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ANSWERS TO PROBLEMS
1. State whether or not a trust is created in each of the following situations:
(a) A declares herself trustee of “the bulk of my securities” in trust for B.
(b) A, the owner of Blackacre, purports to convey to B in trust for C “a small part” of
Blackacre.
(c) A deposits $100,000 in a savings bank. He declares himself trustee of the deposit in trust
to pay B $50,000 out of the deposit, reserving the power to withdraw from the deposit
any amounts not in excess of $50,000.
Answer: Creation of Trusts.
(a)A trust is not created because the description is so indefinite that the property cannot be
ascertained.
2. Testator gives property to Tim in trust for Barney’s benefit, providing that Barney cannot
anticipate the income by assignment or pledge. Barney borrows money from Linda,
assigning his future income under the trust for a stated period. Can Linda obtain any
judicial relief to prevent Barney from collecting this income?
3. Collins was trustee for Indolent under the will of Indolent’s father. Indolent, a
middle-age doctor, gave little concern to the management of the trust fund, contenting
himself with receiving the income paid to him by the trustee. Among the assets of the
trust were 100 shares of ABC Corporation and 100 shares of XYZ Corporation. About
two years before the termination of the trust, Collins purchased the ABC stock from the
trust at a fair price and after a full explanation to Indolent. At the same time but without
saying anything to Indolent, he purchased the XYZ stock at a price higher than its
current market value. At the termination of the trust, both stocks had advanced in market
value well beyond the prices paid by Collins, and Indolent demanded that Collins either
account for this advance in the value of both stocks or replace the stocks. What are
Indolent’s rights?
Answer: Duties of the Trustee. Collins can probably keep the ABC Corporation stock,
960.
4. Joe Brown gave $350,000 to his wife, Mary, with which to buy real property. They orally
agreed that title to the real property should be taken in the name of Mary Brown but that
she should hold the property in trust for Joe Brown. There were two witnesses to the oral
agreement, both of whom are still living. Mary purchased the property on September 2,
and a deed to it with Mary Brown as the grantee was delivered.
Mary died ten years later, without a will. The real property is now worth $800,000. Joe
Brown is claiming the property as the beneficiary of a trust. Mary’s children are claiming
that the property belongs to Mary’s estate and have pleaded the statute of limitations and
the statute of frauds as defenses to Joe’s claim. There is no evidence to prove whether
Mary would or would not have conveyed the property to Joe during her lifetime if she
had been requested to do so. What are Joe’s ownership rights to this particular real
property?
Answer: Resulting Trusts. Joe Brown is the owner of the real property by virtue of a
resulting trust and neither the statute of limitations nor other equitable defenses are a bar
5. On March 10, , John Carver executed his will, which was witnessed by William Hobson
and Sam Witt. By his will, Carver devised his farm, Stonecrest, to his nephew, Roy
White. The residue of his estate was given to his sister, Florence Carver.
A codicil to his will executed April 15, of that year , provided that $50,000 be given to
Carver’s niece, Mary Jordan, and $50,000 to Wanda White, Roy White’s wife. The codicil
was witnessed by Roy White and Harold Brown. John Carver died September 1, of that
year , and the will and codicil were admitted to probate. How should Carver’s estate be
distributed?
Answer: Wills: Attestation. Roy White will take Stonecrest, Mary Jordan will receive
$50,000 and Carver's sister will receive the residue. The bequest of $50,000 to Roy
White's wife is, in many jurisdictions, void because White attested the execution of the
6. Edwin Fuller, a bachelor, prepared his will in his office. The will, which contained no
residuary clause, provided that one-third of his estate would go to his nephew, Tom
Fuller, one-third to the city of Emanon to be used for park improvements, and one-third
to his brother, Kurt.
He signed the will in his office and then went to the office of his nephew, Tom Fuller, who
signed the will as a witness at Edwin’s request. No other persons were available in Tom’s
office, so Edwin then went to the bank, where Frank Cash, the cashier, also signed as a
witness at Edwin’s request. In each instance, Edwin stated that he had signed the
document but did not state that it was his will.
Edwin returned to his office and placed the will in his safe. Subsequently, Edwin died,
survived by Kurt, his only heir-at-law. How should the estate be distributed?
Answer: Formal Requirements of a Will. Several questions are posed by the problem.
First, the question arises as to whether or not the will has been properly executed.
7. Arnold executed a one-page will in which he devised his farm to Burton. Later, after a
quarrel with Burton, Arnold wrote the words “I hereby cancel and revoke this will
/s/Arnold” in the margin of the will but did not destroy the will. Arnold then executed a
deed to the farm, naming Connie as grantee, and placed the deed and will in his safe.
Shortly afterward, Arnold married Donna, with whom he had one child, Ernest. Arnold
died some time later, and the deed and will were found in his safe. Burton, Connie, and
Ernest claim the farm, and Donna claims dower. Discuss the validity of each claim.
Answer: Revocation of a Will: Operation of Law. Donna and Ernest share only.
8. The validly executed will of John Dane contained the following provision: “I give and
devise to my daughter, Mary, Redacre for and during her natural life and, at her death,
the remainder to go to Wilmore College.” The will also provided that the residue of his
estate should go to Wilmore College. Thereafter, Dane sold Redacre and then added a
validly executed codicil to his will, “Due to the fact that I have sold Redacre, which I
previously gave to my daughter, Mary, I now give and devise Blackacre to Mary in place
and instead of Redacre.”
Another clause of the codicil provided: “I give my one-half interest in the oil business that I
own in common with William Steele to my son, Henry.” Subsequently, Dane acquired all
of the interest in the oil business from his partner, Steele, and, at the time of his death,
Dane owned the entire oil business. The will and codicil have been admitted to probate.
(a) What interest, if any, does Mary acquire in Blackacre?
(b) What interest, if any, does Henry acquire in the oil business?
Answer: Codicils.
(a) Mary receives a life estate in Blackacre, since the codicil substituted Blackacre for
Redacre. An incident, quality or condition which attaches to a bequest or devise by
9. Leonard Wolfe was killed in an automobile accident while driving his Toyota Camry. The
car was rendered a total loss, and Wolfe’s insurance carrier paid his estate $18,550 for
damage to the vehicle. Under the terms of Wolfe’s will, any car owned at his death was
to be given to his brother, David. Wolfe’s daughter, Carol, however, brought an action,
claiming that the gift of the car to David was adeemed by its total destruction and that
she, as the residuary legatee under the will, was entitled to the insurance proceeds. Who
is entitled to the insurance proceeds?
Answer: Ademption and Abatement. Decision for David. Put as briefly as possible,
10. Grace Peterson, a never-married and childless woman, then aged seventy-four, asked
Chester Gustafson, a Minneapolis attorney, to draw a will for her. Gustafson, who had
also probated Peterson’s sister’s estate, drew this first will and six subsequent wills and
codicils free of charge because he claimed that she had no money to pay for his services.
Over the five-year period during which Gustafson redrew Peterson’s will, an increasing
amount of property was devised to Gustafson’s children, until, finally, the seventh will so
devised Peterson’s entire estate. Peterson, however, hardly knew the children except
from several chance encounters ten years before. She died, without ever having changed
the seventh will, and Gustafson, who was named as executor, now seeks to have the will
admitted to probate. Discuss whether the seventh will should be probated.
11. Rodney Sharp was a fifty-six-year-old dairy farmer whose education did not go beyond
the eighth grade. Upon the death of his wife of thirty-two years, Sharp developed a very
close relationship with Jean Kosmalski, a schoolteacher sixteen years his junior. Sharp
eventually proposed to Kosmalski, but when she refused, he continued to make gifts to
her in hope of changing her mind. He also gave her access to his bank account, from
which she withdrew substantial amounts of money; made a will naming her as sole
beneficiary; and executed a deed naming her as a joint owner of his farm. Then, in
September 2012, Sharp transferred his remaining joint interest in the farm to Kosmalski.
In February 2014, Kosmalski ordered Sharp to move out of his home and to vacate the
farm. She then took possession of both, leaving Sharp with assets of $300. Discuss
whether a constructive trust should be imposed on the property transferred to
Kosmalski.
Answer: Constructive Trust. Judgment for Sharp. A constructive trust may be imposed
when property has been acquired under such circumstances that the holder of the legal
12. By his last will and testament, Henry Nussbaum made a residual bequest and devise of
his estate to his niece, Jane Blair, as trustee, in trust for the education of his
grandchildren. If the trust could not be fulfilled, the residue was to revert to the plaintiff,
Dorothy Witmer. After Nussbaum died in 2002, the plaintiff contended that the trustee
had breached her fiduciary duty by failing to invest the trust corpus. A considerable
portion of the trust funds were held in a checking account from 2005 to 2014. The
trustee claimed that the will failed to specify when and what investments were to be
made and, hence, such matters were left to her good-faith discretion. She also explained
the large checking account balances by the fact that she thought she would need access
to the finds to pay for college in the near future. Decision
Answer: Duties of Trustee. Judgment for Witmers. It is a duty of the trustee to keep trust
funds properly invested. A trustee generally cannot excuse a failure to invest funds by
13. John Hobelsberger lived alone on his farm near Kranzburg, South Dakota. A
grandniece, Phyllis Raml, and her husband, Ralph, lived on and operated a farm about
two miles away. Hobelsberger and the Ramls had a friendly and cordial relationship.
The Ramls visited him rather frequently and largely cared for him during his later years.
Hobelsberger was hospitalized on October 23, and his condition was diagnosed as
intermittent cerebral insufficiency. During his hospitalization, he requested that the
Ramls send an attorney to see him about the preparation of a will. Thomas Green, an
attorney, interviewed the testator on or about November 10 and prepared a will in
compliance with his instructions.
Hobelsberger was transferred to a nursing home on November 19. On November 22, Green
and a secretary went to the nursing home and witnessed his signing of the will.
Hobelsberger was then eighty years old. He subscribed the will with a mark because he
was having trouble with his hands. Hobelsberger died on July 19 of the following year,,
survived by twenty-seven nieces and nephews and seven grandnieces and grandnephews.
The will, after providing for the payment of debts and funeral expenses, left
Hobelsberger’s entire estate to Phyllis Raml. Nine of the nieces and nephews contested
the will, claiming lack of testamentary capacity, undue influence by the Ramls, and
improper execution. The county court admitted the will to probate, the circuit court
affirmed, and the contestants appealed. Decision?
Answer: Conduct Invalidating a Will/Signature. Decree holding that the will is valid
affirmed. Clearly Hobelsberger was aged and infirm when he executed the will.
However, one may be physically weak and aged and still possess a sound mind. The
14. Mamie Henry, a widow, died leaving no children but she was survived by several nieces
and nephews. At first no will was found, and Joe Barksdale, a nephew, was appointed
administrator of Mrs. Henry’s estate. Later, Rita Pendergrass produced a copy of a will
allegedly made by Mrs. Henry. The will left all of Mrs. Henry’s property to Mrs.
Pendergrass and appointed her as executrix. When Mrs. Pendergrass sought to have the
will admitted to probate, Joe Barksdale and Olen Barksdale filed a contest on the
grounds that the purported will was never duly executed, or, if executed, was destroyed
by Mrs. Henry prior to her death. Should the will be probated? Explain.
15. George Washington Croom died testate. In his will Croom left various bequests of real
and personal property to his children and a grandchild. In Item Eight of his will Croom
stated “I leave nothing whatsoever to my daughter Kathryn Elizabeth Turner, and my
son Ernest Edward Croom.” At his death, Croom also left three optional share
certificates in Carolina Savings & Loan Association issued to George W. Croom or
Kimberly Joyce Croom, the deceased’s minor daughter. Each of these certificates had
attached to it an “Agreement Concerning Stock in Carolina Savings and Loan
Association” which purported to create a joint account with a right of survivorship. Two
of these agreements were signed by George Croom only and the third agreement was not
signed at all. None of these certificates were specifically devised by Croom’s will and the
will contained no residuary clause. Who is entitled to share in these assets?
Answer: Intestate Succession. Judgment for Kathryn and Ernest Croom. The optional
ANSWERS TO “TAKING SIDES” PROBLEMS
Upon George Welch’s death, he was survived by his third wife, Dorothy Welch, and his
daughter by his first marriage, Patricia Fisher. At the time George and Dorothy were
married, George was in very poor health and he relied on Dorothy to care for him.
George was suicidal and an alcoholic and suffered from severe depression. During the
eight months George and Dorothy were married, George became isolated from his family
and his health deteriorated. Prior to his death, George transferred the bulk of his assets
to Dorothy. Dorothy assisted in the transfer of George’s assets and often completed
checks and other papers for George’s signature. Although George and Dorothy had
executed a prenuptial agreement, during the month preceding his death George made a
new will that named Dorothy as his sole beneficiary. Patricia had been the sole
beneficiary of his prior will. Through the transfers of assets and the new will, Dorothy
received $570,000.
(a) What are the arguments that Patricia is entitled to the $570,000?
(b) What are the arguments that Dorothy is entitled to the $570,000?
(c) Who should prevail? Why?
ANSWER:
(a) Patricia will argue that a constructive trust should be imposed upon George’s assets.
She will contend that (1) Dorothy has abused her confidential position, unfairly
taking advantage of George and (2) Dorothy had unduly influenced George.
