Pour-over wills and revocable trusts in modern estate planning

Today’s class
 Pour-over wills
 Joint tenancies in realty as our final example of a
nonprobate way to transfer property
 Spouses holding a joint tenancy in their home
 Planning for incapacity
Revocable trusts (pp. 439-440)
Durable powers of attorney
Advance directives for medical care
Disposition of the body
Follow up
 On Monday, we had a practice question involving
standing to challenge a will, and we saw that heirs
apparent under the rules of intestacy have standing
 Who else has standing?
 Interested persons—people who are beneficiaries under
the will and people who were intended beneficiaries under
a prior will and would receive less under the contested will
 What about a family member or friend who was
victimized by the undue influence of a caretaker but
doesn’t qualify as an heir apparent or beneficiary
under a will?
 Tortious interference with an expectancy (pp. 215-220)
Pour-over wills and revocable
trusts in modern estate planning
The combination of a pour-over will and trust allows
people to avoid probate and to consolidate all of their
property into one instrument.
Avoiding probate—can’t avoid taxes, but can reduce other
Privacy—both from strangers and disappointed heirs
Choice of law—can select which state’s law applies (which
also is allowed under UPC § 2-703)
Reduce delay–bequests can be disbursed more quickly
Amending estate plan—just amend the trust provisions
Blended family—greater control over disposition of estate
with surviving spouse and children from a prior marriage 3
Pour-over wills and revocable
trusts in modern estate planning
There are some disadvantages
Creditors may have a longer statute of limitations period
for filing claims against a trust than against a probate
Legal fees for a pour-over will and trust may be greater
than for just a will
Less certainty about the application of the subsidiary law
of wills (but most of the issues can be addressed by a
well-drafted trust)
Pour-over wills, revocable
trusts, and nonprobate transfers
Trustee of T’s
Transfer of
Trustee of T’s
Model pour-over provision
“I give my residuary estate, which shall not
include any property over which I have
power of appointment, to the trustee of
that certain trust already created by me and
known as the JOHN DOE 20___
DECLARATION OF TRUST, as in effect at
my death, of which I now am trustee and of
which my spouse now is named as
successor trustee.”
UPC §2-511: Testamentary
Additions to Trusts, p.444
(a) A will may validly devise property to the trustee of a trust
established or to be established … during the testator’s lifetime
by the testator… or … at the testator’s death by the testator’s
devise to the trustee, if the trust is identified in the testator’s
will and its terms are set forth in a written instrument, other
than a will, executed before, concurrently with, or after the
execution of the testator’s will ... . The devise is not invalid
because the trust is amendable or revocable, or because the
trust was amended after the execution of the will or the
testator’s death.
What were the facts in
Clymer v. Mayo?, p.445
In her second will, Clara Mayo executed a pour-over
will and revocable trust
 Her husband was the life beneficiary of the trust, with
remainder interests to her nephews and nieces and then to
Boston University and Clark University
 Clara designated the trust as the beneficiary of her life
insurance policy and retirement plan
 Clara divorced her husband and made a close friend the
beneficiary of her life insurance policy but did not change
the retirement plan beneficiary or the terms of the trust
 Thus, her ex-husband remained the principal beneficiary of her
retirement plan
Clymer v. Mayo
Clymer v. Mayo
and Life
Niece and
What result in Clymer?
Under Massachusetts law, the interest of a spouse
in a will is revoked upon divorce from the testator
Even though there was no similar statutory
provision for trusts, the court applied the principle
of revocation
The “will and trust were integrally related components
of a single testamentary scheme” (second ¶ of opinion
excerpt, p. 446)
Same result under UPC § 2-804 and Ind. Code §
Clymer and retirement plans
Why did this case come out differently from
Egelhoff, where ERISA prevented the
revocation of the divorced spouse’s
beneficiary status?
In this case, the retirement plan assets followed
the beneficiary designation, which was the trust.
It was the trust beneficiary designation that was
revoked, not the retirement plan beneficiary
Joint tenancies in land
The joint tenants have equal interests; most important
actions require the agreement of all tenants
Joint tenants cannot devise their shares in a will. Upon
death, the decedent’s share vanishes and is taken by
the other joint tenant(s).
Not unilaterally revocable, so an imperfect will substitute
(though Brousseau, p. 448, suggests some exceptions)
To pass by will, the joint tenants must sever the joint tenancy
and convert it into a tenancy in common.
Creditors can reach a joint tenant’s interest only during
the tenant’s lifetime.
Durable powers of attorney
pp. 448-449
Powers of attorney terminate upon principal’s
incapacity; durable powers of attorney survive the
principal’s incapacity (though not the principal’s death)
Trustees versus agents under durable powers
Trustees can retain powers after settlor’s death
Courts will appoint successor trustees if trustee dies; only
principal can provide for successor agents
Trustees enjoy broad powers to conduct transactions with the
trust property; agents tend to be much more limited (though
principal can grant broad powers)
Third parties more comfortable dealing with trustees
What were the facts in
Kurrelmeyer?, p. 449
Once again, we have children from a first marriage
pitted against the wife from a second marriage
Kurrelmeyer appointed one of his children and his wife
as agents under durable powers of attorney
After Kurrelmeyer lost capacity, his wife created a trust
for him, with herself and child as co-trustees, and
transferred the Clearwater property into the trust
Under the trust, the wife had greater rights to the
Clearwater property than she would have received per
Kurrelmeyer’s will, and the children had lesser rights
In re EstateIn of
re Estate
Supreme Court
of Vermont
Life Estate in
First Wife
Remainder in
in Trust
Did the wife have authority to
create a trust?
Under traditional agency law, any powers of an agent
have to be expressly stated, with terms of appointment
construed strictly
This court took a more flexible approach, based on the
intent of the principal
Note the trade-off between ability to benefit the principal
and the potential for abuse
Courts can err on the side of protecting against abuse by
construing the powers very strictly, or they can err on the
side of benefiting the principal by construing powers more
flexibly, and rely on agent liability to protect against abuse 16
Did the wife have authority to
create a trust?
Which provisions of the power of attorney suggested the
wife could create a trust?
“In addition, I authorize my said attorney to: (1) execute and
deliver any . . . trust instruments” (p.451)
The agent also was authorized “to add all of my assets deemed
appropriate by my said attorney. . . to any trust of which I am
the Donor” (p.451)
What suggests the wife could not create this particular
The power of attorney authorized the making of gifts “to
members of my family (other than himself or herself)” (p.452)
Did Kurrelmeyer really contemplate his wife revising his will?17
Could Kurrelmeyer delegate
the power to create a trust?
Trusts serve important purposes in estate planning and
asset management, and there are not countervailing
considerations that would justify a prohibition on
delegation of the trust-creation power, as with the power
to execute a will (p. 453)
But if agents can’t execute wills, how can they use trusts
to rewrite wills?
The court observed that Kurrelmeyer could and did delegate
the power to “convey any real estate . . . which I may own”
Could Kurrelmeyer delegate
the power to create a trust?
 A better way to explain why agents can rewrite wills
through their trust-creating power:
 The prohibition on agents writing or amending a will is
rooted in longstanding statutory interpretation that would
need legislative revision.
 But it is not rooted in a powerful public policy against
surrogate decisions. Indeed, there will be many cases in
which changes in circumstance make a change in estate
planning desirable after the principal loses decisionmaking capacity.
Did the wife breach her
fiduciary duties as agent?
By conveying the Clearwater property to the trust, she
gained greater property rights
On the other hand, the wife argued that the conveyance
was justified by prudent tax and estate planning
The power of attorney prohibited her from making gifts to herself
Fiduciary principles prohibit agents from using their authority for
their own benefit except as authorized
In addition, the approval of the co-trustee provided a safeguard
against abuse
Case remanded for further proceedings on this question
What happened on remand?
As note 1 indicates, p. 454, the trial court found that
the trust carried out Kurrelmeyer’s intentions, which he
had discussed with an estate planning attorney
He hadn’t executed his intentions because he wasn’t sure
whom to name as his wife’s co-trustee, and he lost his
decision-making capacity before resolving the question (too
much deliberation can defeat an estate plan)
In the trial court’s view, the wife was simply carrying
out Kurrelmeyer’s intent (which was to give her the
freedom to move out of the Clearwater property)
The Vermont Supreme Court upheld the trial court’s
holding (992 A.2d 316 (Vt. 2010))
Advance directives for
health care
Treatment directives (i.e., living wills)
Proxy appointments
Designates an agent to make health care decisions for the
Hybrid or combined documents
Specifies treatment in the event of incompetence, usually
for life-sustaining treatment decisions.
Incorporates both of the first two approaches, that is,
directs treatment preferences and designates an agent to
make substituted decisions.
Important to make sure that people share
preferences about organ donation with family
End-of-life decisions
Patient has the right to accept or refuse
medical treatment (federal constitutional
right, plus state constitutional right
and/or state common law right)
Even if the treatment is life-sustaining
Includes all treatments, whether
ventilator, dialysis, antibiotics, or artificial
nutrition and hydration
Regardless of patient’s diagnosis and
Survives a patient’s loss of mental capacity
Substitute decisionmaking
Look to prior instructions from
patient (e.g., advance directive, oral
statements, pattern of practice,
religious or other moral views)
Follow prior instructions if they give
“clear and convincing” evidence of
the patient’s preferences
Either preferences with regard to
treatment or with regard to surrogate
decision maker
 Note the absence of formalities that we’ve
seen with preferences about the
distribution of one’s estate
Substitute decisionmaking
Evidence of the patient’s wishes is
clear and convincing when it is
“sufficient to persuade the trier of
fact that the patient had a firm and
settled commitment” to decline
treatment. O’Connor, 531 N.E.2d
607, 613 (N.Y. 1988).
Clear and convincing evidence
Some states look only at specific
Other states (including IN) look at full
range of evidence.
Some states find that patient’s prior
statements amount to clear and
convincing evidence while other
states would find the same evidence
to be insufficient.
Clear and convincing evidence absent
Provide treatment (NY before 2010)
Defer to the family’s wishes (IN, MA,
Decide on basis of patient’s best
interests (AZ, MN)
Vary the standard depending on the
patient’s prognosis (CA, MI, NJ, NY,
These “default” rules are the medical
treatment analogues for intestacy rules
 Implemented by court decision or statute
Indiana’s living will statute
The attending physician shall . . .
certify . . . that a person is a
qualified patient if . . .
The attending physician has diagnosed
the patient as having a terminal
condition. . . .
Ind. Stat. Ann. § 16-36-4-13
Indiana’s living will statute
“Terminal condition” means a
condition . . . from which . . .
there can be no recovery; and
 death will occur from the terminal
condition within a short period of time
without the provision of life prolonging
Ind. Stat. Ann. § 16-36-4-5
Indiana’s living will statute
The living will declaration of a
person diagnosed as pregnant by
the attending physician has no
effect during the person’s
Ind. Stat. Ann. § 16-36-4-8(d)
Indiana’s living will declaration
If at any time my attending physician
certifies . . . that
(1) I have an incurable . . . illness,
 (2) my death will occur within a short
time; and
 (3) the use of life prolonging procedures
would serve only to prolong the dying
I direct that such procedures be
withheld or withdrawn . . . .
Ind. Stat. Ann. § 16-36-4-10
Indiana’s living will declaration
____I wish to receive artificially supplied
nutrition and hydration, even if the effort to
sustain life is futile and excessively
burdensome to me.
____I do not wish to receive artificially
supplied nutrition and hydration, if the effort
to sustain life is futile or excessively
burdensome to me.
____I [leave] the decision [about artificially
supplied nutrition and hydration to my health
care proxy].
Ind. Stat. Ann. § 16-36-4-10
Indiana’s living will statute
A declaration must be substantially in the
form set forth in either [the living will
declaration or the life prolonging
procedures declaration], but the
declaration may include additional,
specific directions.
The invalidity of any additional, specific
directions does not affect the validity of
the declaration.
Ind. Stat. Ann. § 16-36-4-9
Indiana’s living will statute
This chapter does not impair or
supersede any legal right or legal
responsibility that any person may
have to effect the withholding or
withdrawal of life prolonging
procedures in any lawful manner.
Ind. Stat. Ann. § 16-36-4-17(e).
Indiana’s life prolonging
procedures declaration
[I]f at any time I have an incurable . .
. illness determined to be a terminal
condition I request the use of life
prolonging procedures that would
extend my life.
This includes appropriate nutrition
and hydration. . . .
Ind. Stat. Ann. § 16-36-4-11
Indiana’s living will statute
A living will declaration . . . shall be given
great weight by the physician in
determining the intent of the patient. . . .
Ind. Stat. Ann. § 16-36-4-8(f)
A life prolonging procedures will
declaration . . . does require the physician
to use life prolonging procedures as
Ind. Stat. Ann. § 16-36-4-8(g)
Indiana’s living will statute
An attending physician who refuses
to use, withhold, or withdraw life
prolonging procedures from a
qualified patient shall transfer the
qualified patient to another
physician who will honor the
patient’s living will declaration . . .
Ind. Stat. Ann. §16-36-4-13(e)
Indiana’s living will statute
If the attending physician, after
reasonable investigation, finds no
other physician willing to honor the
patient’s declaration, the attending
physician may refuse to withhold or
withdraw life prolonging
Ind. Stat. Ann. § 16-36-4-13(f)
Indiana’s power-of-attorney statute
[An attorney in fact who] has the
authority to consent to or refuse
health care . . . [may have health
care] withdrawn or withheld when it
is not beneficial or when any benefit
is outweighed by the demands of the
treatment . . . .
Ind. Stat. Ann. § 30-5-5-17(a)
Indiana’s power-of-attorney statute
To empower the attorney in fact to act, the
following language must be included in an
appointment under IC 16-36-1 in substantially
the same form set forth below:
I authorize my health care representative to make
decisions in my best interest concerning
withdrawal or withholding of health care. If at any
time based on my previously expressed
preferences and the diagnosis and prognosis my
health care representative is satisfied that certain
health care is not or would not be beneficial or
that such health care is or would be excessively
burdensome, then my health care representative
may express my will that such health care be
withheld or withdrawn . . . even if death may
Ind. Stat. Ann. § 30-5-5-17(a)
Indiana’s power-of-attorney statute
My health care representative must try to
discuss this decision with me. However, if I
am unable to communicate, my health care
representative may make such a decision
for me, after consultation with my
physician or physicians and other relevant
health care givers.
To the extent appropriate, my health care
representative may also discuss this
decision with my family and others to the
extent they are available.
Ind. Stat. Ann. § 30-5-5-17(a)
Indiana’s Health Care Consent Act
An individual . . . may appoint another
individual as a representative to act for the
appointor in matters affecting the
appointor's health care.
An appointment and any amendment must
meet the following conditions:
Be in writing.
Be signed by the appointor or by a designee in the
appointor's presence.
Be witnessed by an adult other than the
[Note that living will statute and out-of hospital DNR
statute restrict who may serve as a witness.]
Ind. Stat. Ann. §16-36-1-7
Indiana’s Health Care Consent Act
The appointor may specify in the appointment
appropriate terms and conditions, including
an authorization to the representative to
delegate the authority to consent to another.
The authority granted becomes effective
according to the terms of the appointment.
The appointment does not commence until
the appointor becomes incapable of
consenting. The authority granted in the
appointment is not effective if the appointor
regains the capacity to consent.
Ind. Stat. Ann. §16-36-1-7
Indiana’s Health Care Consent Act
When a surrogate decision-maker has
not been appointed, health care
consent may be given by:
a judicially appointed guardian of the
person, or if no guardian
a spouse, a parent, an adult child, or an adult
sibling, or
 the individual's religious superior, if the
individual is a member of a religious order
 Ind. Stat. Ann. §16-36-1-5
Out-of-hospital DNR statute
Applies when the patient has either:
a terminal condition (as defined in the
living will statute) or
 a medical condition such that, if the
person were to suffer cardiac or
pulmonary failure, resuscitation would be
unsuccessful or within a short period the
person would experience repeated
cardiac or pulmonary failure resulting in
Ind. Code § 16-36-5-10
Out-of-hospital DNR statute
Applies to locations other than acute care hospitals
May be executed by the patient or the patient’s
Ind. Code 16-36-5-12
Emergency medical services commission
instructed to develop a DNR bracelet or necklace
Ind. Code 16-36-5-11
May be issued only by the patient’s attending
Ind. Code 16-36-5-5
Ind. Code 16-36-5-17
The statute does not create a presumption
regarding the intent of a person who has not
executed an out-of-hospital DNR
Ind. Code 16-36-5-24
In re Martin
“Only when the patient’s prior
statements clearly illustrate a serious,
well thought out, consistent decision to
refuse treatment under these exact
circumstances, or circumstances highly
similar to the current situation, should
treatment be refused or withdrawn.”
538 N.W.2d 399 (Mich. 1995)
Alternatives to statutory forms
Medical Directive
ABA health care planning guide
Description of goals of treatment
E.g., I want treatment only if it will allow me to:
Maintain or regain the ability to recognize and
communicate with family and friends
Maintain or regain consciousness
Leave the hospital
Important to ensure that the alternative
form satisfies the state statutory form’s
procedural formalities

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