Exam 48: Wills and Trusts

Kai establishes a trust, naming Loo as the trustee and giving him discretionary investment power. A state statute confines trustees to investments in conservative debt securities. In investing the trust assets, Loo does not follow the statute, but generally exercises the degree of care that a prudent person would exercise in his personal affairs. In this situation, Loo is liable for

Miki establishes a trust for the benefit of Nan, naming Obi as the trustee. The terms of the trust instrument do not expressly state the event on which Miki wishes it to terminate. The trust will end

The trustee's duty of loyalty requires that he or she act in the exclusive interest of the grantor or settlor.

With a constructive trust, a court declares a property owner to be a trustee for parties who are, in fairness, entitled to the benefits that flow from the property.

A spendthrift trust provides for a beneficiary by giving him or her sufficient funds to maintain an extravagant lifestyle and still meet his or her obligations.

A party can be given the power to choose what type of and how much medical treatment a person who is unable to make such decisions will receive through

A party should always check the succession and inheritance laws of the state most likely to be involved in the resolution of a conflict related to the settling of an estate because

Flem owns shares of stock in Gas & Oil Inc. To create a trust with the stock for the benefit of his spouse Hana, Flem must convey the shares to

In his will, Rowan makes a gift of a rare Shakespeare folio to his sister Tiffany. Tiffany dies before her brother, survived by her daughter Uma. On Rowan's death, the gift of the folio

Because estate planning involves difficult decisions about the future, powers of attorney and living wills are often executed in conjunction with a will or trust.

Intestacy laws determine the distribution of property of one who dies without a valid will, and attempt to carry out the likely intent and wishes of the decedent.

A living will is a will in the usual sense that it disposes of property.

Faye executes a will in which Gail is appointed to administer the will. After Faye dies, Gail lacks the capacity to serve, and a court appoints Hedy to handle the probate of Faye's estate. In this situation, the administrator is

Because the rules of descent are uniform among the states, it is necessary to refer only to the language of any state's statute when addressing intestacy distribution.

Selena decides to create a trust for the benefit of her children. She deeds her property to the entity that she creates but retains the power to amend, alter, or revoke the arrangement. She also continues to hold the property and receive the income that it earns. This is

Under intestacy laws, a surviving spouse receives the decedent's entire estate.

Determining in advance how one's property and obligations should be transferred on death is the process of

Grover does not execute a will before he dies. His survivors include his spouse Helene and their two children, Irene and Johann. With respect to Grover's estate, under intestacy laws, Helene will probably receive

Wanda, an elderly woman, is diagnosed with cancer. The prognosis is that her condition will worsen and that eventually she will become too weak to breathe without the assistance of a respirator. She does not want to be kept alive in a "vegetative state." What are Wanda's options?

One way to transfer property outside the probate process, and thereby avoid the costs, is to own property in joint tenancy.