also received a claim for the assets from Ernie's 2 children by a prior marriage who claim to be his sole heirs at law.

What arguments would you make if you represented Clara's estate? What arguments would you make on behalf of Ernie's children? Who should prevail?