Donations Spring 2002

I Overview

The law of donations deals with gratuitous dispositions.

There are two types of gratuitous donations:1) inter vivos2) mortis causa

Gratuitous – give something w/o expecting some type of return.Onerous – expect something back.Remunerative – paying back.

Donations manifest an expressed will of the donor to give to a certain donee.

Role of the law:1) Substantiating that the gift was in fact intended.2) protecting some basic policies of the state.

Two ways to accomplish these functions:1) rules as to form2) rules as to substance (substantial defects limit what can be given)

Form – La. Law requires specific requirements as to acceptable forms, if the specific form is present; it is fairly safe to assume that the donor consciously intended the gift.If the form isn’t proper then there is a procedural defect.

1) Donations inter vivos of immovables and incorporeals need a notarial act.Corporeal movables may be validly donated by manual gift accompanied by delivery of the object.

2) Donations mortis causa must be either olographic or notarial.

If the form is proper, assume intent for notarial wills. Testamentary intent – did the person mean for this to be a will.

II Methods of Disposition La. Code Articles 1467-1469, 1536-1540

Art 1467 Methods of acquiring or disposing gratuitouslyProperty can neither be acquired nor disposed of gratuitously, unless by donations

inter vivos or mortis causa, made in the forms hereafter established

Art 1468 Donation inter vivos, definitionA donation inter vivos (between living persons) is an act by which the donor

divests himself at present and irrevocably, of the thing given, in favor of the donee who accepts it.

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A donation inter vivos can be given with a condition – irrevocable because of the condition the donor has done everything needed.

Art 1469 Donation mortis causa, definitionA donation mortis causa (in prospect of death) is an act to take effect, when the

donor shall no longer exist, by which he disposes of the whole or a part of his property, and which is revocable.

Donation mortis causa is revocable as long as the donor is capable (capacity). The donation mortis causa must be a written testament & executed in proper form (olographic or notarial)

Who the gift is given to is also important.

If any part of the property is not disposed of, then the laws of intestacy apply.

There are restrictions on giving.

Succession of Sinnott Deceased gave “possession of stock” (stock is an incorporeal movable).

Looks like a mortis causa gift, but the form isn’t there.Need a will to show deceased meant to do this.Π contends it was a manual gift & a donation inter vivos, but a donation inter vivos requires divesture of ownership & the stock must be donated by authentic act b/c it is an incorporeal movable.Court – this is a donation mortis causa.Donation causa mortis is a gift made during life but takes effect at the donor’s death, which La does not recognize.This is a conditioned donation – idea that the stock given is a donation inter vivos subject to a suspensive condition (donor’s death) – irrevocable.Still have a form problem – this requires an authentic act, not just manual delivery.If the court followed the conditioned donation inter vivos, then the furniture and silver could be kept by the donee b/c of the manual gift of a corporeal movable.However, the donee admits deceased could change her mind & take these things back, thus this was not irrevocable.

MitchellAunt buys property and puts it in her nephew’s name. She lives on the property,

the nephew finds out the property is in his name and the court gives him the property.

There are other ways to get property w/o it being a donation inter vivos or mortis causa, example – life insurance proceeds (no form required).

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Sizeler v. SizelerUncle married niece in Rhode Island, both were La. Citizens and were domiciled in La. Sons from his first marriage want the $10,000 life insurance proceeds that were paid to the new wife. Sons argue that this is a donation inter vivos theory and old Art. 1481 applied (those living in open concubinage can’t make donations inter vivos to each other of immovables, this was repealed in the 1980’s b/c the law only applied to men and women living together)Court doesn’t care about the legality of the marriage.Rule of donations do not apply to life insurance K, which is sui generis (its own thing).

Proceeds go to the named beneficiary & not to the succession, and are not subject to the creditors of the estate.

Life insurance proceeds are not included in the calculation of the mass estate, nor in the descriptive list of assets, may be subject to federal estate tax if the decedent owned the policy.

Art 1505 Calculation of the disposable portion on the mass of succession(c) Neither the premiums paid for insurance on the life of the donor, nor the

proceeds paid pursuant to such coverage shall be included in the above calculation. Moreover, the value of such proceeds at the donor’s death payable to a forced heir, or for his benefit, shall be deemed applied and credited in satisfaction of his forced portion.

X dies with:$300,000 property$200,000 life ins proceeds paid to named beneficiary$ 50,000 gift given in the last three years$ 25,000 gift given in the last three years$ 25,000 gift given in the last three years

The mass estate is $400,000 (300,000 + 50,000 + 25,000 + 25,000)X has 3 forced heirs A, B, C, so ½ of the estate is forced. ½ * 400,000 = 200,000200,000/3 = 66,666 eachC got the $200,000 in life insurance proceedsHowever X left the children out of the will, and gave everything to a 3rd person.Who can challenge? A & B can challenge to get their forced portion.C is credited for the value of the insurance proceeds, which exceed the forced share.

Annuities are treated differently than insurance proceeds – must worry about the rights of the forced heirs – if legitime is impinged, forced heirs can challenge & add the value to the calculation of the mass estate.

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La. R.S. 22:647The lawful beneficiary, assignee, or payee, including the annuitant’s estate, of an annuity contract, heretofore or hereafter effected, shall be entitled to the proceeds and avails of the contract against the creditors and representatives of the annuitant or the person effecting the contract, or the estate of either, and against the heirs and legatees of either such person, saving the rights of the forced heirs, and such proceeds and avails shall also be exempt from all liability for any debt of such beneficiary, payee, or assignee or estate, existing at the time the proceeds or avails are made available for his own use.

An annuity contract shall include any contract which1. is issued by a life insurance company licensed to provide the K in the state in which it was issued at the time of issue;2. states on its face or anywhere in the terms of the K that it is an annuity;3. provides the K owner the ability to defer US income taxes on any

interest earned and not distributed to the owner;4. transfers some risk of financial loss to the insurance company for

financial consideration;5. was approved as an annuity K by the Dept. of Ins.

TL James & Co, Inc v. MontgomeryAnnuity case – involves a pension planCourt figured out how long each marriage was.Pension plan just wants to pay named beneficiary, but after the payment to the second wife (surviving widow) the kids and the first wife must be taken care of due to forced heirship and community property laws.

Community property laws & forced heirship laws are important to the state. Use fed law to pay named beneficiary, then use state laws to figure out if there is any substantive interest to be used against the beneficiary.

Boggs v. BoggsDoes fed law preempt state law? Trl crt and dist crt says yes, but still must meet state law. La. Sup. Court – no, state law does not need to be met because ERISA pre-empts the state law.1st marriage ends with wife’s death (26 year marriage 3 kids). Husband had a pension plan (deferred income) that was community property. Wife’s will left 2/3 of her estate to her son’s (should have included her ½ interest in the pension plan).Second wife is the named beneficiary.Pension plan is covered by ERISA; kids didn’t meet exceptions to challenge payment to the second wife.Kids say pay her, but still need to divvy up interests between the first and second wife so it becomes the kids interest. La. Sup Court holding - to do this would defeat the purpose of the pre-emption.

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Succession of DurabbIRA proceeds left to wife, wife gives daughter power of attorney & the daughter names herself beneficiary of the IRA proceeds. Court uses La CC 1505(D) – don’t put IRA proceeds in the mass estate, but because the proceeds were paid to a forced heir, the heir’s portion is reduced.

US Savings Bonds

Winsberg v. WinsbergΠ wife of decedent, Δ decedent’s brotherPrior to marriage husband bought savings bonds and designated brother as payee on decedent’s death: this is a beneficiary bond.Husband died a few months after marriage, child born posthumously. The child was conceived during the marriage and was subsequently born alive.Π is the administrator of the estate & sues for the bonds or the cash value.Π’s theories – a will written before the birth of a legitimate child is null. The bond is paid at death to the Δ, so the Π argues this is a donation mortis causa & needs to be in the proper form. If this is like a will then donation is null because of the child.Beneficiary bond is like a donation mortis causa because it is payable after death and taxed as part of the estate.Court – don’t need proper form because of federal law, which provides an additional method of disposing of property by donation mortis causa. La law will recognize the donation, but it is still subject to collation.Δ gets paid on the bond, but the child may have a claim under 1705. Court nullified donation under the old laws. (Art. 1705)Can’t get more substantive rights under federal K law, than under state laws.Federal K will still pay the beneficiary, but if there is an interest in state law, then apply state law

History of 1705 – originally nullified the whole will if a legitimate child was born after the will was written. Later don’t nullify entire will if children are taken care of in some way (insurance proceeds)Now a posthumous child will get the forced portion and nothing else.

Federal gov’t wants to be able to pay someone.Can transfer bonds but you can’t nullify La laws on successions and inheritance.Look to fed gov’t rules for form of transfer, but look to La law for substance.

Free v. BlandInvolves co-owner bonds, and is a Texas caseHusband used community funds to purchase bonds in the name of Mr. or Mrs. – either can cash bonds and their interest in the bonds is immediate.Mrs. dies first, and Mr. claims full ownership of the bonds.Trl Crt – Mr. must recognize son’s interest in the bonds because Mrs. had a ½ interest in the community property. Bond was bought with community funds and not all of the

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proceeds should go to the Mr. Son needed to be reimbursed because community funds were used. US Supreme Court – overrules, state law is immaterial because these were co-owner bonds & are used to be able to get the money quickly & have flexibility. Co-owner has the right to get the full value.Community property laws do not apply to co-owner bonds & Mr. keeps the full value.The court did not find any fraud.

Yiatchos v. YiatchosMr. bought beneficiary bonds with community funds and named his brother as the payee on death.Wash Sup Court – husband committed fraud because he endeavored to divest wife of any interest in her own property. Husband has a fiduciary duty to manage the funds.Don’t use federal to allow someone to commit constructive fraud. Under state law look at wife’s property rights & if deprived of her rights, apply state law to protect the wife.Wife had a vested interest, but if there was other property that would satisfy her interest, then maybe the bonds won’t need to go to her.

Succession of GuerreDeceased had $50,000 worth of bonds he co-owned. Executor wants to include value of the bonds in the mass estate: this would increase the legitime. Deceased’s will left the daughters the legitime allowed by law.Without including the bonds the mass estate was worth $8,941.35, with bonds the mass estate was worth $52,507.95. Daughters want to treat the bonds as gifts & to protect their interest, which is the legitime.The daughters’ rights vested when their father died. Deceased can’t use fed law to disinherit forced heirsThe co-owners have the right to immediate possession.The value of the bonds are not added to the descriptive list, but are added to the mass estate like a donation inter vivos.

Co-owner bonds – donation inter vivosBeneficiary bonds – donation mortis causa Ridgway v RidgwayDivorce decree – dad had to keep life insurance with children as beneficiaries – this was the judgment of a state court.He remarried and named his new wife as the beneficiary. She claims the proceeds and the court agreed with her because the children were not vested in their right to the life insurance proceeds.

Osterland v. GatesDecedent bought bonds naming 1 daughter as co-owner, value $56,000Other daughter was a co-owner of a bond worth $25,000.Did deceased defy rules of collation?

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Does putting daughters as co-owner of different amount show the deceased’s intention to treat daughters differently?Because of federal law each daughter gets the value of co-owned bonds, but if the legitime is impinged, then collation may be required under state law.

Succession of WeissDeceased left olographic will, which left Beebe $5000 and everything else to the decedent’s niece.Decedent purchased 3 co-owner bonds. The co-owner was Beebe. These bonds were worth $3000 in total. The niece (executrix) gave the bonds and $2000 to Beebe to meet the $5000 gift. Niece listed the bonds as part of the estate.Issue: should Beebe get $5000 and the bonds? YESCo-owner bonds gave Beebe an immediate interest & at the death of the other co-owner Beebe got full ownership.This is like a donation inter vivos and is not part of the estate.If there had been a forced heir, then you must ask when the gift occurred, if w/in 3 years of death, add to the 1505 calculation of the mass estate.

Beneficiary bonds – donation mortis causa & put in the descriptive listCo-owner bonds – donation inter vivos, not in the descriptive list.

Problems from Chapter 10

Pg 10-9Problem 2 – Husband and wife are in a car accident resulting from husband’s negligence. The wife died first and had a life insurance policy naming the husband as beneficiary. The proceeds are paid to the husband’s estate (this is the only asset of his estate). The wife’s kids from her previous marriage may not attach the proceeds in their suit against the estate. Succession of Romero.

Problem 3 - decedent’s life insurance policy was payable to his estate, and his will stated that he wanted his “just debts” paid. Creditors cannot seize the insurance proceeds unless the will would be more specific.

Add in problems from pg 10-36

III Capacity La CC 1470 – 1483

Capacity to give; receive; and exceptions

Art 1470 Persons capable of giving or receivingAll persons have capacity to make and receive donations inter vivos and mortis causa, except as expressly provided by law.

This presumes all persons are capable of giving and receiving donations.

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Old law spoke of things that couldn’t be done, other restrictions were relative, could give some things to some people, but not to others (illeg. child, concubine). This is not the rule anymore.

Art 1471 Capacity to give, time for existenceCapacity to donate inter vivos must exist at the time the donor makes the donation. Capacity to donate mortis causa must exist at the time the testator executes the testament.

Art 1472 Capacity to receive, time for existenceCapacity to receive a donation inter vivos must exist at the time the donee accepts the donation. Capacity to receive a donation mortis causa must exist at the time of death of the testator.

Art 1473 Capacity to receive conditional donation, time for existenceWhen a donation depends on the fulfillment of a suspensive condition, the donee must have capacity to receive at the time the condition is fulfilled.

Milne’s Heirs v. Milne’s Executor’sWill of the deceased left money to establish 2 orphanages. These orphanages were not in existence at the time the succession was opened.Heirs’ are the plaintiffs and they argue donation is null because there is a lack of capacity to receive because the orphanages weren’t in existence at the time the succession was opened.Court – money goes to set up the institutions under the theory of conditional donation and the state fulfilled the condition by incorporating these institutions to benefit orphans.Court relied on Art 1473 and the fact that this was for the public good.

Art 1474 Unborn children, capacity to receiveTo be capable of receiving by donation inter vivos, an unborn child must be in utero at the time the donation is made. To be capable of receiving by donation mortis causa, an unborn child must be in utero at the time of the death of the testator. In either case, the donation has effect only if the child is born alive.

Art 940 Existence of unborn child (In the laws of intestate successions)An unborn child conceived at the death of the decedent and thereafter born alive shall be considered to exist at the death of the decedent

Fertilized frozen embryo could take part in intestate succession.

These two articles are inconsistent, can’t take part in a donation mortis causa if a frozen embryo because of the in utero requirement.

La. RS 9:391.1 Child conceived after the death of the fatherAllows child conceived after the death of a parent to be a legitimate child of the

decedent, if the decedent expressly authorized his surviving spouse to use his gametes.

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The child must be conceived by using the decedent’s gametes and must be born within 2 years of the decedent’s death.

Heirs and legatees, whose interest in the decedent’s succession will be reduced by the birth of the child, shall have one year from the birth of the child to bring an action to disavow paternity.

Art 1475 Nullity of donation to person incapable of receiving A donation in favor of a person who is incapable of receiving is null.

Carr v. HartDecedent wanted to make sure that her cemetery plot was maintained. No forced heir because her son predeceased her.Olographic will left money to cemetery fund.Decedent’s sister was her intestate heir; the sister attacks the will. If the money doesn’t go to the cemetery fund, then the money goes to her.Sister’s argument is based on capacity to receive because fund didn’t exist at the time the succession was opened. Therefore, the sister should get the money.Court gave the sister the money due to a lack of a recipient to take. (Art 1475).Estate should have argued Art 1473 and that his was a conditional donation as supported by Milne.

Fink v. Fink’s ExecutorsLegacy was to “be applied to the erection and maintenance and support of a suitable asylum in this city to be used solely as an asylum for Protestant widows and orphans.Court upheld the legacy because there were identifiable recipients, the widows and orphans. This was not a condition that needed to be fulfilled.Court didn’t answer the question of what happens as the recipients die. City of New Orleans V. HardieWill left $5,000 to support asylums of the protestant religion and devoted to the care of aged persons.The city wants the money, argues no asylum exists, but we can use the money.A German protestant home wants the money because the home took care of widows and kids.The court didn’t uphold the legacy because there was no asylum of the type specified and the asylum was to be the recipient.

If you want to give something like this and the entity doesn’t exist, what do you do? Create a trust, set up the entity.

La RS 9:2271 Any person may make a donation inter vivos or donation mortis causa to a trustee for the benefit of an educational institute in existence or to be set up.

Art 1477 Minors; incapacity to make donations, exceptionsA minor under the age of 16 does not have the capacity to make a donation either inter vivos or mortis causa, except on favor of his spouse or children.

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A minor who is 16 has the capacity to make a donation, but only mortis causa. He may make a donation inter vivos in favor of his spouse or children.

Art 1477 Capacity to donate, mental condition of donorTo have capacity to make a donation inter vivos or mortis causa, a person must also be able to comprehend generally the nature and consequences of the disposition that he is making.

The old rule used to be that “to make a donation inter vivos or mortis causa one must be of sound mind.” This was a strong presumption, but was rebuttable by showing a pattern of habitual insanity. Then the person who wanted to show capacity had burden to prove that the donation was made when the donor knew what he was doing & done during a lucid interval. Very hard to prove someone was of unsound mind.

Under Art 1477 the test is to comprehend generally the nature and consequences of the disposition. This comes from common law. Under the common law the donor must understand the nature and extent of his property & relationships with the natural objects of his bounty (this is hard to define). La. rejected the natural object of the bounty, but kept understanding the nature of the disposition (know you are disposing of property & giving it to someone else) and the consequences (know you can’t get the property back and you are giving it away for free).

Succession of LyonsPre-revision caseLyons had cancer. He was admitted to the hospital on Dec 11, 1981. The will was written on Dec 14, 1951 while he was still hospitalized. He died in Feb. 1982.Lyons had never married and had no children.In a prior will written in 1976 he left everything to his brother.In the Dec 1981 will he left everything to his nephew.The brother challenged the will, claimed there was a lack of capacity & lack of sound mind.Presume sound mind. To overcome this presumption you need clear and convincing evidence of incapacity due to unsound mind.Court used test of whether or not the testator understood the nature of the testamentary act and appreciated its effect.

Succession of HammiterHammiter was a former chief justice of the La Supreme CourtBorn 1899. He broke hip 1972. Wife and brother die in 1981. He also suffered from a restricted blood flow to the brain and was dependent on sitters and housekeepers.The June 2, 1981 will left certain property to his nieces, wife’s relatives, and housekeeper. The remainder went to the Boy Scouts.The Dec 1981 will – everything else was set up in a foundation to support the Boy Scouts.

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Hammiter met Roxanne Cox through his wife’s sister in 1983. Cox became his sitter in 1984, and she claims she was also paid to take care of his finances.His nieces filed to have him interdicted in May 1984. This was done in order to review checks.May 31, 1984 – a new will is written and he gives property to his secretary, left the home to his wife’s sister, the Boy Scouts get $100,000 in trust, and Cox gets everything else.May 1985 – a new will is written, leaves some property to others, Cox gets everything else. Left the Boy Scouts out.Jan 1986 – Hammiter commits suicide.The nieces challenge the will and they want to show that Cox unduly influenced their uncle. This type of challenge wasn’t recognized at this time, so Court said show enough influence so that capacity was affected.Court – Cox’s credibility is zero. Duress is not enough unless present at the making of the will & the person’s capacity is affected, and the testator was susceptible to undue influence.

Art 1478 Nullity of donation procured by fraud or duressA donation inter vivos or mortis causa shall be declared null upon proof that it is the product of fraud or duress.

This article is the result of changes to the forced heirship laws.

Art 1479 Nullity of donation procured through undue influenceA donation inter vivos or mortis causa shall be declared null upon proof that it is the product of influence by the donee or another person that so impaired the volition of the donor as to substitute the volition of the donee or other person for the volition of the donor.

You don’t get the same result under capacity or undue influence arguments.If there is a lack of capacity the entire will is thrown out. If another will exists it will be used, if no other will exists, then use the laws of intestacy.If there is undue influence the specific legacy is thrown out.

Art 1480 Nullity due to fraud, duress, or undue influence; severability of valid provisionWhen a donation inter vivos or mortis causa is declared null because of undue influence or because of fraud or duress, it is not necessary that the entire act of donation or testament be nullified. If any provision contained in it is not the product of such means, that provision shall be given effect, unless it is otherwise invalid.

Only get rid of the tainted provision, but if in doubt uphold provision because you presume that it is what the donor wanted.

Art 1481 Fiduciary appointment, terminationAny person who, whether alone or with others, commits fraud or exercises duress or unduly influences a donor within the meaning of the preceding Articles or

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whose appointment is procured by such means, shall not be permitted to serve or continue to serve as an executor, trustee, attorney or other fiduciary pursuant to a designation as such in the act of donation or the testament or any amendments or codicils thereto.

Art 1482 Proof of incapacity to donate

A person who challenges the capacity of a donor must prove by clear and convincing evidence that the donor lacked capacity at the time the donation inter vivos or executed the testament. However, if the donor made the donation or executed the testament at a time when he was judicially declared to be mentally infirm, then the proponent of the challenged donation or testament must prove the capacity of the donor by clear and convincing evidence.

Challenger has the burden of proof & must be by clear and convincing evidence.If the donor was mentally infirm (interdicted), then the donee must prove capacity of the donor (need judicial declaration of capacity), this is also by clear and convincing evidence.

Art 1483 Proof of fraud, duress or undue influenceA person who challenges a donation because of fraud, duress or undue influence must prove it by clear and convincing evidence. However, if, at the time the donation was made or the testament executed, a relationship of confidence existed between the donor and the wrongdoer and the wrongdoer was not then related to the donor by affinity, consanguinity or adoption, the person who challenges the donation need only prove the fraud, duress, or undue influence by a preponderance of the evidence.

When challenging for fraud, duress or undue influence the standard of proof is clear and convincing evidence, unless the alleged wrongdoer is in a position of trust & not a family member, which would require proof by a preponderance of the evidence. Think priest, doctor, lawyer, nurse, accountant, these people should act better than anyone else and not take advantage of their position.Under the old code, doctors in attendance during sickness can’t get donations, unless remunerative or the doctor was a family member.

Succession of ColeSon challenges the will on two fronts:

1. undue influence (son has burden of proof)2. capacity is lacking (donee has burden of proof)

Cole was a WWII vet, the court had declared him mentally incompetent in 1970 (interdicted while hospitalized at the VA). He was placed in his brother’s care. Interdiction shifts the burden of proof. The will was written at a party in the presence of many witnesses. The will gave the son the house in Abbeville, and everything else to the sister-in-law that took care of the testator. This was in 1990.Cole died on 1991, and at this time the son was still a forced heir.

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The will was executed enacted prior to enactment of new legislation.Court uses the law in effect at the time of the death; this should raise the question that the law to be used is the law in effect when the will was written.Son argues undue influence. Donee was in a position of taking care of Cole and interdiction is relevant to undue influence. Because of what is entrusted to the custodian & interdiction, the burden is shifted to the donee to prove capacity by clear and convincing evidence.Interdiction effects capacity.Art 1483 – if there is a relationship of confidence, but not related, between the donor and the wrongdoer, then the burden is lowered to preponderance of the evidence.At the time of writing the will the donor must generally understand what he has and that he is giving it away.Court says the donee has met her burden, and the son didn’t meet his burden of proving undue influence by clear and convincing evidence.

Robertson v. CubineGranddaughter is the curatrix of the donor (her grandmother); she wants to throw out the donation inter vivos that was made prior to the donor’s interdiction.In 1992, the donor made a donation to her husband of 30 years. She made her separate property into community property, and gave her husband a surviving spouse usufruct along with legal interest in the property.In Feb 1996 the donor’s husband dies.In April 1996 the donor was interdicted because of Alzheimer’s.Sept. 1996 – granddaughter files a petition to set aside the donation, she argues there was no capacity to donate and her burden of proof is by clear and convincing evidence.What shows incapacity? Grandmother was unkempt, withdrawn, confused. Dr. testifies that he examined donor 3 months after the donation.What shows capacity? The donor could follow soap operas, went on a vacation, knew whom she liked, and what she was doing and she was not interdicted at the time of the gift.Courts found that there wasn’t enough proof to show incapacity.

Succession of HorrellWill gets thrown out.The wife and kids challenge on capacity – did donor understand nature of the act and its effect?Doctor testifies that the donor was incompetent.Facts: at the age of 84, donor wrote a will 3 months before his death. The provisions of the will showed he didn’t know what he was doing because the house in Miss. was owned with his wife with the right of survivorship (gives surviving spouse full ownership) and the will gave the wife usufruct and the kid’s naked ownership. Also the act of donation of the Covington property came before the will & he couldn’t dispose of this property again in a will.Son who got everything in the will was a lawyer.Court found a lack of capacity and the will gets thrown out.

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Succession of DeshotelsDecedent was 84 at the time of her death. Two daughters, one biological, the other adopted, survived her.The will gave everything to the biological daughter.The adopted daughter challenged the will. She argued undue influence and lack of capacity.Neither daughter was a forced heir.Challenger brings in a doctor who testified in a deposition that the mother had Alzheimer’s. The court refused to use the deposition because it was filed too late.Attorney who prepared the will knew the family and knew decedent wanted to favor one daughter because of several conversations he had with the decedent.Court wasn’t convinced that there was a lack of capacity. Decedent made a statement that she knew the adopted daughter wasn’t going to be happy about the will.Undue influence is not mere advice or assistance.The favored daughter was the one taking care of the mother.

Succession of BrantleyNiece challenges aunt’s will, claims a lack of capacity. Aunt had been interdicted, but the interdiction was revoked because the aunt set up a trust.Interdiction shows a mental incapacity and then shifts the burden to the donee to show capacity by clear and convincing evidence.Donee – aunt wasn’t interdicted therefore they don’t have the burden to prove capacity.The court agrees with the donee.

Art 395 Capacity to make juridical actsA full interdict lacks the capacity to make a juridical act, except as otherwise provided by law. A limited interdict retains the capacity to make a juridical act, except as otherwise provided by law or the judgment of limited interdiction. A judgment of interdiction does not remove the capacity of the interdict to make or revoke a disposition mortis causa, except as otherwise provided by law, but it does remove the capacity of the interdict to make a donation inter vivos.

Succession of ReevesUndue influence claimDeceased heirs’ claim the second wife unduly influenced him.The second wife had been a friend of the deceased’s daughter.She was 22 years younger than the deceased.This is a relationship of confidence, and related by affinity, so the burden of proof is by clear and convincing evidence.Decedent and surviving spouse were married 11 years.Decedent had 10 kids from his first marriage.The will left ½ of the estate to his wife, including a usufruct over the children’s interest. The remaining ½ went to 9 of the 10 kids.The excluded son brought this suit and alleged he was excluded because of the second wife’s undue influence.

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At the time of this case La did not recognize undue influence, so the court used a common law analysis. Ask was there an opportunity for influence.The trial court based it’s decision on psychiatric testimony - the decedent was dependent on his wife, thus the trial court found undue influence.The court of appeal had to look for manifest error or error at law.This court said Art 1483 wasn’t intended to be used against a surviving spouse. Spouses should be susceptible to each other. Only use 1483 against a surviving spouse in some circumstances – physical abuse, emotional abuse, fraud, deceit, or criminal conduct.Case never went to the Supreme Court of La. so argue that the legislature intended to apply Art 1483 against a surviving spouse.

IV The disposable portion, the legitime and reduction, La CC 1493 – 1514

History of forced heirship Goes back to Roman Law – idea that family members owe a duty to

preserve the family estate (concept of reserve – reserve some property to keep in the family).

Legitime developed from Roman Law & Customary Law, it was meant to supplement the reserve.

La. in 1808 adopted the Spanish law on legitime. La Code of 1825 – graduated disposable portion was from the French law.

Both kids and parents could be forced heirs because of both the idea of dependency and keeping the property in the family.

La Code of 1870 – still had forced heirship. La Constitution of 1921 – constitutional provision protecting forced

heirship was enacted. Late 1970’s early 1980’s – rights of illegitimate children come into being. 1981 – changes to law of forced heirship, controversial. Parents were

removed as forced heirs. 1974 – Constitution gave legislatures the right to determine who forced

heirs are. 1981 – forced portion was reduced, 1 child ¼, 2 or more ½ 1981 – Pension assets became very important & were not included in the

calculation of the mass estate, but payments of benefits to a forced heir shall be deemed applied and credited in satisfaction of his forced share.

Donations to spouse of previous marriage didn’t need to be included in the calculation of the mass estate.

1981 – the concept of revindication was removed. donor→donee→third party bought property from doneeDonor dies and there is not enough to pay off forced heirs. Under revindication the donee needs to make up the shortfall caused by the gift. But donee no longer has the property or the money to do this, so the heirs could go after the third party and get the property back in order to satisfy the forced portion. This was the reason for donations in disguise

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1981 – 916 usufruct was extended, now not only for life and over separate property, it was also over the property of the non-issue of the marriage.

Changes in disinhersion – kids who didn’t communicate with the parent(s) for 2 years without a good excuse could be disinherited. The burden of proof was changed; kid had the burden to prove he didn’t deserve to be disinherited.

1984 & 1985 – attempts to abolish forced heirship, because bills couldn’t get out of committee forced heirship was redefined, no need for constitutional amendment, just needed a majority vote of the legislature to become law.

Constitutional amendment needs 2/3 votes of the people to pass. 1989 – Act 788 – idea of redefining forced heirs- kids under 23 (now 24),

interdicted or subject to interdiction. Act 147 of 1990 – passed to make sure changes worked with other parts of the

law. Lauga case – 1993 – had forced heirship been abolished by redefinition? Was

new law discriminatory based on age or was it an abolition of forced heirship. Lauga found the legislation of 1989 & 1990 to be unconstitutional because it was an abolition of forced heirship. First, purported to deprive each child of his individual right as a child to an equal share of a forced portion of his decedent’s estate. Second, it purported to abrogate the core principle of equality of heirship in the legitime among the children of a family. Third, it abolished or rendered wholly ineffective the legal institution of forced heirship to serve the purposes intended by the constitutional limitation upon legislative power.

Who the legislature defines as a forced heir:

Art 1493 Forced heirs; representation of forced heirsA. Forced heirs are descendants of the first degree, who at the time of the death

of the decedent, are 23 or younger or descendants of the first degree of any age who, because of mental incapacity or physical infirmity, are permanently incapable of taking care of their persons or administering their estates at the time of the death of the decedent.

B. When a descendant of the first degree predeceases the decedent, representation takes place for purposes of forced heirship only if the descendant of the first degree would have been 23 or younger at the time of the decedent’s death.

C. However, when a descendant of the first degree predeceases the decedent, representation takes place in favor of any child of the descendant of the first degree, if the child of the descendant of the first degree, because of mental or physical infirmity, is permanently incapable of taking care if his or her person or administering his or her estate at the time of the decedent’s death, regardless of the age of the descendant of the first degree at the time of the decedent’s death.

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Hypo:

X³ / / \ \ A¹ B C² D | / \ E F G Aged 3 Aged 10 and disabled Aged 1 A would have been 22 at the time of X’s death so E is a forced heirC would have been 28 at the time of X’s death so F is not a forced heir, but because G is disabled, G is a forced heir.

The disability must exist at the time of the testator’s death.The reason to include kids with disabilities is to provide them with a means of support.

Problem – constitutional amendment does not say anything about representation. Representation puts you in the shoes of your ascendant.

Succession of MartinezSon was mildly mentally retarded and had problems with financial responsibility.The court found no relief for the son because the court relied on a comment about a child being severely handicapped in order to qualify as a forced heir, this added more than what was required by the code. This comment was removed after this case.

Art 1494 Forced heir entitled to legitime; exceptionA forced heir may not be deprived of the portion of the decedent’s estate reserved to him by law, called the legitime, unless the decedent has just cause to disinherit him.

Art 1495 Amount of forced portion and disposable portionDonations inter vivos and mortis causa may not exceed ¾ of the property of the donor if he leaves, at his death, one forced heir, and ½ if he leaves, at his death, two or more forced heirs. The portion reserved for the forced heirs is called the forced portion and the remainder is called the disposable portion

Nevertheless, if the fraction that would otherwise be used to calculate the legitime is greater than the fraction of the decedent’s estate to which the forced heir would succeed by intestacy, then the legitime shall be calculated by using the fraction of an intestate successor.

1 Forced heir – the forced portion is ¼ and the disposable portion is ¾2 or more forced heirs – the forced portion is ½ and the disposable is ½

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X / / | \ \ A B C D E23 24 25 26 27

X’s estate is worth $20,000 Debts are 30,000 Value 0Gift given in last 3 years 50,000 Mass estate is valued at $50,000 because of giftsA is the only forced heir, he doesn’t get ¼ as a forced portion, gets 1/5 as a forced portion because the intestate portion is less.But 1/5 of what? 1/5 of $50,000 or $10,000 because A has the right to ask for the gift to come back.

X dies leaving: Assets 50,000

Debt 40,000 Estate 10,000

X dies intestate with 5 children; only one is a forced heir. All kids will each get $2,000 or 1/5 of $10,000, but if a gift was made within the last 3 years prior the decedent’s death, then the forced heir can add the value of the gift back in to the mass calculation and get 1/5 of the value of the gift.

Same facts as above but now the assets and debts are changed.Assets $50,000Debts 45,000 Estate 5,000Gift 20,000Mass Estate 25,000

The forced heir gets 1/5 of the mass estate or 5,000. The other heirs get nothing. Heirs are no longer treated equally.

X² | A¹/ \

B C

A predeceased X. Both B and C are disabled.B and C are both forced heirs of X and A’s age at the time of X’s death is immaterial,

What is the forced portion? Do they get ½ or ¼? We don’t really know the answer because they come in by representation could argue that the forced portion is ¼ because of standing in A’s shoes.

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X²/ | \

A¹ B C / \ E F E is disabled and is therefore a forced heir of X and represents A. Because of representation use the amount for their ascendant.

X¹ / | \ A B C A, B, C are all forced heirs. If intestate each will get 1/3, if testate each will get 1/6 (1/3 of ½).

If intestate, age or disability of the descendants doesn’t matter. Not concerned about the forced portion.

Art 1505 calculation of the disposable portion on the mass of successionMust know what the decedent possessed & the value at the time of death. To this add the donations inter vivos made within the last 3 years of donor’s death and valued at the time of donation. Take out debts before adding in donations inter vivos.

Value property at the time of death, value gifts given at the time of the donation.

Assets less debts plus gifts = mass estateIf debts are more than assets, net estate value is zero. Creditors are out & can’t go after gifts. Only forced heirs can go after gifts.

Do not use insurance proceeds or premiums in the calculation, but proceeds paid to a forced heir are credited to that heirs forced portion.

Spousal usufruct can be over the forced portion, but it cannot impinge on the legitime.Art 890 – intestate usufructArt 1499 – how much can be given (testate)Art 1514 – security for usufruct

Art 1496 Permissible burdens on the legitimeNo charges, conditions, or burdens may be imposed on the legitime except those expressly authorized by law, such as a usufruct in favor of a surviving spouse or the placing of the legitime in trust.

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Art 1497 Disposable portion in absence of forced heirsIf there is no forced heir, donations inter vivos and mortis causa may be made to the whole amount of the property of the donor, saving the reservation made hereafter.

Art 1498 Nullity of donation inter vivos of entire patrimonyThe donation inter vivos shall in no case divest the donor of all of his property; he must reserve to himself enough for subsistence. If he does not do so, a donation of a movable is null for the whole, and a donation of an immovable is null for the whole unless the donee has alienated the immovable by onerous title, in which case the donation of such immovable shall not be declared null on the ground that the donor did not reserve to himself enough for his subsistence, but the donee is bound to return the value that the immovable had at the time the donee received it. If the donee has created a real right by onerous title in the immovable given to him, or such right has been created by operation of law since the donee received the immovable, the donation is null for the whole and the donor may claim the immovable in the hands of the done, but the property remains subject to the real right that has been created. In such a case, the donee and his successors by gratuitous title are accountable for the resulting diminution of the value of the property.

Art 1499 Usufruct to surviving spouse The decedent may grant a usufruct to the surviving spouse over all or part of his property, including the forced portion, and may grant the usufructuary the power to dispose of nonconsummables as provided in the law of usufruct. The usufruct shall be for life unless expressly designated for a shorter period. A usufruct over the legitime in favor of the surviving spouse is a permissible burden that does not impinge upon the legitime, whether it affects community property or separate property, whether it is for life or a shorter period, whether or not the forced heir is a descendant of the surviving spouse, and whether or not the usufructuary has the power to dispose of noncomsummables.

Art 1500 Forced portion in cases of judicial divestment, disinhersion, or renunciation of succession rightsWhen a forced heir renounces his legitime, is declared unworthy, or is disinherited, his legitime becomes disposable and the forced portion is reduced accordingly. The legitime of each remaining forced heir is not affected.

Allows more to be given away – benefits the person getting the disposable portion.

Art 1502 Inability to satisfy legitime by usufruct or income interest in trust onlyNevertheless, the legitime may not be satisfied in whole or in part by a usufruct or an income in trust. When a forced heir is both income and principal beneficiary of the same interest in trust, however, that interest shall be deemed a full

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ownership interest for purposes of satisfying the legitime if the trust conforms to the provisions of the La Trust Code governing the legitime in trust.

When trying to satisfy the legitime, it must be satisfied by something that can be carried down the line, this is why a usufruct or income interest won’t satisfy the legitime. Art 1503 Reduction of excessive donations

A donation inter vivos or mortis causa, that impinges on the legitime of a forced heir is not null but is merely reducible to the extent necessary to eliminate the impingement.

Art 1504 Reduction of donations, exclusive right of the forced heirsAn action to reduce excessive donations may be brought only after the death of the donor, and then only by a forced heir, or an assignee of any of them who has an express conventional assignment, made after the death of the decedent, of the right to bring the action.

A creditor does not have the right to assert an action to reduce, unless the creditor has an express conventional assignment.Art 1505 Calculation of disposable portion on mass of succession

A. To determine the reduction to which the donations, either inter vivos or mortis causa are subject, an aggregate is formed of all property belonging to the donor or testator at the time of his death; to that is ficticously added the property disposed of by donation inter vivos within 3 years of the date of the donor’s death, according to its value at the time of donation.

B. The sums due by the estate are deducted from this aggregate amount, and the disposable quantum is calculated on the balance, taking into consideration the number of forced heirs.

C. Neither the premiums paid for insurance on the life of the donor nor the proceeds paid pursuant to such coverage shall be included in the above calculation. Moreover, the value of such proceeds at the donor’s death payable to a forced heir, or for his benefit, shall be deemed applied and credited in satisfaction of his forced share.

D. Employer and employee contributions under any plan of deferred compensation adopted by any public or governmental employer or plan qualified under § 401 or § 408 of the Internal Revenue Code, and any benefits payable by reason of death, disability, retirement, or termination of employment under any of such plans, shall not be included in the above calculation, nor shall any such contributions or benefits be subject to the claims of forced heirs. However, the value of such benefits payable to a forced heir, or for the benefit of a forced heir, shall be deemed applied and credited in satisfaction of his forced share.

Art 1507 Reduction of legacies before donations inter vivos, order of reduction

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Donations inters vivos may not be reduced until all of the property comprised in donations mortis causa is exhausted. The testament that a legacy shall be paid in preference to others, in which case the preferred legacy shall not be reduced until the other legacies are exhausted.

Art 1508 Reduction of donations inter vivosWhen the property of the estate is not sufficient to satisfy the forced portion, a forced heir may recover the amount needed to satisfy his legitime from the donees of inter vivos donations made within 3 years of the date of the decedent’s death, beginning with the most recent donation and proceeding successively to the most remote.

Art 1509 Insolvency of doneeWhen a donee from whom recovery is due is insolvent, the forced heir may claim his legitime from the donee of the next preceding donation and so on to the donee of the most remote donation. A donee who pays the share of an insolvent donee is subrogated to the rights of the forced heir against the insolvent donee.

Art 1510 Remunerative donations, extent of reductionThe value of a remunerative donation is not included in the calculation of the forced portion, and the donation may not be reduced, unless the value of the remunerated services is less than 2/3 the value of the property donated at the time of the donation, in which event the gratuitous portion is included in the calculation and is subject to reduction.

Art 1511 Onerous donation, extent of reductionThe value of an onerous donation is not included in the calculation of the forced portion, and the donation may not be reduced, unless the value of the charges is less than 2/3 the value of the property donated at the time of the donation, in which event the gratuitous portion is included in the calculation and is subject to reduction.

Add in the gratuitous portion of onerous and remunerative donations. The value of the gift must exceed by ½ the value of the services.

Art 1512 Retention of fruits and products of donation by donee until demand for reduction

The fruits and products of property donated inter vivos belong to the donee except for those that accrue after written demand for reduction is made on him.

Art 1513 Reduction in kind when property is owned by the donee or successors by gratuitous title; effects of alienation by donee

The action for reduction of excessive donations may be brought only against the donee or his successors by gratuitous title in accordance with the order of their donations, beginning with the most recent donation. When the donated property is still owned by the donee or the successors, reduction takes place in kind or by

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contribution to the payment of the legitime, at the election of the donee or the successors, who are accountable for any diminution in the value of the property attributable to their fault or neglect and for any charges or encumbrances imposed upon the property after the donation.When the property given is no longer owned by the donee or his successors by gratuitous title, the donee and his successors must contribute to the payment of the legitime. A donee or his successor who contribute to payment of the legitime is required to do so only to the extent of the value of the donated property at the time the donee received it.

Art 1514 Usufruct of surviving spouse affecting the legitime, securityA forced heir may request security when a usufruct in favor of a surviving spouse affects his legitime and he is not a child of the surviving spouse. A forced heir may also request security to the extent that a surviving spouse’s usufruct over the legitime affects separate property.

The security request is no longer an entitlement; it is up to the court’s discretion to grant the request for security.

The transition La. R.S. 9:2501How to interpret will written prior to changes in forced heirship laws.

Try to figure out what the testator’s intent was.Use law at time of testator’s death when 1 of 3 exceptions apply, otherwise use the law at the time the will was written.Exceptions that trigger using the law at the time of the testator’s death:

A. Testator needs to show a clear intent to disinherit or restrict the forced heir to the legitime (do you see an intent to leave the child out). Restrict the legitime to the amount allowed by law at the time of testator’s death.Not mentioning the kids isn’t enough for disinhersion.

B. Testament leaves to the forced heirs an amount less than the legitime under the law in effect at the time the testament is executed.

C. Testament omits a forced heir and the language of the testament indicates intent to restrict the forced heir to an amount less than the legitime under the law in effect at the time the testament is executed.

This has now been repealed, so to answer the question of what law to apply look at the code articles.

Art 870 Modes of acquiring ownershipA. The ownership of things or property is acquired by succession either

testate or intestate, by the effect of obligations and by the operation of law.

B. Testate and intestate succession rights, including the right to claim as a forced heir are governed by the law in effect on the date of the decedent’s death.

Generally, look to the law in effect at time of the testator’s death.

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Art 1611 Intent of testator controls

A. The intent of the testator controls the interpretation of his testament. If the language of the testament is clear, its letter is not to be disregarded under the pretext of pursuing its spirit. The following rules for interpretation apply only when the testator’s intent cannot be ascertained from the language of the testament. In applying these rules, the court may be aided by any competent evidence.

B. When a testament uses a term the legal effect of which has been changed after the date of execution of the testament, the court may consider the law in effect at the time the testament was executed to ascertain the testator’s intent in the interpretation of a legacy or other testamentary provision.

If “terms” are used, the court may use the law in effect at the time the will was written, if the terms legal meaning has changed.This gives judges the choice to apply the law in effect at the time the testament was written or to apply the law in effect at the time of the testator’s death.

Problems page 12-40I wish to disinherit my son- this is express, but there still needs to be a reason sothe child has a chance to rebut, especially if the child is a forced heir.If the child is not a forced heir at the time of the testator’s death, the child will not get anything.

I leave all my property to my sister – no mention of child, if at the time of death child is not a forced heir the court may apply the law at time of death or when the testament was written. Art 890. Thus if the court chooses to use the law at the time of death and the child is not a forced heir, the child will get nothing, but if the child is a forced heir, the child will get his forced portion.

I leave entire estate to my husband. Same answer as above.

Leave usufruct of my estate to my husband. Uses a legal term so must ask if the meaning of the term has changed, if it has Art 1611 would apply. If not, then Art 890 applies and the answer would still be the same as above.

I leave to my son a fractional interest in my property equal to the value of his legitime under La. law, as it may exist at the time of my death. If the child is a forced heir the child will get his forced portion, if the child is not a forced heir, the child will get nothing.

I leave the forced portion of all the property of which I die possessed of to my son. Because of changes to the forced heirship laws Art 1611 will apply and the judge may use the law in effect when the testament was written, so even if the son

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under today’s law is not a forced heir, he may still get a forced portion if the judge applies the law in effect when the will was written.

Conflicts of Laws Art 3532 – 3534

Art 3532 MovablesExcept as otherwise provided in this Title, testate and intestate succession to movables is governed by the law of the state in which the deceased was domiciled at the time of death.

Immovables are controlled by the situs of the immovable

Art 3533 Immovables situated in this stateExcept as otherwise provided in this Title, testate and intestate succession to immovables situated in this state is governed by the law of this state.The forced heirship law of this state does not apply if the deceased was domiciled outside of this state at the time of death and he left no forced heirs domiciled in this state at the time of his death.

Immovables in La follow La law

For La forced heirship laws to apply when the deceased is domiciled outside of La, there must be an immovable and a forced heir in La.

Deceased was domiciled in Miss. Son was 16 at the time of decedent’s death and was domiciled in La. Deceased owned property in La. La. forced heirship laws will apply.

Art 3534 Immovables situated in another stateExcept as otherwise provided in this Title, testate and intestate succession to immovables situated in another state is governed by the law that would be applied by the courts of that state.If the deceased died domiciled in this state and left at least one forced heir who at the time was domiciled in this state, the value of those immovables shall be included in calculating the disposable portion and in satisfying the legitime.

Comment C – the second paragraph is an exception to the situs location

The question of domicile often comes up when the person spends equal time in different places. Domicile – intent to remain and physical presence, where is most of the person’s stuff, where is voter registration, where are the bank accounts?

Jarrel v. Moon’s SuccessionDecedent was domiciled in Iowa; she had immovable property in La. valued at $500.Her daughter lived in Minn.Decedent’s will left her daughter $1,000 and her niece got everything else.At the time of her mother’s death the daughter would qualify as a forced heir under La. law had she lived here. No forced heirship laws in Iowa.

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Daughter brings suit in La. in order to get her forced portion. Neither the decedent nor the daughter were domiciled in La.Court daughter got $1,000 under the will; this would exceed her forced portion as a forced heir. Under the will she got more than the legitime.

After the changes to the conflict of laws, the daughter would no longer be considered a forced heir in La., so the result would be the same.

Art 3533 applies because neither mother nor daughter were domiciled in La. Art 3533 requires the deceased and the forced heir to be La. domiciliaries.

Deceased outside of La, forced heir and an immovable in the state – apply La. forced heirship laws.

Deceased in La, immovable in La., but forced heir is domiciled out of the state – no forced heirship.

Art 1496 Permissible burdens on the legitimeNo charges, conditions, or burdens may be imposed on the legitime except those expressly authorized by law, such as a usufruct in favor of a surviving spouse or the placing of the legitime in trust.

Succession of TurnellIf there are forced heirs, the legitime can’t be burdened.Can’t restrict the forced portion.Decedent controls property for 5 years after death and the kids don’t get the property until they are 21.Court – heirs get legitime free from conditions imposed by the will.Today, this looks like a trust which is ok to do, trust can last for the lifetime of the beneficiary, income must be paid to children, indicate what type of property can be invested in.

Example – Will gives naked ownership to the kids subject to a usufruct in favor of the testator’s sister. This burdens the legitime; the sister can only get a usufruct over the disposable portion. The will gives the forced portion and burdens it at the same time.

Succession of WilliamsDeceased left a son and grandchildren.The son was the only forced heir.The will gave the son usufruct and the grandchildren naked ownership.Son wants his forced portion free & clear, and the usufruct over the disposable portion.Court agrees with the son.Usufruct to the forced heir doesn’t transfer ownership in an immovable or movable & also doesn’t transfer at the death of the usufructuary.Forced heirs get an ownership interest in the property, not the value of the property. Art 1495

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A forced heir may not be deprived of the portion of the decedent’s estate reserved to him by law, called the legitime, unless the decedent has just cause to disinherit him. Art 1494Art 1502 also applies to this case:

Nevertheless, the legitime may not be satisfied in whole or in part by a usufruct or an income in trust. When a forced heir is both income and principal beneficiary of the same interest in trust, however, that interest shall be deemed a full ownership interest for purposes of satisfying the legitime if the trust conforms to the provisions of the La Trust Code governing the legitime in trust.

This seems to conflict with the idea that life insurance proceeds may be used to satisfy the forced portion even though no family property is being given.

Legitime in Trust

Sachnowitz v. NelsonTrust gave the kids income interest in the property.The will set up the trust, named the trustee & beneficiaries of the trust.Court – an income interest alone doesn’t satisfy the legitime.Art 1502 applies to this case:

Nevertheless, the legitime may not be satisfied in whole or in part by a usufruct or an income in trust. When a forced heir is both income and principal beneficiary of the same interest in trust, however, that interest shall be deemed a full ownership interest for purposes of satisfying the legitime if the trust conforms to the provisions of the La Trust Code governing the legitime in trust.

Trust Code La. R.S. 9:1721 – 9:2252

9:1844 Legitime burdened with income interest or usufructLegitime in trust may be burdened with a usufruct or an income interest in favor of a surviving spouse.

9:2373 Donations inter vivos to spouse of a previous marriage, exemptions from reduction and calculation of succession mass.

Donations made to a previous spouse during that marriage are not added back to the Art 1505 calculation of the mass estate. Nor is the donation subject to reduction.

Mass Estate and Reduction

Succession of WillisWill gave 1 of 6 children 150 acres of land.The same child was also the beneficiary of the life insurance and received proceeds of $20,000.She renounced her legitime and a part of the acreage.Her legacy was greater than her forced portion.Other heirs wanted her to pay back the life insurance proceeds.She wasn’t a forced heir because she renounced her legitime.

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Court – she doesn’t have to pay back the life insurance proceeds and she doesn’t have to collate because she renounced her legitime.However, her gift impinged on the legitime, so she has to pay back part of her gift.Art 1503 applies:

A donation inter vivos or mortis causa, that impinges on the legitime of a forced heir is not null but is merely reducible to the extent necessary to eliminate the impingement.

Hypo:Decedent’s will leaves all property to surviving spouse & has 1 forced heir. What

would the forced heir get if he demanded reduction? Heir gets naked ownership of the forced portion.

Art 1503 Comment B – reduce legacy to the disposable portion in full ownership and a usufruct for life, with the power to dispose of nonconsummables, over the forced portion since that the usufruct could have been left to her expressly under Art 1499.

But Prof. Yiann. disagrees – need express intent to create a usufruct & right to dispose of nonconsummables under Art 1499. This would be up to the court to decide because giving everything to the wife may not be express enough.

Reporter Max Nathan – see intent to give wife everything & Art 1499 tells you what everything that could be given and that is testator’s intent.

Yiann. – can’t get a usufruct over the sep. prop. & right to dispose of nonconsummables without an express grant by the testator.

Who has right to ask for reduction?

Art 1504 Reduction of donations, exclusive right of the forced heirsAn action to reduce excessive donations may be brought only after the death of the donor, and then only by a forced heir, or an assignee of any of them who has an express conventional assignment, made after the death of the decedent, of the right to bring the action.

An action to reduce excessive donations may only be brought after the death of the testator.

Succession of HenicanHenican had two sons, Joseph and Ellis. Joseph predeceased his father. Henican’s will by passed Ellis in favor of Ellis’ kids.Ellis’ creditors sue because Ellis is a forced heir and want his forced portion to satisfy his debts.Court – creditors don’t have the right to seek reduction, unlike the Succession of Heard, which allowed a trustee in bankruptcy to seek reduction.

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Ellis’ situation is different from Heard because a creditor has a personal right not an assignment. The supremacy clause allows trustee in bankruptcy to make a claim.

Art 1505 Calculation of the mass estateValue of the property at the time of death

Plus Gifts made w/in the last 3 years, valued at the time of the giftLess DebtsEquals Mass estate

Decedent left a will – gave a $5,000 gift to a friend, but the mass estate isn’t enough to cover the legitime. Don’t pay the $5,000 legacy, must take care of the forced heirs first.

Don’t take donations inter vivos until all existing property in the will is exhausted.

Art 1507 Reduction of legacies before donations inter vivos, order of reductionDonations inters vivos may not be reduced until all of the property comprised in donations mortis causa is exhausted. The testament that a legacy shall be paid in preference to others, in which case the preferred legacy shall not be reduced until the other legacies are exhausted.

Art 1508 Reduction of donations inter vivosWhen the property of the estate is not sufficient to satisfy the forced portion, a forced heir may recover the amount needed to satisfy his legitime from the donees of inter vivos donations made within 3 years of the date of the decedent’s death, beginning with the most recent donation and proceeding successively to the most remote.

Start with most recent donation inter vivos & work back because it is easier to recoup the most recent gifts.

If donee no longer has the gift & is insolvent go to the next donee, if he pays off, then he has a right of subrogation against the 1st donee.

Art 1509 Insolvency of doneeWhen a donee from whom recovery is due is insolvent, the forced heir may claim his legitime from the donee of the next preceding donation and so on to the donee of the most remote donation. A donee who pays the share of an insolvent donee is subrogated to the rights of the forced heir against and insolvent donee.

Art 1510 Remunerative donations, extent of reductionThe value of a remunerative donation is not included in the calculation of the forced portion, and the donation may not be reduced, unless the value of the remunerated services is less than 2/3 the value of the property donated at the time of the donation, in which event the gratuitous portion is included in the calculation and is subject to reduction.

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Art 1511 Onerous donation, extent of reductionThe value of an onerous donation is not included in the calculation of the forced portion, and the donation may not be reduced, unless the value of the charges is less than 2/3 the value of the property donated at the time of the donation, in which event the gratuitous portion is included in the calculation and is subject to reduction.

Add in the gratuitous portion of onerous and remunerative donations. The value of the gift must exceed by ½ the value of the services.

Art 1526 Onerous and remunerative donation, when rules applicableIn consequence, the rules peculiar to donations inter vivos do not apply to onerous and remunerative donations, except when the value of the object given exceeds by ½ that of the charges or the services.

Art 1512 Retention of fruits and products of donation by donee until demand for reduction

The fruits and products of property donated inter vivos belong to the donee except for those that accrue after written demand for reduction is made on him.

Donee keeps the fruits except for anything accrued after a written demand for reduction – doesn’t mean there needs to be a lawsuit.

No more action for revindication – can’t get property donee has sold to a third party, now you can only go after the donee for the value of the property (valued at the time of the gift).

If donee made a gratuitous donation, you can still go after the new owner of the property in order to reduce.

What not to include in the calculation of the mass estate:Life insurance proceedsPension plan benefitsDonations made to the spouse of the previous marriageGifts over 3 yearsRemunerative and onerous donationsConflict of laws

If the donation inter vivos equals or exceeds the disposable portion, then the legacies can’t be paid.

Hypo:Decedent died possessing

Assets 20,000Debts (10,000)Donations w/in 3 40,000

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Mass estate is 50,000Will left a legacy of $5,000 to a friend.1 forced heir¼ * 50,000 = 12,50020,000 – 10,000 = 10,000 doesn’t meet the forced portion, therefore the $5,000 legacy won’t be paid.To pay the forced heir, give him the $10,000 and get the additional 2,500 from the donations inter vivos.Art 1507 – donor can create a preferential legacyArt 1508 – take last donation inter vivos firstIn this hypo, the last donation was a ring valued at 1,000 at the time of the donation. If the donee no longer has the ring look at what else the donee has to meet the 1,000. If this donee is insolvent, then go to the next donee (who will have the right of subrogation against the owner of the ring).

Hypo:Forced heir is to get 10,000The net estate is worth 15,000This leaves 5,000.If in the will the decedent left 3 particular legacies:

A is to get 5,000B is to get 3,000C is to get 2,000

What do you do here?A gets 2,500B gets 1,500C gets 1,000

What if the will gives A 5,000 and the rest to B? Would this also be prorated? Maybe not, argue that A is a particular legatee and gets paid first.

Prescriptive period for reduction is 5 years from the death of the donor for donations inter vivos. For donations mortis causa the 5-year prescriptive period starts with the date of probate.

Hypo:

X² / | \ A B C¹ would have been 21 at the time of X’s death so C would have been a 19 18 | forced heir and therefore D represents C. D

There are 3 forced heirs.

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X dies possessingAssets 40,000Debts <30,000>Net estate 10,000

The donations inter vivos made within the 3 years prior to X’s death were:Mother 8,000 most recentFriend 7,000Brother 25,000 Total 40,000

Mass estate is 50,000; ½ is forced (25,000)25,000/3= 8,333D was a beneficiary of a $50,000 life insurance policy and this is credited against his forced portion.A & B still each need to get 8,333, but there is only 10,000 in the net estate. They can bring a reduction action against the mother first, if mom is insolvent then the friend, if the friend is insolvent then the brother.

If A were 25 he would not be a forced heir. However the forced portion would still be 25,000. B and D would each get 12,500. D gets life insurance proceeds credited to his forced portion; B would get the 10,000 and got after the mother for the balance.

Hypo:

T¹ / / | \ \ A B C D E 25 26 22 21 20T’s will leaves “all kids an equal portion”Assets 50,000Debts 30,000 20,000Donations 15,000

25,000Mass estate 60,000

Do you take 20,000 and divide it equally?There are 3 forced heirs C, D, E and 1//2 of 60,000 is 30,000C, D, and E each get 10,000 (1/6)But if T died intestate each kid would get 1/5The intestate portion is greater than the testate forced portion so don’t worry about using the intestate amount.Have a 20,000 net estate, which will be used first to the forced heirs. Go after the donations inter vivos for the remaining balance.

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Hypo

T¹ / / | \ \ \ A B C D E F

22 21 25 26 27 28

If T died intestate each would get 1/6If T died testate there are 2 forced heirs and the forced portion is ½ or ¼ each for A and BThis is more than 1/6 so use 1/6 as their forced portion. Art 1495

Art 1495 Amount of forced portion and disposable portionDonations inter vivos and mortis causa may not exceed ¾ of the property of the donor if he leaves, at his death, one forced heir, and ½ if he leaves, at his death, two or more forced heirs. The portion reserved for the forced heirs is called the forced portion and the remainder is called the disposable portion

Nevertheless, if the fraction that would otherwise be used to calculate the legitime is greater than the fraction of the decedent’s estate to which the forced heir would succeed by intestacy, then the legitime shall be calculated by using the fraction of an intestate successor.

T died possessing:Assets 110,000Debts 20,000Net Estate 90,000

Gifts w/in3 years 10,000

5,000 15,000

Mass Estate 120,000

Because 1/6 is used A & B would each get 20,000, and because the net estate is 90,000 the donees don’t have to be bothered. The remaining 50,000 in the net estate is split amongst the remaining heirs 50000/.25 = 12,500 each.

Forced heirship applies to intestacy when there have been donations inter vivos.

Disinhersion

Because forced heirs are under 24 or disabled, there was the idea to get rid of disinhersion, so the articles were inadvertently repealed.

Art 1500 still refers to disinhersion.

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Art 1500 Forced portion in cases of judicial divestment, disinhersion, or renunciation of succession rightsWhen a forced heir renounces his legitime, is declared unworthy, or is disinherited, his legitime becomes disposable and the forced portion is reduced accordingly. The legitime of each remaining forced heir is not affected.

Art 1494 Forced heir entitled to legitime; exceptionA forced heir may not be deprived of the portion of the decedent’s estate reserved to him by law, called the legitime, unless the decedent has just cause to disinherit him.

But what is just cause?

Disinherison laws Art 1617 – 1626 Art 1617 Disinherison of forced heirs

A forced heir shall be deprived of his legitime if he is disinherited by the testator, for just cause, in the manner prescribed in the following articles.

Art 1618 Formalities for disinherisonA disinherison must be made in one of the forms prescribed for testaments.

Form is either notarial or olographic, but doesn’t have to be a part of the testament.

Art 1619 Disinherison, express and for just causeThe disinherison must be made expressly and for a just cause; otherwise, it is null. The person who is disinherited must be either identified by name or otherwise identifiable from the instrument that disinherits him.

Disinherison must be express and state the cause.

Art 1620 Limitation of causes for disinherisonThere are no just causes for disinherison except those expressly recognized in the following Articles.

Art 1621 Children; causes for disinherison by parentsA. A parent has just cause to disinherit a child if:

a. The child has raised his hand to strike a parent, or has actually struck a parent; but a mere threat is not sufficient.

b. The child has been guilty, towards a parent, of cruel treatment, crime, or grievous injury.

c. The child has attempted to take the life of a parent.d. The child, without any reasonable basis, has accused a parent of

committing a crime for which the law provides that the punishment could be life imprisonment or death.

e. The child has used any act of violence or coercion to hinder a parent from making a testament.

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f. The child, being a minor, has married without the consent of the parent.

g. The child has been convicted of a crime for which the law provides that the punishment could be life imprisonment or death.

h. The child, after attaining the age of majority and knowing how to contact the parent, has failed to communicate with the parent without just cause for a period of 2 years, unless the child was on active duty in any of the military forces of the US at the time.

B. For a disinherison to be valid, the cause must have occurred prior to the execution of the instrument that disinherits the heir.

Art 1622 Grandparents; causes for disinherison of grandchildren.A grandparent may disinherit his grandchild for any of the causes, other than (f) expressed in the preceding Article, whenever the offending act has been committed against a parent or grandparent. He may also disinherit the grandchild for (g) as expressed in the preceding Article.

Grandparents can’t disinherit if a grandchild marries without parental consent.

Art 1623 Timing of action, no defenseA person may be disinherited even though he was not a presumptive forced heir at the time of the occurrence of the act or the facts or circumstances alleged to constitute just cause for his disinherison.

Don’t have to be a forced heir at the time of the occurrence of the act that leads to disinherison.

Art 1624 Mention of cause for disinherison; burden of proof; reconciliationThe testator shall express in the instrument the reason, facts, or circumstances that constitute the cause for the disinherison; otherwise, the disinherison is null. The reason, facts, or circumstances expressed in the instrument shall be presumed to be true. The presumption may be rebutted by a preponderance of the evidence, but the unsupported testimony of the disinherited heir, shall not be sufficient to overcome the presumption.

Presume the cause for disinherison is true.

Art 1625 ReconciliationA. A person who is disinherited may overcome the disinherison by proving

reconciliation with the testator after the occurrence of the reason, facts, or circumstances expressed in the instrument, provided he does so by clear and convincing evidence.

B. A writing signed by the testator that clearly and unequivocally demonstrates reconciliation shall constitute clear and convincing evidence.

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Proof of reconciliation will nullify the disinherison. This is done by clear and convincing evidence. If the testator writes that there has been reconciliation, then this would be clear and convincing evidence.

Art 1626 Defenses to disinherisonA disinherison shall not be effective if the person who is disinherited shows that because of his age or mental capacity he was not capable of understanding the impropriety of his behavior or if he shows that the behavior was unintentional or justified under the circumstances. Proof of this defense must be by a preponderance of the evidence, but the unsupported testimony of the disinherited heir shall not be sufficient to establish this defense.

Succession of VincentSon struggled with his father, pointed a rifle at him and shot at him.Father, in his will, stated that the son had struck him and fired a rifle at him.Son said this was self-defense and he wasn’t arrested.Case turned on the credibility of the witnesses.Son had the burden of proof & court found he didn’t meet his burden of proof.Art 1621 (1) applies – striking the parentArt 1624 – presume testator’s reasons are true.

Succession of BertuatCase is about disinherison for failure to communicate with the father for 2 years without just cause.Court denies disinherison.Kids had the burden of proof, but the father never wanted a relationship with the kidsCourt said the kids were justified because of the father’s own actions.

Succession of GrayCase is about a failure to communicate with the father.There wasn’t a good relationship between the father and the children.The daughters became estranged from their father in 1989.Court – communication must be respectful & relayed to the parent. Daughters must show that 2 years hadn’t elapsed without communications. Daughters couldn’t meet this burden so they were disinherited.

Succession of StecklerThe court held that birthday cards sent by certified mail was enough to fulfill communication with a parent.

V Donations Omnium Bonorum & Dispositions Reprobated by LawArt 1498, 1519 – 1522, 1527, 1769

What the donor can’t do.

Omnium bonorum – for the good of the all

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A donor can’t give away all of his property because the donor still needs to be taken care of and he can’t expect society to take care of him.

Art 1498 Nullity of donation inter vivos of entire patrimonyThe donation inter vivos shall in no case divest the donor of all of his property; he must reserve to himself enough for subsistence. If he does not do so, a donation of a movable is null for the whole, and a donation of an immovable is null for the whole unless the donee has alienated the immovable by onerous title, in which case the donation of such immovable shall not be declared null on the ground that the donor did not reserve to himself enough for his subsistence, but the donee is bound to return the value that the immovable had at the time the donee received it. If the donee has created a real right by onerous title in the immovable given to him, or such right has been created by operation of law since the donee received the immovable, the donation is null for the whole and the donor may claim the immovable in the hands of the donee, but the property remains subject to the real right that has been created. In such a case, the donee and his successors by gratuitous title are accountable for the resulting diminution of the value of the property.

It is absolutely null for a donor to give everything away; the donor must keep enough for his own subsistence. The donor can go after the donee for any diminution in value.The donor challenges his own actions.

Lagrange v BarreThe donor wants his property back.Donee’s defenses – the donation was onerous, not gratuitous and the donor had enough to subsist on. The donee also claims a 5-year prescriptive period.Court – there is no prescription for donation omnium bonorum.The public policy is that the donor should not be a ward of the state.

Who has standing to bring an action omnium bonorum? Only the donor while he is alive because it is a personal action.Should heirs be allowed to bring action after the donor dies? Forced heirs can seek reduction.

If the donation was absolutely null, then the forced heirs have been given the right to bring an action omnium bonorum.

Bernard v NoelOnly forced heirs have a right to bring an action omnium bonorum and then only for the amount of the forced portion.This is allowed because of case law, not because of a code article.

Hypo:

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X gave away everything he had 5 years ago. At his death, his forced heirs want to bring action. Donee’s defense is that X had other means to sustain himself.

Donor must have the means to sustain himself at the time of the donation.

If donation is absolutely null, then it never left the estate (back in the patrimony).

Immoral, Illegal, and Impossible Conditions La CC 1519 – 1522

Applies to both donations inter vivos and donations mortis causa.Art 1519 Impossible, illegal or immoral conditions

In all dispositions inter vivos and mortis causa impossible conditions, those which are contrary to the laws or to morals, are reputed not written.

Art 1519 remedy – throw out the condition and the donee gets the gift.

Succession of ThompsonDeceased wants to make sure his daughters are taken care of.Will gives the forced portion to the heirs and the disposable portion to the Fink Asylum on the condition that his daughters would be taken care of.The Fink Asylum was for Protestant widows and children and the daughters don’t meet this requirement.Art 1519 says ditch the condition & give the Fink Asylum the money, but the court says this defies the testator’s intent behind the donation. The primary intent of the testator was to take care of his daughters, so the court nullifies the entire disposition.This case is an exception to Art 1519, which says to throw out just the condition.

Labarre v. HopkinsWife’s will gave usufruct of the property to her husband until he remarries. When he remarries the property goes back to her family.This is not a prohibited substitution.Husband says this is a restraint on marriage.Court – what the wife did was the same as the surviving spouse usufruct.

Succession of RuxtonThe will gave a gift conditioned on donee not being married at the time of the testator’s death. The donee challenges under Art 1519, argues that the condition is contrary to morals.Gift doesn’t prevent marriage, the gift was to help her if she wasn’t married.No deterrent to marriage because the donee didn’t know about the gift or the condition.

Succession of AugustusWife gave her husband usufruct over separate property, the usufruct would terminate if the husband let a certain woman enter the house.The husband married this woman after his wife died.

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Trial court – the usufruct terminated. This is a restrictive usufruct, but there is no restriction on the right to remarry.

Succession of FeitelThe donee can’t sell or mortgage the property he was given for 10 years after the death of the donor. This is a prohibited substitution because it takes the property out of commerce.Donee only had limited control over the property.

Today, look at the trust code & RS 9:2119 and this would be ok if done in a trust.

Under RS 9:2119 a settlor by the provisions of the trust instrument cannot forbid a sale of immovable property for a period beyond 15 years from his death.

A prohibited substitution is a substantive problem.A double disposition with a charge to preserve and a successive order is present, and then the entire gift will fall if not done in trust.

Art 1520 Prohibited substitutions, definitionsA disposition that is not in trust by which a thing is donated in full ownership to a first donee, called the institute, with a charge to preserve the thing and deliver it to a second donee, called the substitute, at the death of the institute, is null with regard to both the institute and the substitute.

Donor→Donee→Third partyThe donor charges the donee to preserve the thing and give it to the third party. This is a double disposition. The duty to preserve is restrictive.

3 elements for a prohibited substitution:1 a double disposition in full ownership;2 a charge on the donee to preserve and render the property to another;3 successive order.

If all 3 elements are present and the donation is not in trust form, then the entire disposition is null.

Donee doesn’t have the power of testation and is charged to preserve the thing. This is different from take the thing, and if anything is left over give it to X. There is no charge to preserve, so this is not a prohibited substitution.

Might be able to do something similar to a prohibited substitution if the trust code says it is ok.

Remedy under this article is to throw out the entire disposition; the donee doesn’t get the gift.

This article was changed in 1962 to adapt to the trust code.

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Look to the intent of the donor in order to try and save the disposition.

Succession of JohnsonA 1953 case – prior to revisionThomas’ olographic will left everything to his wife for as long as she lived, then she is to leave to his son ¼, and to their daughter the rest of what is left.The son contests the will because he may not get anything if nothing is left. The son says this is a prohibited substitution, therefore the whole disposition will fall and there is no will.Court – there is no charge to preserve, therefore this isn’t a prohibited substitution.A fidei commissum has no duty to preserve, but still have a duty to turn the thing over to someone else.Court – this is a fidei commissum & therefore disposition to the wife stands, but nullifies the duty to leave the property to the kids.Now Art 1520 doesn’t reference fidei commissum, so what would happen today? Son would get the forced portion if he were a forced heir.

Succession of MorganOlographic will leaves separate property to one person and community property to the wife. Testator restricts sale of both properties until after the death of the testator and his wife.Court – this is a prohibited substitution because the court found the language “not to sell” created a charge to preserve.

Baten v. TaylorTestator’s will left the wife his property if she survives him for 30 days. If she doesn’t survive for 30 days, then his nephews get the property. This is done for tax reasons.Testator is from Texas and has land in La.As long as 30 days pass the property goes to the wife. This is not a double disposition.

Now a testator can impose survival condition for up to 6 months.Baten – no prohibited substitution because:

1 no double disposition2 no charge to preserve 3 no successive order

Succession of WaltersIf a will contains a prohibited substitution, then the disposition is thrown out.But save everything else.

Art 1521 Vulgar substitutionThe disposition by which a third person is called to take gift or legacy in case the donee or legatee does not take it is not a prohibited substitution. A testator may impose as a valid condition that the legatee or a trust beneficiary must survive the testator for a stipulated period, which period shall not exceed 6 months after the

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testator’s death, in default of which a third person is called to take the legacy. In such a case, the right of the legatee or trust beneficiary is in suspense until the survivorship as required is determined. If the legatee or trust beneficiary survives as required, he is considered as having succeeded to the deceased from the moment of his death. If he does not survive as required, he is considered as never having received it, and the third person who is called to take the bequest in default of his survival is considered as having succeeded to the deceased from the moment of his death. A survivorship condition as to the legitime of a forced heir shall only be valid if the forced heir dies without descendants, or if he dies with descendants and neither the forced heir nor the descendants survive the stipulated time.

Third person takes when the donee or legatee does not take the gift.Legatee or trust beneficiary may be required to survive the testator for a stipulated time ≤ 6 months. The right of the legatee or trust beneficiary is in suspense; if the legatee doesn’t survive he is considered to never have received the gift.

Hypo:I give my house to Mary, my daughter, if she survives me for 6 months. If Mary doesn’t survive for the stipulated time, my friend gets the house.If Mary has kids and the kids survive the time period, then the donation to the friend is prohibited. If Mary doesn’t have kids this is ok.

If the stipulated period is greater than 6 months, the court may rewrite the period to 6 months.

Swart v. LaneTestator was pregnant when she wrote her will. She left everything to her child, but if the child is dead, her husband will get everything.Court this is a vulgar substitution and is ok.

Art 1522 Separate donations of usufruct and naked ownershipThe same shall be observed as to the disposition inter vivos or mortis causa, by which the usufruct is given to one, and the naked ownership to another.

Usufructuary has the right to use it and get the fruits. The naked owner has the right of disposal.

Usufructuary gets an immediate vested property interest that ends at either his death or sooner if that is the wish of the donor. The usufructuary has no right to pass on the property.

Succession of ThilborgerTestator’s will gave husband usufruct and naked ownership to Charity Hospital.Collateral heirs challenge the will on the grounds that this is a prohibited substitution.

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Court focuses on the language “use of” the property for as long as he lives and at his death it is to be given to Charity Hospital.

Watch for language such as: use, use and benefit, at his death property goes to…

Succession of FournetThe will created successive usufructs. Is this a prohibited substitution?If the will gives a usufruct, but doesn’t say who gets naked ownership, then the naked ownership goes to the intestate heirs.La. Code allows successive usufructs.

Hypo:Will gives the usufruct to B and naked ownership to John. When John dies, his heirs if he has any will get naked ownership.

Settlor → Trust / \ income principal beneficiary a→b→c this is generally prohibited unless beneficiary code says it is ok

x→y→z this is similar to a successive usufruct and is allowed.

To get a usufruct a person must be alive at the time the usufruct is given.

Succession of GoodeDecedent had neither descendants nor living spouse. Survived by a half-brother and nieces and nephews.The will left oil and gas royalty interest payments to Pauline, and at her death this payment goes to his nieces and nephews.Does Pauline get income or ownership?Both the trial court and the appellate court found this to be a prohibited substitution.La. Supreme Court – testator knew the difference between royalty interest & royalty interest payments, so this is a successive usufruct because the payments go to one person first, and then to others.But who had naked ownership? The intestate heir (his ½ brother) gets naked ownership because the will didn’t say who got naked ownership.

La. R.S. 9:1807 allows successive income beneficiaries

La. R.S. 9:1972 upon a principal beneficiary’s death, his interest vests in his heirs or legatees subject to the trust; provided however that the trust instrument may stipulate otherwise to the extent permitted by the following sections of the subpart and R.S. 1985.

La. R.S. 1973 shifting interest in principalA. The trust instrument may provide that the instrument of either an original or a

substitute principal beneficiary who dies intestate and without descendants

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during the term of the trust or at its termination vest in some other person or persons, each of whom shall be a substitute beneficiary.

B. Except as to the legitime in trust, the trust instrument may provide that the interest of either an original or a substitute principal beneficiary who dies without descendants during the term of the trust or at its termination vest in some other person or persons, each of whom shall be a substitute beneficiary.

This is extremely limited.

Art 1527 Charges or conditions imposed by donorThe donor may impose on the donee any charges or conditions he pleases, provided they contain nothing contrary to law or good morals.

If the condition is impossible, or contrary to law or moral throw out the condition.Treat the condition as if it hadn’t been written.

Art 1769 Unlawful or impossible conditionA suspensive condition that is unlawful or impossible makes the obligation null.

V1 Donations Inter Vivos La CC 1523 – 1535

A donation inter vivos is an act by which the donor divests himself of ownership at present and donee accepts it.

Art 1523 Gratuitous, onerous, remunerative donations, definitionsThere are 3 kinds of donations inter vivos:

Gratuitous – made without condition and merely from liberality.Onerous – burdened with charges imposed on the doneeRemunerative – pays donee back for services already rendered.

Art 1524 Onerous donationThe onerous donation is not a real donation, if the value of the object given does not manifestly exceed that of the charges imposed on the donee.

Art 1525 Remunerative donationThe remunerative donation is not a real donation, if the value of the services to be recompensed thereby being appreciated in money, should be little inferior to that of the gift.

Art 1526 Onerous and remunerative donations, when rules applyIn consequence, the rule peculiar to donations inter vivos do not apply to onerous and remunerative donations, except when the value of the object given exceeds by ½ that of the charges or of the services.

A gives B $3,000. B does $2,000 worth of work.3,000 – 2,000 = 1,000 this exceeds the value of the services by ½ so apply the rules of donations.

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A gives B a watch worth $3,000. B does $2,500 worth of work.3,000 – 2,500 = 500 this doesn’t exceed the value of the services by 1/2, so don’t follow the rules of donations. Treat this like an onerous contract.

An onerous donation may be in favor of the donor or a third party.Remunerative – the services have already taken place.

Art 1510 and Art 1511 are slightly different in the treatment of onerous and remunerative donations. Do not reduce these type of donations unless the value of the services or the charges is less than 2/3 the value of the property. Include the gratuitous portion in the calculation of the mass estate.

Succession of HenryFather died, then the mom made a will and left everything to her son. She felt the daughters had gotten enough already and equivalent to their forced portion.The daughters challenge the will and want their forced portion. Today to challenge, you would want to look at capacity, undue influence, form.The will said the son was to be repaid for the cost and expense of her support that he provided.Trial court held for the daughters.The La. Supreme Court looked at the cost of her care and the value of the property. The cost of the care exceeded the value of the property.Son had the burden of proving that the value of the services was worth more than the property.No need to reduce because the value of the gift didn’t exceed the value of the services by 2/3.If it is an only child providing for the costs and care of a parent, presume it is done without the idea of being paid back.If there is more than 1 child, presume it is done gratuitously and all should share in the costs and care of the parent.The daughters also argue that a will can’t contain a remunerative donation.Court – no, it is understood that this could be done in a will. Treat this like a giving in payment, but donee must prove the value of the services.

Succession of FormbyNuncupative will by public act was written in 1925, she died in 1957.The will gave all the property to the son. The term onerous donation appears in the will.Mother wanted to pay her son back for all he has done for her.The property was worth $10,000.The daughters had little contact with their mother.Daughters challenge the will.Question is: what was paid for, what has been done up until the time of the will or until the time of her death.A will is effective at death; this is why you can argue it covers up until her death.The intent to pay her son was clear.

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Court – look at the services to see if he is repaid. The court found this to be a dation en paiment for the value of the services up until time of her death.

Succession of DanosAssets given are certificates (incorporeal movables).Administratix claims the assets.Need an authentic act for a gift of incorporeal movables.Donee this was a remunerative gift & don’t need proper form. The manual gift is ok.The gift was valued at $26,000. The services were valued at $12,000. Gift exceeds the value of the services by more than ½, so the rules of donations must be complied with, and for the donation to stand you need an authentic act.

Art 1528 Donation of future property, nullityA Donation inter vivos can comprehend only the present property of the donor. If it comprehends property to come, it shall be null with regard to that.

Art 1529 Donation conditional on will of donor, nullityEvery donation inter vivos made on conditions, the execution of which depends on the sole will of the donor is null.

Art 1530 Donation conditional on payment of future or unexpected debts and charges, nullity

It is also null, if it was made on condition of paying other debts and charges than those that existed at the time of the donation, or were expressed either in the act of donation or in the act that was to be annexed to it.

Art 1531 Donation reserving the right of dispositionIn case the donor has reserved to himself the liberty of disposing of any object comprised in the donation or of a stated sum on the property given, if he dies without having disposed of it, that object or sum shall belong to the heirs of the donor, any clause or stipulation to the contrary notwithstanding.

Art 1532 Donations excepted from Articles 1528-1531The four preceding articles are not applicable to donations of which mention is made in the eighth and ninth chapters of the present title.

Art 1533 Donation or reservation of usufructThe donor is permitted to reserve for his own advantage, or to dispose of the advantage of any other person, the enjoyment or usufruct of the immovable property given.

Art 1534 Stipulation for right of return to donorThe donor may stipulate the right of return of the objects given, either in case of his surviving the donee alone, or in case of his surviving the donee and his descendants.

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Art 1535 Right of return, effectThe effect of the right of return is, that it cancels all alienations of the property given that may have been made by the donee or his descendants, and causes the property to return to the donor, free and clear of all incumbrances and mortgages.

The substance and form of inter vivos donations

Some forms supercede the civil code (stocks and bonds).Even if the form is correct, still need intent to donate (substance)

Art 1536 Donation of immovables or incorporeals, form requiredAn act shall be passed before a notary public and two witnesses of every donation inter vivos of immovable property or incorporeal things, such as rents, credits, rights or actions, under the penalty of nullity.

Stock transfers

Primeaux v. LiberstatCase involves stock given to the son by the father.Is the stock separate property of the son, or community property of the marriage?The father did not do this in an authentic act, just gave the stock to his son.But under the rules for stock transfers, don’t need an authentic act, manual delivery is enough and the gift of stock to the son is separate property.Louisiana interpretations hold the present transfers of shares of stock to the donee, valid under the stock-transfer act and effectively transferring irrevocable title to the shares to him to be valid also as donations to him, because the donor with such donative intent furnished the consideration for their issuance.

Checks and other negotiable instrumentsDon’t follow the civil code because of the interaction with other states. Use form rules of the UCC, but use La. substantive law.

Succession of DePouillyWhat is the legal quality of checks and promissory notes?The decedent, 3 days prior to his death, gave executor a check payable to him. The executor was also given promissory notes.Opponents are the universal legatees.They question whether the check was a valid donation inter vivos.Court – depends on the character of the check.Check is an incorporeal movable.The actual real delivery of money was made. The check was the means of delivery and no formality was required.

A check is a convenient way to transfer money.

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Succession of LeroyTestator was given a certified check for a balance due him. The testator endorsed the certified check and gave it to the executor (manual delivery).A certified check is money set aside, and the bank is the drawer.Can this be given by manual gift or is an authentic act necessary?Executor hadn’t cashed the check at the time of the testator’s death.Court – this is a valid gift even though the check hasn’t been cashed. The check was certified and the bank was obligated to pay.

Succession of SchneiderAunt gave a nephew a check for $35,000 on 3/13/1965. On the memo line she wrote the word donation. 4 months later the aunt died. 10 days after her death the nephew tried to cash the check.The bank returned the check because the aunt was dead.This was the donor’s own check and it remains an incorporeal and needs more for there to be a valid donation. There is no real delivery without cashing the check.The donor still had control of the funds, and could stop payment on the check.

If a check has been cashed the donation inter vivos is valid.If the check is certified, but not cashed at the time of death, still ok.If the check is neither cashed nor certified, then the donee is out of luck. Would need an authentic act besides possession of the check.

Hypo:A issues his own check to B as a donation. B cashes the check before A dies.DePouilly applies. This is treated like a manual gift. This is also ok under the Negotiable Instrument Act.

Say B doesn’t cash the check & B goes after the estate to get paid. Substantively this is a gratuitous promise to pay cash and is revocable until A dies. B needs an authentic act. Succession of Leroy.

A owes money to B and gives B a check to pay the debt. B endorses the check to C. B dies; C hasn’t cashed the check yet. Under Negotiable Instrument Act this is valid. A has no defense that it was a gratuitous transfer and C gets the money. B had no control once he endorsed the check.

A certified check is an unconditional promise of the bank to pay; this is why it is a valid donation inter vivos.

Add in page 14-14 and 14-15

Art 1537 Donation of immovables, feigned delivery ineffectiveNo feigned delivery of immovables given shall have effect against third persons.

Art 1538 Donation of movables, form required

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A donation inter vivos, even of movable effects will not be valid, unless an act be passed of the same, as is before prescribed.Such an act ought to contain a detailed estimate of the effects given.

Art 1539 Manual GiftThe manual gift, that is the giving of corporeal movable effects, accompanied by a real delivery, is not subject to any formality.

Analyze by looking at now much control has been relinquished to see if the donation has been completed.

Succession of JonesDecedent had terminal cancer; she issued a check payable to the donee.Donee claims she was to pay medical bills and keep the remainder.Estate – the money was put aside and the donee was to act as an agent and pay the bills, and any money left over was to go back to the estate.Was there a donation inter vivos?Did the donor intend to give a gift to the donee?Form is not much of a concern here; more concerned with the threshold test of was there an intention to give?Money was given with a stipulation to pay medical bills – donee only charged the donor low rent, ran her errands – all of this makes this donation both onerous and remunerative.Court – donor intended to make a gift.Donee was to pay all the bills up until the time she received the check.The future bills were to be paid by the estate.

Succession of TeboTransfer of a check and bonds was at issue.To determine if there is a donation of the balance in a checking account, you must look at how much control was given to the donee. Did the donor intend to give the money to the donee or make the person his agent (no intent to donate)?Form indicates the intent of the donor.Checking account – donor gave a blank check to the niece, with detailed instructions. The niece was an agent; donees were the grandniece and grandnephew. There was a manual gift of money, which was completed when the check was cashed and the money was placed in to a savings account for the minors.Still need acceptance of the gift.Court – acceptance was the opening of the savings account.Bearer bonds were in a safety deposit box. Decedent wanted the grandniece and grandnephew to have these. He left his niece an undated and unsigned note (not a will) with instructions to remove the bonds from the safety deposit box. The niece didn’t have the key and couldn’t remove the bonds from the box so no delivery and no manual gift.

Art 1540 Donations effective from date of acceptanceA donation inter vivos shall be binding on the donor, and shall produce effect only from the day of its being accepted in precise terms.

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The acceptance may be made during the lifetime of the donor by a posterior and authentic act, but in that case the donation shall have effect, with regard to the donor, only from the day of his being notified of the act establishing that acceptance.

Art 1541 Corporeal possession in lieu of acceptanceYet, if the donation has been executed, that is, if the donee has been put into corporeal possession of the effects given, the donation, though not accepted in express terms, has full effect.

Bank Accounts and Homestead Shares

Menard v. MuhsOptional payment shares of Security Homestead are at issue.Decedent signed a transfer form in the back of the account book. He gave title to the kids for their education and their mom was given the passbook. A new account was opened in the kids’ name with the money from the old account.Court – this is a complete donation because the cash was put in a new account.

Burkes v. BarbourDecedent had an optional shares account and stock certificate in his name alone, and a savings book.He added the defendants name to the account, but not to the certificates.The donee was taking care of the decedent prior to his death.Was putting the name on the account enough? No, decedent still had control and there was no delivery of the funds.Kept name on the savings book and the stock certificate, co-interest in the bank account because both had access to the funds.

Basco v. Central Bank and TrustDecedent opened a bank account in the name of someone else, but only the decedent could withdraw funds. Court – donor maintained control and therefore the donee didn’t get the funds. There was never a change into cash. This is an incorporeal movable and the donation fails for lack of proper form – need an authentic act.

Graffeo v. GraffeoIs the bank account the husband’s separate property or is it community property?The account was set up with funds prior to the start of the community property regime, but the husband set up the account in the name of the husband or wife. Prior to their separation the husband put the money into a separate account in his name only.Trial court – community property because he put the wife’s name on the bank account, and he asked her to give up her job and move into his house.

Succession of LawrenceThe case is about 2 CD’s and a NOW account.

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The uncle wanted the money to go to his nephew, and the account was in both of their names.The Bank put the money into concursus (w/ the court).Nephew – the money is mine.Was the intent manifested? There was no will, but the nephew had helped the uncle for years. Court – placing the nephew’s name on the account was not purely gratuitous. The intent was shown in the documents and the name on the account. This was a remunerative donation and the value of the services was about the same as the value of the gift.

Acceptance

Rutherford v. RutherfordExecutrix brings suit against the donee – argues that the acceptance must be in the precise terms of the offer and here the donee got the wrong date, wrong notary, and didn’t describe the property.Court lets is go because this was the donor’s only property.

Donations may be revoked Art 1559 – 1569

Art 1559 Causes for revocation or dissolutionDonation(s) inter vivos are liable to be revoked or dissolved on account of the following causes:

1 The ingratitude of the donee;2 The non-fulfillment of the eventual condition, which suspend their

consummation;3 The non-performance of the conditions imposed on the donee;4 The legal or convention return.

Art 1560 Revocation for ingratitudeRevocation on account of ingratitude can take place only in the three following causes:

1 If the donee has attempted to take the life of the donor;2 If he has been guilty towards him of cruel treatment, crimes or

grievous injuries;3 If he has refused him food, when in distress.

Whitman v. WhitmanWife wants gifts given to her husband back because he committed adultery.She argues Art 1559 ingratitude of the donee and Art 1560 cruel treatment.Her mother had given the property to them, and the husband built a house on the property, which he wasn’t required to do.Wife says, yes I made a donation but it comes back because of his ingratitude. The court agrees with her.

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Art 1561 Revocation of ingratitude; prescription, partiesAn act of revocation for cause of ingratitude must be brought within one year from the day of the act of ingratitude, imputed by the donor to the donee, or from the day that the act was made known to the donor.The revocation cannot be sued for by the donor against the heirs of the donee, nor by the heirs of the donor against the donee; unless in the latter case, the suit was brought by the donor, or he died within the year in which the act of ingratitude was committed.

Art 1562 Revocation for ingratitude, effect on prior encumbrances or alienations by donee

Revocation for cause of ingratitude affects neither the alienation made by the donee nor the mortgages, nor the real incumbrances he may have laid on the thing given, provided such transactions were anterior to the bringing of the suit or revocation.

Cotton v. WashburnThe husband bought a house prior to the marriage. Vendors, in an authentic act put the house in the names of the husband and wife. Both lived on the property.Husband argues that this is separate property.Court – no this is community property. Wife didn’t need to accept in precise terms because she was in corporeal possession.Shows Art 1541 applies to corporeal immovables.

Mobley v. LeeThis case involves ownership of real property where neither party had possession of the property.If a gratuitous donation, could it be revoked under Art 1561?Had there been a complete donation, could it be revoked?Court – onerous and remunerative donations are not governed by the rules for revocation of donations, but rather by the rules governing contracts.

Garcia v. DulcichGarcia lives with the donees, and wants to be taken care of in exchange for the donation.Was this a donation or a payment?To revoke a donation use Art 1559 ingratitude and Art 1560 cruel treatment.Court – might be onerous, but still could get the donation back because of nonperformance by the donee. (Contract law).

DiMattiaDifferent types of prescription depending on contract law or laws of donations.Donation – ingratitude 1 yearContract – nonperformance 5 years

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Art 1563 Revocation for ingratitude, restoration of value and fruitIn case of revocation for cause of ingratitude, the donee shall be obliged to restore

the value of the thing given, estimating such value according to its worth at the time of bringing the action, and the fruits from the day that it is brought.

Art 1564 Donations in consideration of marriage, revocability for ingratitudeDonations in consideration of marriage are not revocable for cause of ingratitude, when there are children of that marriage.When there are not, the revocation takes place with regard to the donee, but without impairing the rights resulting from the marriage in favor of the other party to the marriage.

Art 1565 Dissolution for non-fulfillment of suspensive conditionWhen an eventual condition, which suspends the execution of a donation, can no

longer be accomplished, as if the donation was to be executed on the arrival of a certain vessel, and the vessel is lost, the donation is dissolved of right.

Art 1566 Non-fulfillment of potestative conditions; suit to dissolveBut if the condition be potestative, that is, if the donee is obliged to perform or

prevent them, their non-fulfillment does not, of right, operate a dissolution of the donation; it must be sued for and declared judicially.

Art 1567 Revocation or dissolution for non-execution of condition; prescriptionAn action for revocation or rescission of a donation on account of the non-execution of the conditions imposed on the donee, is subject only to the usual prescription, which runs only from the day that the donee ceased to fulfill his obligation.

Art 1568 Revocation or rescission for non-execution of condition

A. In case of revocation or rescission on account of the non-execution of the condition, the immovable shall return to the donor unless the donee has alienated by onerous title the immovable given to him. If the donee has alienated by onerous title the immovable given him, the donor shall not have the right to claim the immovable in the hands of the transferee; however, the donee is bound to return the value that the immovable had at the time of its donation to the donee.

B. If the donee has created a real right by onerous title in the immovable given to him or a real right has been created by operation of law since the donee received the immovable, the donor may claim the immovable in the hands of the donee, but subject to the real right that has been created. In this case, the donee and his successors by gratuitous title are accountable to the donor for the resulting diminution in the value of the property.

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Art 1569 Revocation or dissolution, donee’s liability for fruitsIn all cases, in which the donation is revoked or dissolved, the donee is not bound to restore the fruits by him gathered previous to the demand for the revocation or rescission.But in case of the non-fulfillment of condition, which the donee is bound to fulfill, if it be proved to have proceeded from his fault, he may be condemned to restore the fruits by him received since his neglect to fulfill the condition.

Board of Trustees v. RichardsonDonor put a condition on a donation of land to a church. A church was to be built within one year. The church was never completed and the donee wants to sell the land.Donor tells the potential buyer of the property that he will get the property back because he gave the property under the condition that a church would be built.Court – gave the property back to the donor because the condition wasn’t fulfilled.

La. R.S. 9:2321 Title quieted and perfected by lapse of timeThere is hereby quieted and perfected title to real estate donated to church and religious representatives, religious associations or religious corporations, or their successors or religious assigns, where over 10 years continuous and uninterrupted possession and use for the purposes intended by the donation have been had and elapsed since the date of the execution of the donation and where the real estate presently being possessed and used for the purposes intended in the donation and where such donation is of record in the office of the clerk and recorder of the parish in which the donated property is situated.

La. R.S. 9:2322 Rights in property after perfection of title.In all cases the donees or their successors, assigns, or representatives may effectively use, mortgage, hypothecate, incumber, alienate and/or dispose of the property donated or any part thereof without regard to the conditions or charges imposed on the donation, upon declaring the same to have been fully complied with to all intents and purposes by said lapse of time, possession, and use in compliance with said conditions or charges, and upon declaring the public policy served thereby to be against restricting property from commerce.

VII Dispositions mortis causa and the marital portion La CC 1570 – 1616, 2432 – 2437

Art 1570 Testaments, formA disposition mortis causa may be made only in the form of a testament authorized by law.

So long as the testament is in the approved form and demonstrates an intent to dispose ofproperty, it is irrelevant that the testator may have intended it to be different.

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Art 1571 Testaments with others or by others prohibitedA testament may not be executed by a mandatary for the testator. Nor may more than person execute a testament in the same instrument.

Neither an agent nor a curator can write a will for someone else.Can’t have a joint will because of individual rights and interests.

Because this is so personal, how much should you cut off someone’s ability to write awill?

Hypo:A person w/ Alzheimer – can he write a will during a lucid interval?If fully interdicted can’t make a juridical act.Under a limited interdiction may be able to write a will.

If not interdicted use regular rules on capacity to attack a will.

Art 1572 Testamentary dispositions committed to the choice of a third personTestamentary dispositions committed to the choice of a third person are null except as expressly provided by law. A testator may delegate to his executor the authority to allocate specific assets to satisfy a legacy expressed in terms of a value or a quantum, including a fractional share.The testator may expressly delegate to his executor the authority to allocate a legacy to one or more entities or trustees of trusts organized for educational, charitable, religious, or other philanthropic purposes. The entities or trusts may be designated by the testator or, when authorized to do so, by the executor in his discretion. In addition, the testator may expressly delegate to his executor the authority to impose conditions on those legacies.

Can give the executor the power to allocate assets. Can delegate to the executor the right to allocate a legacy to a charity.May also delegate to the executor the authority to impose conditions on those legacies.

Art 1573 FormalitiesThe formalities prescribed for the execution of a testament must be observed or the testament is absolutely null.

Art 1574 Forms of testamentThere are two forms of testaments: olographic and notarial.

In the past there were other will forms.Donations mortis causa takes effect when the donor dies.Donations mortis causa are revocable up until the time of death.Intent is substantive – did the person really mean to write a will.Usually applies to an olographic will (written, dated, and signed by the testator).

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In re Billis’ WillDid the person mean for this to be a will?“If anything happens to me” – means when I die.

Letter says take possession of what I have.Court – there is an intention for the letter to be a will.

Hypo:Instrument meant to be an adoption agreement, gave rights to child as a forced

heir. This isn’t a will, trying to do an adoption.

Succession of Shows“All to my sister’ ambiguous doesn’t show intent to make testamentary disposition.

Succession of HammettRead the document as a whole.Word leave helps.Court – found intent because the language was specific.

Hendry v. Succession of HelmsHelms had a statutory will.The statutory will was not an original will form under the La. code.Need a notary and if complicated go to an attorney for him to type up.Sign on every page and witnessed and notarized at the end.Helms went to attorney with a 6 page written document, which is what donees want to use, as an olographic will. But she had another appointment to sign a statutory will.Court – no will because of no intent to make the 6-page document her last will.

Succession of MottShe wrote her last will & testament, but gave seizin to her goddaughter, not ownership.Intent was to give seizin. Was there testamentary intent?Used word seizin, thought she was giving ownership.Cut more slack to an olographic will.Court found intent to give property to the goddaughter.

Will Forms

3 will forms under the old code:1. nuncupative open

a. nuncupative privateb. nuncupative public

2. mystic3. olographic

A fourth type of will was added by statute – statutory will.

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All of these require a writing signed by the testator.

Nuncupative by public act required a notary and 3 witnesses residing in the place where the will was executed. 5 witnesses were needed if executed where the testator didn’t reside.Written by the notary as dictated by the testator.Must be read to the testator in the presence of the witnesses.Must be done all at once and without interruption.Must be signed by the testator, but if he can’t sign, he must make an express declaration that he can’t sign.Signed by the witnesses, or by 1 if the others couldn’t write.Self-proving – look at the face; don’t need witnesses to prove it.

Nuncupative by private act is written by the testator or by someone else taking his dictation.5 witnesses if residing where place received.7 if residing outside of place received.Could write the testament beforehand and bring it to the notary and the witnesses. Still needs to be read to the witnesses in the presence of the testator.Signed by the testator, but if he was unable to sign or didn’t know how to sign that was ok (testator doesn’t have to sign) because the will has been read to the witnesses.Need at least 2 witnesses to sign their names. Other witnesses can either sign or make their mark.

Mystic will – secret testamentClosed testament – testator signed dispositions, document was then closed and sealed. Testator gives the closed and sealed document to a notary and 3 witnesses. Declares it was his last will and testament and written by him or at his discretion.Notary drew up act of superscription, which was signed by the testator, the notary and the 3 witnesses. Must be done without interruption.Had to keep it sealed until opened by the court.Had to be able to write to make a mystic will.Superscription had to say all formalities were complied with.If the formalities weren’t fully complied with, the will would be null.Had to mention if the testator couldn’t sign and mention if a witness couldn’t sign.If handwritten by the testator it could also be probated as an olographic will.

Now we use olographic and notarial wills.

Form & testaments La C.C. 1574 – 1580.1 Art 1574 Forms of testament

There are two forms of testaments: olographic and notarial.

Art 1575 Olographic testament

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A. An olographic testament is one entirely written, dated, and signed in the handwriting of the testator. Although the date may appear anywhere in the testament, the testator must sign the testament at the end of the testament. If anything is written by the testator after his signature, the testament shall not be invalid and such writing may be considered by the court, in its discretion, as part of the testament. The olographic testament is subject to no other requirement as to form. The date is sufficiently indicated if the day, month, and year are reasonably ascertainable from information in the testament, as clarified by extrinsic evidence, if necessary.

B. Additions and deletions on the testament may be given effect only if made by the hand of the testator.

Must be entirely written, dated and signed by the testator.

Prefer to write out the date – April 8, 1999Need an exact date for many reasons – especially if there is more than one will.

Dangers – potential for fraud.

Can be done without an attorney.Most litigation is about the subject of the will.

Problem if there is another handwriting in the will – example something penciled in by someone else. Now the will is no longer entirely written by the testator.Need to know if the testator approved the extra words. If the testator approved the extra words, then the entire will is invalid.If the extra words were added without the testator’s approval or knowledge, then treat those words as if never written.

The signature ends the will, if anything is written below the signature the testament is valid. The court in its discretion may consider this as part of the testament.

How definite does the date have to be?Thanksgiving is definite; Easter varies by religion so no certain date.The date is sufficiently written if the day, month and year are reasonably ascertainable from information in the testament, as clarified by extrinsic evidence, if necessary.The testator can write the date anywhere, use ink or pencil, print or script.Don’t need witnesses.

Additions and deletions on the testament may be given effect only if made by the hand of the testator.Testator should probably initial a deletion or addition.

Hamilton v. KellyUncle’s olographic will left his nephew everything.Uncle’s brothers and sisters removed the signature from the will.

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Removal of the signature didn’t invalidate the will.The brothers and sisters had a duty to present the will to the court.Nephew found the will 25 years after his uncle’s death. He had 1 year from the discovery of the will to go to court.

In the La. Code of Civil Procedure you are given ways to do things. If the heirs think there is a will, they can get a notary upon a court order to search for a will. If someone has the will and doesn’t come forward, they are in contempt of court.

Problem 15-13 Monday 8, 1968 this is not a certain date because the month isn’t identified.If there is a valid date then it would be an olographic will.Court – this isn’t a certain date, so no valid will.

Succession of BurkeIs this a valid olographic will?Testator used a preprinted statutory will and added his own writing. Show intent to create a will.All of the dispositions were in the testator’s own hand and was dated properly.The language used showed his intention to give his sister his property.Signed at the end.Court – this is a valid will and the preprinted language can be ignored.

Notarial Testaments Art 1576 – 1580.1

These are like the old statutory will.The 1997 revision put the statutory will in the code and renamed it a notarial will.

There are 2 parts to a notarial will:1 substantive part2 attestation clause

Need a notary and 2 witnesses.Testator must sign every page and at the end.

Art 1576 Notarial testament A notarial testament is one that is executed in accordance with the formalities of Art 1577 – Art 1580.1.

Art 1577 Requirements of formThe notarial testament shall be prepared in writing and dated and shall be executed in the following manner. If the testator knows how to sign his name and to read and is physically able to do both, then:

1 In the presence of a notary and 2 competent witnesses, the testator shall declare or signify to them that the instrument is his testament and

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shall sign his name at the end of the testament and on each other separate page.

2 In the presence of the testator and each other, the notary and the witnesses shall sign the following declaration, or one substantially similar: “In our presence the testator has declared or signified that this instrument is his testament and has signed it at the end and on each other separate page, and in the presence of the testator and each other we have hereunto subscribed our names this __________ day of _________, ________.”

Art 1577 applies only when the testator knows how to sign his name and read and is physically able to do both.

Testator must declare or signify that this is his will.Must sign name at the end and on each page.

Want a witness that will still be around at the time the will is probated.

Seeing and reading is not the same as signing your name.

Art 1578 Notarial testament; testator literate and sighted but physically unable to signWhen a testator knows how to sign his name and to read, and is physically able to

read but unable to sign his name because of a physical infirmity, the procedure for execution of a notarial testament is as follows:

1 In the presence of the notary and 2 competent witnesses, the testator shall declare or signify to them that the instrument is his testament, that he is able to see and read but unable to sign because of a physical infirmity, and shall affix his mark where his signature would otherwise be required; and if he is unable to affix his mark he may direct another person to assist him in affixing a mark or to sign his name in his place. The other person may be one of the witnesses or the notary.

2 In the presence of the testator and each other, the notary and the witnesses shall sign the following declaration, or one substantially similar: “In our presence the testator has declared or signified that this is his testament, and that he is able to see and read and knows how to sign his name but is unable to do so because of a physical infirmity; and in our presence he has affixed or caused to be affixed, his mark or name at the end of the testament and on each other separate page, and in the presence of the testator and each other, we have subscribed our names this ______ day of _______, _________.”

Testator affixes his mark if possible, if not he can direct another person to sign.

Succession of SquiresThe testator initialed the pages, but didn’t sign them. His full signature was at the end.The attestation clause failed to say that the testator signed in the presence of the notary and the witnesses.

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The court upheld the will because of clear intent and the lack of fraud, and the initialed pages.Succession of HollowayNo date on the testament, therefore the will was invalid.

Succession of RonigerThe testament was dated after the death of the testator, however extrinsic evidence showed that the testator messed up on the date.The court allowed the will to stand.

Art 1579 Notarial testament; testator unable to readWhen a testator does not know how to read, or is physically impaired to the extent that he cannot read, whether or not he is able to sign his name, the procedure for execution of a notarial testament is as follows:1. The written testament must be read aloud in the presence of the testator, the

notary, and two competent witnesses. The witnesses, and the notary if he is not the person who reads the testament aloud, must follow the reading on copies of the testament. After the reading, the testator must declare or signify to them that he heard the reading, and that the instrument is his testament. If he knows how, and is able to do so, the testator must sign his name at the end of the testament and on each other separate page of the instrument.

2. In the presence of the testator and each other, the notary and witnesses must sign the following declaration, or one substantially similar: “This testament has been read aloud in our presence and in the presence of the testator, such reading having been followed on copies of the testament by the witnesses [and the notary if he is not the person who reads it aloud,] and in our presence the testator declared or signified that he heard the reading, and that the instrument is his testament, and that he signed his name at the end of the testament and on each other separate page; and in the presence of the testator and each other, we have subscribed our names this ____ day of _____, _______.

3. If the testator does not know how to sign his name or is unable to sign because of a physical infirmity, he must so declare or signify and then affix his mark, or cause it to be affixed, where his signature would otherwise be required; and if he is unable to affix his mark he may direct another person to assist him in affixing a mark or to sign his name in his place. The other person may be one of the witnesses or the notary. In this instance, the required declaration must be modified to recite in addition that the testator declared or signified that he did not know how to sign his name or was unable to do so because of a physical infirmity; and that he affixed, or caused to be affixed, his mark or name at the end of the testament and on each other separate page.

4. A person who may execute a testament authorized by either Art 1577 or 1578 may also execute a testament authorized by this Article.

Unable to read or cannot read because of physical impairment.Read aloud to the testator in the presence of the 2 witnesses & the notary & the testator.Witnesses & notary must follow on a copy.

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Testator must signify that it is his testament.

Art 1580 Notarial testament in Braille formA testator who knows how to and is physically able to read Braille, may execute a notarial testament according to the following procedure:1. In the presence of a notary and two competent witnesses, the testator must

declare or signify that the testament, written in Braille, is his testament, and must sign his name at the end of the testament and on each other separate page of the testament.

2. In the presence of the testator and each other, the notary and witnesses must sign the following declaration, or one substantially similar: “In our presence the testator has signed this testament at the end and on each other separate page and has declared or signified that it is his testament; and in the presence of the testator and each other we have hereunto subscribed our names this _____, day of _______, ______.

3. If the testator is unable to sign his name because of a physical infirmity, he must so declare or signify and then affix, or cause to be affixed, his mark where his signature would otherwise be required; and if he is unable to affix his mark he may direct another person to assist him in affixing a mark, or to sign his name in his place. The other person may be one of the witnesses or the notary. In this instance, the required declaration must be modified to recite in addition that the testator declared or signified that he was unable to sign his name because of a physical infirmity; and that he affixed, or caused to be affixed, his mark or name at the end of the testament and on each other separate page.

4. The declaration in the notarial testament in Braille form must be in writing, not in Braille.

No requirement for visual impairment, must know how to read Braille.

Art 1580.1 Deaf or deaf and blind notarial testament; form; witnessesA. A notarial testament may be executed under this Article only by a person who

has been legally declared physically deaf or deaf and blind and who is able to read sign language, Braille, or visual English.

B. The notarial testament shall be prepared and shall be dated and executed in the following manner:

a. In the presence of a notary and two competent witnesses, the testator shall declare or signify to them that the instrument is his testament and shall sign his name at the end of the testament and on each other separate page of the instrument.

b. In the presence or the testator and each other, the notary and the witnesses shall then sign the following declaration, or one substantially similar: “The testator has signed this testament at the end and on each other separate page, and has declared or signified in our presence that this instrument is his testament, and in the presence of the testator and

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each other we have hereunto subscribed our names this _____ day of _____, ______.”

C. If the testator is unable to sign his name because of a physical infirmity, the testament shall be dated and executed in the following manner:

a. In the presence of a notary and two competent witnesses, the testator shall declare or signify by sign or visual English to them that the instrument is his last testament, that he is unable to sign because of a physical infirmity, and shall then affix his mark at the end of the testament and on each other separate page of the instrument.

b. In the presence of the testator and each other, the notary and the witnesses shall then sign the following declaration, or one substantially similar: “The testator has declared or signified by sign or visual English that he knows how to sign his name but is unable to sign his name because of a physical infirmity and he has affixed his mark at the end and on each other separate page of this testament, and declared or signified in our presence that this instrument is his testament and in the presence of the testator and each other we have hereunto subscribed our names this _______ day of ________, ______.”

D. The attestation clause required by Subparagraphs B (2) and C (2) shall be prepared in writing.

E. (1). A competent witness for the purpose of this Article is a person who meets the qualifications of Articles 1581 and 1582, and who knows how to sign his name and to read the required attestation clause, and is physically able to do both. At least one of the witnesses to the testament shall also meet the qualifications of a certified interpreter for the deaf as provided for in R.S. 46:2361 et seq.(2). The testator shall be given the choice of accommodation services afforded by the use of large print, Braille, or a tactile interpreter.

Need a legal declaration of deafness or deafness and blindness.Must be able to read sign language, Braille, or visual English.

Competency of witnesses Article 1581 –1583

Witnesses must meet certain qualifications.

Art 1581 Persons incompetent to be witnessesA person cannot be a witness to any testament if he is insane, blind, under the age of 16, or unable to sign his name. A person who is competent but deaf or unable to read cannot be a witness to a notarial testament under Art. 1579.

Cannot be a witness if:

InsaneBlind< 16 years oldUnable to sign name

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What happens if a will is prepared and 1 witness is a legatee under the will?

Art 1582 Effect of witness or notary as legateeThe fact that a witness or the notary is a legatee does not invalidate the testament. A legacy to a witness or the notary is invalid, but if the witness would be an heir in intestacy, the witness may receive the lesser of his intestate share or the legacy in the testament.

Hypo:You have 5 kids. 1 kid is a witness to the will. The will leaves one child out.

The other 4 each get ¼.

X / / | \ \ A B C D¹ E

D is the witness, and E is left out. D would get 1/5, the lesser of the legacy or the intestate portion.

Art 1583 Certain designations not legaciesThe designation of a succession representative or trustee, or an attorney for either of them, is not a legacy.

Succession of WallaceAttorney was named as the attorney for the executrix.Attorney gets about 3% of the estate as a fee. Prior to the time of this case the testator could name the attorney and even if the attorney wasn’t used he had to be paid.The case deals with disciplinary rule 1.16(a)(3) – the attorney must withdraw when fired by the client.The case discusses Rivet v. Battistella – court said naming of the attorney in the will is binding. This is an allowable charge and the attorney couldn’t be fired. This is the exception to the rule that the client could fire an attorney at any time.Succession of Jenkins overrules Rivet because of problems with naming the attorney in the will – this is soliciting future business, guarantees future fees, may change estate planning tactics.

In a lot of cases the attorney just named himself in the will.

After Jenkins the legislature passes RS 9:2448 – executor can only remove the named attorney for just cause.

Issue in Wallace – can the legislature supersede the rule that the client can discharge the attorney at any time.Today a will can name the attorney, but it is not binding.

It is the Supreme Court’s power to discipline attorneys.

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Now there is a conflict between the disciplinary rule and state law.

Attorney can’t represent the dead client, can’t communicate w/the dead, don’t have a person w/ legal rights.

The attorney represents the executor.

Types of legacies Articles 1584-1604

Old types of legacies: Don’t need to know for the exam1. Universal – got all of the estate or a potential of getting the whole (vocation), this is still pretty much the same now.2. Under universal title – legatees get a % of the property3. Particular – legacy didn’t fit either of the above categories.

New types of legacies Art 1584 – 1586

Classify legacies so that the rules can be applied – who to pay first, what to do when the legacy lapses, who pays the debts.

Under the new rules it is easier to label, but the rules of who pays the debts and who gets paid first have changed.

Art 1584 Kinds of testamentary dispositionsTestamentary dispositions are particular, general, or universal.

Art 1585 Universal legacyA universal legacy is a disposition of all of the estate, or the balance of the estate that remains after particular legacies.A universal legacy may be made jointly for the benefit of more than one legatee without changing its nature.

If a particular legacy is followed by a residuary legacy, then the residuary legacy is rendered a universal legacy.

Art 1586 General legacyA general legacy is a disposition by which the testator bequeaths a fraction or a certain proportion of the estate, or a fraction or a certain proportion of the balance of the estate that remains after particular legacies. In addition, a disposition of property expressly described by the testator as all, or a fraction or a certain proportion of one of the following categories of property, is also a general legacy: separate or community property, movable or immovable property, or corporeal or incorporeal property. This list of categories is exclusive.

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Succession of BurnsideThe will gives particular legacies of money, and the residue of the property to the executor. The executor is a universal legatee.Some of the particular legacies lapsed, thus they accrete to the executor.

If a general legacy is followed by a residual, then the residual is universal. Ex: I give my house to A, 1/3 B, the rest to C. C is a general legatee.

If there is a general legacy, then by definition, you can’t have a universal legacy in the same testament.If A leaves all property to B, C, and D jointly the legacy is universal. If B predeceases A, then the property would go to C & D.

A leaves all community property to X – this is a general legacy.

A leaves ¼ of all property to X – this is a general legacy.

A leaves all immovable to X – this is a general legacy.

A leaves usufruct to X – this is a particular legacy.

A leaves all corporeal movables to X – this is a particular legacy.

A leaves all of his stocks and bonds to X – this is all of A’s separate property; this is still a particular legacy because the stocks and bonds are incorporeal movables.

Look at how the legacy is phrased in the will. To be a general legacy it must follow phrasing of 1586 or it is a particular legacy.

Art 1587 Particular legacyA legacy that is neither general nor universal is a particular legacy.

This is not always easy to spot.

A gives ½ of his farm to B, and ½ to C – this is a particular legacy.

A leaves the usufruct of the farm to B – this is a particular legacy.

First – ask it is universal, if no, then ask is it general, if no then it is particular.

Must also determine if the legacy is joint or separate.Conjoint = jointA separate legacy assigns shares; a joint legacy doesn’t assign shares.

Art 1588 Joint or separate legacy

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A legacy to more than one person is either joint or separate. It is separate when the testator assigns shares and joint when he does not. Nevertheless, the testator may make a legacy joint or separate by expressly designating it as such.

Comment B – doesn’t overrule Lambert and share and share alike are used.

I leave my house to A and B – joint. If A predeceases me, B gets the house.

I leave ½ of my house to A and ½ to B. If A predeceases me, the legacy lapses.

A leaves his house to B, C, and D, share and share alike. B doesn’t want his share. What are the possibilities? Do C and D get it, does B’s share go intestate, or to B’s kids?Share and share alike may not mean joint.

Share & share alike (Lambert)Share equally (McCaron)To be divided equally among them (Hopson)Do these mean the same thing?Ask, are legatees siblings or a child of the testator, or a descendant of the testator’s sibling or child.

Art 1589 Lapse of legaciesA legacy lapses when:

1. The legatee predeceases the testator.2. The legatee is incapable of receiving at the death of the testator.3. The legacy is subject to a suspensive condition, and the condition can

no longer be fulfilled, or the legatee dies before fulfillment of the condition.

4. The legatee is declared unworthy.5. The legacy is renounced, but only to the extent of the renunciation.6. The legacy is declared invalid.7. The legacy is declared null, as for example, for fraud, duress, or undue

influence.

Art 1590Testamentary accretionTestamentary accretion takes place when a legacy lapses.Accretion takes place according to the testament, or, in the absence of a governing testamentary provision, according to the following articles.

Art 1591 Accretion of particular and general legaciesWhen a particular or a general legacy lapses, accretion takes place in favor of the successor who, under the testament, would have received the thing if the legacy had not been made.

A leaves his house to X. X predeceases. If there hasn’t been a vulgar substitution and there is a universal legatee, then the universal legatee gets the house.

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Art 1592 Accretion among joint legateesWhen a legacy to a joint legatee lapses, accretion takes place ratably in favor of the other joint legatees, except as provided in the following Article.

A, B & C are joint legatees. A’s legacy lapses. B & C each get ½ of A’s legacy.

Art 1593 Exception to rule of testamentary accretionIf a legatee, joint or otherwise, is a child or sibling of the testator, or a descendant of a child or sibling of the testator, then to the extent that the legatee’s interest in the legacy lapses, accretion takes place in favor of his descendants by roots who were in existence at the time of the decedent’s death. The provisions of this Article shall not apply to a legacy that is declared invalid or declared null for fraud, duress, or undue influence.

X leaves all of his property to A, B, and C. A predeceases X. If A is X’s sibling or X’s child, and A had descendant’s, the descendants would take A’s interest.

X leaves all of his property to his 2 sisters and 1 brother. A sister predeceases X and she had 2 children. Her children will takes her share because A was X’s sister.X leaves his property to his friends A, B, and C. A predeceases X or renounces and A had 2 kids. A’s kids don’t take because A is not a sibling or child of X. If the legacy is joint, then B & C get A’s share. If it is not a joint legacy, and the will doesn’t say who will take, then the legacy lapses.

Descendants must exist at the time of the decedent’s death.

What if A renounces, should the rule be the same? Under the new rule, treat the same if A is a sibling or child or sibling or child’s descendants.

Under the new rule, if a sibling or a child of the testator renounces, then the sibling or the child’s descendants take.

Art 1593 applies to joint or separate legacies.

If there is a joint legacy and one of the joint legatees is the sister of the testator and she predeceases the testator, her legacy goes to her descendants.

Joint universal legacies follow this rule also.

A gives house to B, C, and D jointly, and gives the residuum to B, C, and D jointly. B predeceases the testator. Want to know if B is related to A (either a child or sibling of A). If B is related, you want to know if B has descendants, if he does, they get the B’s interest. This will also apply to the residuum.

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Same as above but B is not a child or sibling. C and D get B’s interest in both the house and the residuum because they are joint legatees.

Applies to all lapses, make no distinction for renunciation of the legacy. If B renounces, the results are the same because of the 2001 amendments.

Art 965 Accretion upon renunciation in testate successionsIn the absence of a governing testamentary disposition, the rights of a testate successor who renounces accrete to those persons who would have succeeded to them if the legatee had predeceased the decedent.

Art 1595 Accretion to universal legateeAll legacies that lapse, and are not disposed of under the preceding Articles, accrete ratably to universal legatees.When a general legacy is phrased as a residue or balance of the estate without specifying that the residue or balance is the remaining fraction or a certain portion of the estate after the other general legacies, even though that is its effect, it shall be treated as a universal legacy for purposes of accretion under this Article.

Can’t have a general and universal legacy in the same will.

I leave 1/3 of my property to A, the remainder to B – this is a general legacy to B and A.If A can’t take, does B pick up? Yes, treat B as a universal legatee.

I give 10% to A, 90% to B – this is a general legacy. A dies first, thus the legacy lapses. If A is a friend go to the laws of intestacy.

I leave 10% to A, rest to B – this is a general legacy. A is a friend, but predeceases me; the lapsed legacy would go to B, because B is treated as a universal legatee.

The difference in the above 2 hypos is the use of the word “rest.”

10% to Mary (friend), 90% Loyola and Mary predeceases me, then her 10% goes intestate.

90% to Mary (friend), the rest to Loyola and Mary predeceases. Mary’s 90% goes to Loyola.

90% to Mary (daughter), 10% to Loyola and Mary predeceases me, and if Mary had kids, then her 90% goes to them.

90% to Mary (daughter), rest to Loyola and Mary predeceases and has kids, then her kids take. If Mary didn’t have kids, then Loyola would take.

I leave all my community property to Mary, all the rest to Sue – both legacies are general. If Mary predeceases, Sue picks up because of the 2nd paragraph of Art 1595.

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All my corporeal movables – particular legacy.

I leave all my community property to Mary, the balance to Sue. If Sue predeceases, follow the intestate rules.

Succession of DougartAt the time of this case parents were forced heirs.Testator’s will left 1/3 of his property to his parent (general legacy), the usufruct over the balance of his property to his wife (general), and naked ownership to his nieces and nephew (particular). The parent died before the testator.When the legacy to the parent lapsed who picks up?The nieces and nephew are particular legatees, the wife is a general legatee, and the parent was a general legatee. Art. 1595 doesn’t apply because of the particular legacy.Follow rules of intestate successions.Can’t have a general and universal legacy in the same will.

Art 1597 Loss, extinction, or destruction of property givenA. A legacy is extinguished to the extent that property forming all or part of the

legacy is lost, extinguished, or destroyed before the death of the testator. However, the legatee is entitled to any part of the property that remains and to any uncollected insurance proceeds attributable to the loss, extinction, or destruction, and to the testator’s right of action against any person liable for the loss, extinction, or destruction.

B. A legacy of a certain object is not extinguished when the object of the legacy has been transformed into a similar object without an act of the testator.

C. If the object of the legacy has been condemned or expropriated prior to the testator’s death, the legatee is entitled to any uncollected award and to succeed to any right of action concerning the condemnation or expropriation.

The will left a legacy of an apartment building to a friend. Before the testator dies, the apartment building is destroyed by fire. The apartment building was covered by insurance. The legatee gets the insurance proceeds, if the testator has not spent the proceeds. But if the testator sells the apartment before his death, the legatee doesn’t get the proceeds because by selling the apartment building the testator’s intent has changed.

If I give stock in a will and it has been transformed into a similar object, without an act of the testator, then part B of 1597 applies.

I leave commercial property to A, the property is rezoned, and A still gets the property because the change wasn’t caused by me.

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Art 1598 Right of legatees to fruits and productsAll legacies, whether particular, general, or universal, include the fruits and products attributable to the object of the legacy from the date of death, but the right of any legatee to distribution under this Article is subject to administration of the succession.Nevertheless, the legatee of a specified amount of money is entitled to interest on it, at a reasonable rate, beginning one year after the testator’s death, but the executor may, by contradictory proceedings with the legatee and upon good cause shown, obtain an extension of time modification with regard to payment of interest to begin to accrue and for such other modification with regard to payment of interest as the court deems appropriate. If, however, the legacy is subject to a usufruct for life of a surviving spouse or is held in trust subject to an income interest for life, to or for the benefit of a surviving spouse, the spouse shall be entitled to interest on the money from the date of death at a reasonable rate.

If the legacy is for a specific amount of money, the legatee gets the money & a reasonable rate of interest, beginning 1 year after the testator’s death. This period may be extended upon a showing of good cause, and if the court deems it appropriate. The interest that accrues during the first year falls to the residuum. The testator can change the period.

An income interest for life is like a usufruct.

Taking the interest away from a surviving spouse removes the IRS’s marital deduction.

Art 1599 Payment of legacies, preference of paymentIf the testator has not expressly declared a preference in the payment of legacies, the preference shall be governed by the following Articles.

Art 1600 Preference of payment among particular legaciesA particular legacy must be discharged in preference to all others.

Pay the particular legatees first.

I leave to my 3 nieces $50,000 each and the rest to my husband. The estate is worth $160,000, thus $10,000 is left for the husband.

Art 1601 Preference of payment among particular legaciesIf the property remaining after payment of the debts and satisfaction of the legitime proves insufficient to discharge all particular legacies, the legacies of specific things must be discharged first and then the legacies of groups and collections of things. Any remaining property must be applied toward the discharge of legacies of money, to be divided among the legatees of money in proportion to the amounts of their legacies. When a legacy of money is expressly declared to be in recompense for services, it shall be paid in preference to all other legacies of money.

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If you can’t take care of all particulars, take care of the ones getting something specific first.

I give my diamond brooch to A, the rest of my jewelry to B, the residuum to B. A gets the brooch first, if there is no other jewelry B is out.

Money, if to recompense for services, is paid before other legacies of money, even if a debt plus a donation.

Art 1602 Discharge of an unsatisfied particular legacyIntestate successors and general and universal legatees are personally bound to discharge an unpaid legacy, each in proportion to the part of the estate that he receives.

The universal legatee gets extra stuff if it is there. If there is not enough to go around, the particulars get paid first.

Art 1604 Discharge of legacies, limitations of liabilityIn all the foregoing instances, a successor who is obligated to discharge a legacy is personally liable for his failure to do so only to the extent of the value of the property of the estate that he receives, valued as of the time of receipt. He is not personally liable to other successors by way of contributions or reimbursements for any greater amount.

There is limited liability for a successor who had to discharge to someone else.

I give movables, which includes stocks, to B. A later codicil is found and stocks are given to C. B is only liable for the value of the stocks at the time he received them.

Problem 2 page 15-30The remainder of movables left to Dr. Hymel is a general legacy. If a particular legacy of a movable lapses Dr. Hymel picks up because he got the remainder of the movables.

I leave all my books to X, except one book if for Y. Y predeceases me. X picks up the book to Y because of the charge on him to pick up all the books and to give one book to Y.

Joint or separate legaciesI give to A, B, and C jointly. A predeceases me. B & C pick up unless A is a child or sibling, then Art 1593 kicks in.

Succession of Lambert Noncupative will by public actTestator never married, he had 2 living brothers and 1 brother that predeceased him. The predeceased brother had 1 living child.

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X² / | \ A B C¹

| D

The testator’s will left A & C the residue, share and share alike. B received $10,000.There was a problem with the use of the phrase share and share alike.At the time of this case there was no provision that a child of a predeceased sibling would represent the parent. Share and share alike = separate legacies, and the predeceased brother’s legacy must follow the rules of intestacy. Today under Art 1593 the child of the predeceased brother would represent and the legacy would go to him.

Comment B to Art 1588 – Lambert is not overruled.

Succession of McCarronJoseph----McCarron²----Merlin¹

/ \ Merlin JanethMcCarron never married. She left an olographic will in which she left all of her property to her 2 brothers to be shared equally. The niece and nephew bring suit to be recognized as owners. They argue gave separate legacies, not joint. Thus the legacy to their father lapsed and falls to the intestate heirs. No Art 1593 at this time.Issue – to be shared alike – is this a joint or separate legacies?Court – this is a separate legacy, so share. Merlin’s ½ is treated as follows: Joseph 1/2, Merlin 1/4, Janeth ¼ (or of the whole ¼, 1/8, 1/8)Today don’t worry about this language because the predeceased brother had kids and his ½ automatically goes to them.

Can share and share alike in a joint legacy.

If there is no expression that it is a joint legacy, then it is a separate legacy.

Avoid the use of terms such as share and share alike, share equally. If you mean separate, then use fractions or percentages.

Hopson v. RatcliffDecedent didn’t have any forced heirs; she had a sister, 4 nieces and 1 grandniece.Olographic will was written while the sister was still alive, but the sister predeceased the testator.The will left the sister a particular legacy, and because the legacy lapsed, this particular legacy goes to the residuum.

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The will left a universal legacy to the sister and 3 nieces to be divided equally among them.Today the sister’s universal and particular legacy would go to her kids (Art 1593).The house was a particular legacy, and because the sister predeceased, it goes to the residuum.Issue – was the residuum joint or separate?Will used the term “to be divided equally among them”. Court must figure out the testator’s intent.If separate and the sister had no children, the universal residuum goes intestate. If joint, then the residuum goes to the 3 nieces.

For a lapsed legacy, must determine if it is a joint or separate legacy.

Probate of testaments Art 1605

Art 1605 Probate of testamentA testament has no effect unless it is probated in accordance with the procedures and requisites of the Code of Civil Procedure.

Revocation of Testaments and Legacies Art 1606 – 1610.1

Art 1606 Testator’s right of revocationA testator may revoke his testament at any time. The right of revocation may not be renounced.

Did the testator change his mind in a legally effective way?

Art 1607 Revocation of the entire testament by the testatorRevocation of an entire testament occurs when the testator does any of the following:

1. Physically destroys the testament, or has it destroyed at his direction.2. So declares in one of the forms prescribed for testaments or in an

authentic act.3. Identifies and clearly revokes the testament by a writing that is entirely

written and signed by the testator in his own handwriting.

Succession of MuhThe olographic will was found in a locked drawer, the seals had been broken and there were scratch outs of legacies and his signature.Is this a revocation?Old code – to revoke you need testamentary form in a writing, this is express revocation, or a tacit revocation by writing a new will, and using language that this will revokes prior wills.At this time there was no revocation by mutilation.The legatees contended the code requires more than mutilation because the code doesn’t mention this.

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Court – looked to the French case law, found scratch outs to be sufficient & the court was convinced that the testator made the scratch outs. Mutilation is a form of revocation.Art 1607 applies – physical destruction.

Succession of MelanconMelancon tried to revoke his will, but didn’t date it.If the will is olographic, accept it.If the will is notarial, write I revoke after the signature and then sign again.Is there a revocation when there is no date?Court – no revocation without a date. This is why there is a 3rd part to Art 1607 in the code.

Must know what you are revoking and be clear.

Art 1608 Revocation of a legacy or other testamentary provisionRevocation of a legacy or other testamentary provision occurs when the testator:

1. So declares in one of the forms prescribed for testaments.2. Makes a subsequent incompatible testamentary disposition or

provision.3. Makes a subsequent inter vivos disposition of the thing that is the

subject of the legacy and does not reacquire it.4. Clearly revokes the provision or legacy by a signed writing on the

testament itself.5. Is divorced from the legatee after the testament is executed and at the

time of his death, unless the testator provides to the contrary. Testamentary designations or appointments of a spouse are revoked under the same circumstances.

A leaves her husband all her property. A divorces him, then dies before changing her will. The presumption is that the husband shouldn’t take. This requires that you be divorced after the testament and still be divorced at the time of the testator’s death.

Problem page 15-39 based on Succession of Willis v. McKeithen – will leaves fractional portion of oil and gas royalties, remainder to Mrs. McKeithen. The legacies of the mineral royalties are particular because it isn’t a fraction or a certain proportion of the estate, nor is it a fraction or proportion of the balance of the estate that remains after the particular legatees are paid.

Smith v. Shaw3 different wills:

1st is a valid olographic 2nd is a nuncupative by public act – messed up, defective as to form3rd is a nuncupative by public act – also messed up, also defective as to form

The olographic will was destroyed by the testator (torn up).The 2nd will revoked the olographic will, but b/c of the defect this will wasn’t valid.P’s argue the olographic will s/be probated.

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The doctrine of relative revocation (accepted by common law states) – revocation of the first will is conditioned on the second will being valid. Even though physically destroyed, the first will would stand. La. doesn’t do this – presume the later will reflects the intent of the testator.Decedent wanted to die testate.Can’t probate a will that doesn’t exist.B/c there is no will the rules of intestacy must be followed.If the olographic will hadn’t been destroyed, then it would have been probated b/c the will must be in existence at the time of death and a will is not effective until death.

Succession of BagwellA statutory will was written first.The testator then goes to an attorney to change it.What to do when a will that was in the possession of the testator can’t be found?Could presume the testator destroyed the will, or maybe someone else destroyed it. This would overcome the presumption that the testator destroyed the will. Would need clear and convincing proof that someone else destroyed the will w/o consent, direction, or permission of the testator.

Succession of Justice1978 will – statutory will – left community property to her husband, separate property to her son and grandson.1990 – notarial will – but on a printed form from another state, contained language revoking the prior will. This will leaves out the son, and increases the gift to the grandson. This will was null b/c the form was wrong.A copy of the 1978 will was filed and entered into probate. This copy was with the attorney.Testator is presumed to have destroyed the 1978 will.The invalid will is proof that she didn’t want to die intestate.Trial court – 1978 will was invalid b/c of the disappearance of the 1978 will and the language in the 1990 will revoking the 1978 will. Disappearance is a tacit revocation.The testator thought she revoked the 1978 will. The 1990 will wasn’t an express revocation b/c the will was invalid, but it does show her intent to revoke.Court – follow rules of intestacy.

Hypo:I write a will and leave my car to Mary – this will is valid.1 year later I write a new will and leave my house to John.1 year after this I write a new will and leave my diamond watch to Sue. I die after I write these 3 wills.What to do? Probate all 3 wills.

Change a few facts, the first 2 wills are the same, but the 3rd will is written as follows:

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“This is my last will and testament. I leave all my property to Sue.” The court will look at all the wills. Sue will get everything, and Mary and John are out b/c of the conflict with the intent to give everything to Sue. This is a tacit revocation.

If, instead I had said that I leave everything to Sue, except for the prior dispositions, then Mary and John would still take the car and house, and Sue would get everything else.

Succession of BerdonThe will disposes of 850 shares of Whitney National Bank stock; a codicil disposes of 1200 shares of the same stock. Testator died owning 775 shares. What to do?Codicil is a later expression of the testator’s intent, and it is inconsistent with the first expression (will).Court – the codicil doesn’t revoke the earlier disposition. Do a proportional distribution.

Succession of HuguetProblem here is that the testator transferred the property to a partnership.A sale or donation of property is a tacit revocation.The testator exchanged the property for a partnership interest.Court – this is a change in the form of the property and a revocation of the disposition of the property.

Succession of Dembley1st olographic will was revoked by the 2nd olographic will. The 2nd will was later destroyed: this “revives” the first will. So probate the 1st will.This is not a real revival b/c a will is not effective until the time of the testator’s death.The 2nd will didn’t exist at the time of the death, so it was never in effect.

Interpretation of Legacies Art 1611-1616

Art 1611 Intent of the testator controlsA. The intent of the testator controls the interpretation of his testament. If the

language of the testament is clear, its letter is not to be disregarded under the pretext of pursuing its spirit. The following rules apply only when the testator’s intent cannot be ascertained from the language of the testament. In applying these rules, the court may be aided by any competent evidence.

B. When a testator uses a term the legal effect of which has been changed after the date of execution of the testament, the court may consider the law in effect at the time the testament was executed to ascertain the testator’s intent in the interpretation of a legacy or other testamentary provision.

Succession of McAuleyThe olographic will had a contingency clause.Court – only apply the contingency clause in the narrow circumstances.

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Art 1612 Preference for interpretation that gives effectA disposition should be interpreted in a sense in which it can have effect, rather than in one in which it can have none.

Art 1613 Mistake in identification of object bequeathed

If the identification of an object given is unclear or erroneous, the disposition is nonetheless effective if it can be ascertained what object the testator intended to give. If it cannot be ascertained whether a greater or lesser quantity was intended, it must be decided for the lesser.

Art 1614 Interpretation as to after acquired propertyAbsent a clear expression of a contrary intention, testamentary dispositions shall be interpreted to refer to the property that the testator owns at his death.

Art 1615 Contradictory provisionsWhen a testament contains contradictory provisions, the one written last prevails. Nonetheless, when the testament contains a legacy of a collection or a group of objects and also a legacy of some or all of the same objects, the legacy of some or all of the objects prevails.

Art 1616 Legacy to creditorA legacy to a creditor is not applied toward satisfaction of the debt unless the testator clearly so indicates.

Marital Portion Art 2432-2437This is not really community property, you get marital portion whether or not you are in a community property regime or a separate property regime.It is for the surviving spouse, when the deceased dies rich.Other payments satisfy the marital portion.

Art 2432 Right to marital portionWhen a spouse dies rich in comparison with the surviving spouse, the surviving spouse is entitled to claim the marital portion from the succession of the deceased spouse.

Art 2433 Incident of marriage; charge on the successionThe marital portion is an incident of any matrimonial regime and a charge on the succession of the deceased spouse. It may be claimed by the surviving spouse, even if separated from the deceased, on proof that the separation occurred without his fault.

Art 2434 QuantumThe marital portion is ¼ of the succession in ownership if the deceased died without children, the same fraction in usufruct for life if he is survived by 3 or fewer children, and a child’s share if he is survived by more than 3 children. In

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no event, however shall the amount of the marital portion exceed on million dollars.

Art 2435 Deduction of legacyA legacy left by the deceased to the surviving spouse and payments due to him as a result of the death are deducted from the marital portion.

Art 2436 Nonheritable rightThe right of the surviving spouse to claim the marital portion is personal and nonheritable. This right prescribes 3 years from the date of the death.

Art 2437 Periodic allowanceWhen, during the administration of the succession, it appears that the surviving spouse will be entitled to the marital portion, he has the right to demand and receive a periodic allowance from the succession representative.The amount of the allowance is fixed by the court in which the succession proceeding is pending. If the marital portion, as finally fixed, is less than the allowance, the surviving spouse is charged with the deficiency.

Succession of LichentangThe net value of the estate was 1.4 million dollars.The will left the wife a usufruct, the rest was in trust, and she gets the income from the trust.She renounced her interest in the succession and she claims the marital portion.The marital portion would give her more control than the usufruct that was left to her.Court – credit the value of the legacy left to her against the ¼ marital portion.To do this the dollar value of the usufruct must be estimated.

VII Trusts in Louisiana La. R.S. 9:1721-2252; La. C.C. 1520

La. – reluctant to pick up on trust b/c it was a common law concept.

1882 – charitable trusts were allowed1920 – private trusts were allowed, not to exceed 10 years from the death of the testator.1938 – La. Trusts and Estate Act – not well integrated with La. law 1964 – Trust Code (to fit w/ La. law)

La. R.S. 9:1721-9:2252 (most of this is from the 1964 Trust Code)Gave more control to the testator about how property is to be administered, tax advantages, restrict use or payment, allows direction for use, allows you to use mechanisms to take care of a person incapable of taking care of themselves or the property.

Problems – idea of splitting ownership. Trust creates a different kind of interest.Who actually gets the property and when does their interest vest?Shifting the rules of prohibited substitutions.

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Could do the same thing w/tutorship, curatorship, or legacies w/a charge. These are not the same, a trust gives the testator greater control.

La. R.S. 9:1731 defines trustA trust, as the term is used in this Code, is the relationship resulting from the transfer of title to property to a person to be administered by him as a fiduciary for the benefit of another.

Settlor→trustee (administers for the benefit of) / \

income principalbeneficiary beneficiary

La. R.S. 9:1732 Inter vivos and testamentary trustsA trust is either testamentary or inter vivos.

La. R.S. 9:1755 Acceptance by trusteeThe trustee may accept the trust in the trust instrument or in a separate instrument.

La. R.S. 9:1753 Technical language not required; interpretation of instrumentNo particular language is required to create a trust, but it must clearly appear that the creation of a trust is intended.A trust instrument shall be given an interpretation that will sustain the effectiveness of its provisions if the trust instrument is susceptible of such an interpretation.

La. R.S. 9:1752 Form of inter vivos trustAn inter vivos trust may be created only by authentic act or by act under private signature executed in the presence of two witnesses and duly acknowledged by the settlor or the affidavit of one of the attesting witnesses.

A trust must be in writing, either authentic act or act by private signature.

La. R.S. 9:1751 Form of testamentary trustA testamentary trust may be created only in one of the forms prescribed by the laws regulating donation mortis causa.

La. R.S. 9:1761 Settlor, definedA settlor is a person who creates a trust. A person who subsequently transfers property to the trustee of an existing trust is not a settlor.

La. R.S. 9:1762 Number of settlersThere may be one or more settlers of an inter vivos trust.

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La. R.S. 9:1781 Trustee definedA trustee is a person to whom title to the trust property is transferred to be administered by him as a fiduciary.

La. R.S. 9:1782 Number of trusteesThere may be one or more trustees of a trust.

La. R.S. 9:1783 Who may be a trusteeA. Only the following persons may serve as a trustee established pursuant to this

Code:1. A natural person enjoying full capacity to contract who is a citizen or

resident alien of the United States.2. A federally insured depository institution organized under the laws of

the La., another state, or of the United States, or a financial institution or trust company authorized to exercise trust or fiduciary powers under the laws of La. or the United States.

B. A nonprofit corporation or trust for educational, charitable, or religious purposes that is designated as income or principal beneficiary may serve as trustee of a trust for mixed private or charitable purposes.

Trustee must meet certain requirements:Natural person w/ full capacityCitizen or resident alienBank, fed insured depository institution (under either La law or US law)Nonprofit corp. can serve as trustee of a trust for mixed private or charitable purposes.

La. R.S. 9:1801 Beneficiary definedA beneficiary is a person for whose benefit the trust is created and may be a natural person, corporation, partnership, or other legal entity having the capacity to receive property. A trustee of a trust, in his capacity of trustee, can be the beneficiary of another trust. Neither the heir, legatee, or assignee of a designated beneficiary, nor a beneficiary by reason of a substitution under Subpart B of Part III of this chapter, is considered a beneficiary for the purpose of fixing the maximum allowable term of the trust.

La. R.S. 9:1803 Requirement that beneficiary be in being and ascertainableA beneficiary must be in being and ascertainable on the date of the creation of the trust, except as otherwise provided in this Code. An unborn child is deemed a person in being and ascertainable, if he is born alive.

Think class trust – grandchildren not yet born, this is done for another generation

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La. R.S. 9:1804 Settlor as beneficiaryA settlor may be the sole beneficiary of income or principal or both, or one of several beneficiaries of income or principal or both.

La. R.S. 9:1806 Concurrent beneficiariesThere may be several concurrent beneficiaries of income or principal or both.

La. R.S. 9:1808 Acceptance by beneficiaryA beneficiary need not accept the benefit conferred on him; his acceptance is presumed.

La. R.S. 9:1821 When testamentary trust createdA testamentary trust is created at the moment of the settlor’s death, without awaiting the trustee’s acceptance of the trust.

La. R.S. 9:1822 When inter vivos trust createdAn inter vivos trust is created upon execution of the trust instrument, without regard to the trustee’s acceptance.

La. R.S. 9:1771Trust property, general ruleProperty susceptible of private ownership, and an interest in such property may be transferred in trust.

Usufruct may be placed in trust.

La. R.S. 9:1881 Life insurance in trust, general ruleA settlor may create an inter vivos or testamentary trust upon the proceeds of life insurance.If a policy of life insurance is payable to a named beneficiary of the policy as trustee, the trust is an inter vivos trust and the instrument creating the trust shall be in the form required for an inter vivos trust. The trust is an inter vivos trust although the settlor reserves incidents of ownership with respect to the policy, although the settlor reserves the power to revoke or modify the trust, and although the trustee has no active duties to perform until the death of the settlor.If the policy of life insurance is payable to the settlor or to his succession or his succession representative, or to a testamentary trustee, the trust is testamentary, and the instrument creating the trust shall be in the form required for a testamentary trust.

Tutors have more control than a trustee b/c the settlor controls how the trustee handles the trust. The settlor can restrict and place periods when the money will be paid out.

La. R.S. 9:1931 Additions to trust property, general rule

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A settlor or any other person may make additions of property to an existing trust by donation inter vivos or mortis causa, with the approval of the trustee. The right to make additions may be restricted or denied by the trust instrument.

Ask if it is ok for someone to add to the trust – donation inter vivos or mortis causa.

La. R.S. 9:1932 FormAn addition of property to an existing trust must be made and accepted in the form required for such a donation.

La. R.S. 9:1933 Rights of persons who adds propertyA person who adds property to an existing trust cannot acquire the rights of a settlor by virtue of the transfer, but the addition is subject to the general law of donations.

The legitime in trust La. R.S. 9:1841-1847Memorize the restrictions on the legitime.

La. R.S. 9:1841 General ruleThe legitime or any portion may be placed in trust provided:

1. The trustee after taking into account all of the other income and support to be received by the forced heir during the year shall distribute to the forced heir, or to the legal guardian of the forced heir, funds from the net income in trust sufficient for the health, maintenance, support, and education of the forced heir.

2. The forced heir’s interest is subject to no charges or conditions except as provided in R.S. 9:1843, 1844, 1891 through 1906 and Subpart B of Part III of this Chapter.

3. Except as permitted by R.S. 9:1844, the term of the trust, as it affects the legitime, does not exceed the life of the forced heir.

4. The principal shall be delivered to the forced heir or his heirs, legatees, or assignees free of the trust, upon the termination of the portion of the trust that affects the legitime.

9:1891 through 1906 is about class trusts,

La. R.S. 9:1961 Nature of the interestA. An interest in income may be given absolutely or conditionally. It may be

given for the life of a beneficiary or for a term, certain or uncertain, not exceeding the life of a beneficiary.

B. A settlor may allocate to a beneficiary of income a portion of income. Any income not allocated to an income beneficiary shall be allocated to principal.

C. Except as otherwise provided with respect to the legitime in trust, a settlor may give a trustee who is not a beneficiary of the trust discretion to allocate income in different amounts among the income beneficiaries or to allocate

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some or all of the income to principal. The settlor may allow income that is not allocated by the end of the year in which it is received to remain unallocated by the trustee until a future year. Any income unallocated when the trust terminates shall be allocated to principal.

Must expressly allocate income interest or it will be a principal beneficiary.La. R.S. 9:1962 Distribution of income

In the absence of a contrary stipulation, income shall be distributed to the designated beneficiary at least every six months.

If you don’t stipulate, then the income must be distributed every 6 months.

The interest of the principal beneficiary

La. R.S. 9:1971 Time of acquisition of interestThe interest of a principal beneficiary is acquired immediately upon the creation

of the trust, subject to the exceptions provided in this Code and in Civil Code Article 1521(A)(2).

The principal beneficiary is like a naked owner.

La. R.S. 9:1972 Treatment of interest upon death of principal beneficiaryUpon a principal beneficiary’s death, his interest vests in his heirs or legatees, subject to the trust; provided, however, that the trust instrument may stipulate otherwise to the extent permitted by the following sections of this Subpart and R.S. 9:1985

La. R.S. 9:1973 Shifting interest in principalA. The trust instrument may provide that the interest of either an original or a

substitute principal beneficiary who dies intestate and without descendants during the term of the trust or at its termination vests in some other person or persons, each of whom shall be a substitute beneficiary.

B. Except as to the legitime in trust, the trust instrument may provide that the interest of either an original or a substitute principal beneficiary who dies without descendants during the term of the trust or at its termination vests in some other person or persons, each of whom shall be a substitute beneficiary.

If the principal beneficiary is not a forced heir and dies without descendants, the interest can shift.

If the principal beneficiary is a forced heir, the interest will only shift if the principal beneficiary dies intestate and without descendants.

La. R.S. 9:1978 Shifting interest in principal if beneficiary is descendant of settlor

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The trust instrument may provide that the substitute beneficiaries under R.S. 9:1973 are one or more of settlor’s descendants who are in being and ascertainable on the date of death of the principal beneficiary.

Hypo:

/principal A→C→DSettlor→Trustee

\income B

R.S. 9:1973 – basic rule about shifting principal beneficiariesA if not a forced heir, must die w/o descendants, and dies during the term of the trust or at the end of the trust.A if a forced heir must die intestate and w/o descendants.

Settlor sets up the trust w/A as the principal beneficiary. If A dies w/o descendants during the time of the trust, then C becomes the substitute principal beneficiary if A is not a forced heir and leaves no descendants. If A is a forced heir, he must die intestate and w/o descendants for C to become the substitute beneficiary.

Hypo:

Settlor sets up trust & wants his brother B to be the principal beneficiary. If B dies w/o descendants or grandkids, then the Settlor’s grandkids may be substituted as principal beneficiaries.

Settlor→B ↓ X/ / \ \

L M N OO is born after the trust is set up, but exists at the time of B’s death

Hypo:

Settlor/ \

A B / | \ X Y Z

Settlor sets up trust naming B as principal beneficiary. If B dies intestate and w/o descendants, then his interest falls to A’s children in being and ascertainable at the time of B’s death. But B may be a forced heir, look at B’s age at the time of the settlor’s death.

You can condition a substitution on the survival of the substitute.

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La. R.S. 9:1974 Substitute beneficiary’s interest may be conditionalThe interest of a substitute beneficiary may be conditioned upon his surviving the principal beneficiary. The trust instrument may provide for one or more alternative substitute beneficiaries if a substitute beneficiary does not survive the principal beneficiary.

If a forced heir is the principal beneficiary and dies w/ a will, can’t shift. If the forced heir has kids, can’t shift.

If B is a forced heir w/o descendants and with a will, and the trust left everything to B, then only the part that can’t be shifted is the legitime. B could dispose of his legitime in his will.

Deferred Ascertainment of Principal Beneficiaries of Revocable Trust

La. R.S. 9:2011 General RuleA revocable trust need not designate the beneficiaries upon the creation of the trust but may instead provide a method whereby they are determined at a later time, but no later than the time when the trust becomes irrevocable. A beneficiary thus determined may be a person who is not in being when the trust is created, as long as he is in being when the beneficiaries are determined. If beneficiaries are thus determined, any provision in this Code that refers to persons in existence at the creation of the trust shall be deemed to refer to persons in existence at the time the beneficiaries are determined under the trust instrument. The interest of the beneficiary may be conditioned upon the beneficiary surviving the settlor for a period of time.

Don’t have to designate the beneficiaries, but must provide a method to determine them at a later time.

Can put in people who are not in being at the time the trust is set up.A trust can’t become irrevocable until a certain point.

Class Trusts

Settlor can set up a class trust. This is a good tool for taking care of future grandchildren. Grandchildren that are born after the settlor’s death can be added as long as there was 1 member of the class in being.

La. R.S. 9:1891 Creation of classA. Notwithstanding the provisions of R.S. 9:1803, 1831 through 1835, and 1841

through 1847, but subject to the restrictions stated in this Subpart, a person may create an inter vivos or testamentary trust in favor of a class consisting of

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some or all of his children, grandchildren, great grandchildren, nieces, nephews, grandnieces, grandnephews, and great grandnieces and great grand nephews, or any combination thereof, although some members of the class are not yet in being at the time of the creation of the trust, provided at least one member of the class is then in being. Such a trust is called a class trust. If the trust instrument so provides, the interest of each beneficiary in the class shall be held in a separate trust after the class has closed.

B. If before the application of R.S. 9:1894 the class consists only of members of one generation, the interests of the members of the class shall be equal by roots from their common ancestor, unless the trust instrument provides otherwise. If before application of R.S. 9:1894 the class consists of persons in more than one generation, their interests shall be equal by heads, unless the trust instrument provides otherwise.

Hypo:

Settlor/ \

A B / | \ / \ E F G H I

G, H, and I are all born after the settlor’s death.

Class trust can cover children, grandchildren, and great grandchildren. Stops w/ great grandchildren. Same for nieces and nephews.Can be done in any combination if the trust is set up for descendants. Just need one member of the class in existence at the time the trust is created.

Spendthrift trust R.S. 9:2001-2007

Means the beneficiary can’t sell his principal interest in the trust. Doesn’t apply to income interest.

Protects the trust from waste and the beneficiary’s creditors.

La. R.S. 9:2004 Seizure by creditor, general ruleA creditor may seize only:1. An interest in income or principal that is subject to voluntary alienation by a

beneficiary.2. A beneficiary’s interest in income and principal, to the extent that the

beneficiary has donated property to the trust, directly or indirectly.These are the only 2 circumstances under which a creditor may seize.

La. R.S. 9:2005 Seizure by creditor; special claims

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Notwithstanding any stipulation in the trust instrument to the contrary, the proper court, in summary proceedings to which the trustee, the beneficiary, and the beneficiary’s creditor shall be parties, may permit seizure of any portion of the beneficiary’s interest in trust income and principal in its discretion and as may be just under the circumstances if the claim is based upon a judgment for:1. Alimony, or maintenance of a person whom the beneficiary is obligated to

support;2. Necessary services rendered or necessary supplies furnished to the beneficiary

or to a person whom the beneficiary is obligated to support;3. An offense or quasi-offense committed by the beneficiary or by a person for

whose acts the beneficiary is individually responsible.(tort offense)

Term of the trust

La. R.S. 9:1831 Limitations on stipulated termIf the trust instrument stipulates a term and unless an earlier termination is required by the trust instrument, or by the proper court, a trust shall terminate at:1. The death of the last surviving income beneficiary or the expiration of 20

years from the death of the settlor last to die, whichever last occurs, if at least one settlor and one income beneficiary are natural persons.

2. The death of the last surviving income beneficiary or the expiration of 20 years from the creation of the trust, whichever last occurs, if none of the settlors is a natural person but a least one income beneficiary is a natural person.

3. The expiration of 20 years from the death of the settlor last to die, if at least one settlor is a natural person but none of the income beneficiaries is a natural person.

4. The expiration of 50 years from the creation of the trust, if none of the settlors and none of the income beneficiaries is a natural person.

Can go 50 years if the settlor and income beneficiary aren’t natural persons.

La. R.S. 9:1833 Term in absence of stipulationIf the trust instrument stipulates no term, the trust shall terminate:1. Upon the death of the last income beneficiary who is a natural person; or2. At the end of the term prescribed by R.S. 9:1831(3) or 9:1831(4), if the

income beneficiaries do not include a natural person.

La. R.S. 9:1963 Permissible stipulations regulating distribution of incomeExcept as otherwise provided with respect to class trusts and the legitime in trust, a settlor may stipulate when the income allocable to a designated beneficiary shall be distributed to him, or he may stipulate that the trustee has discretion to determine the time or frequency of distribution or to accumulate some or all of the income.

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La. R.S. 9:1964 Termination of income interest; undistributed incomeAn interest in income terminates upon the death of the designated beneficiary, or at the expiration of the period of his enjoyment if the interest is for a period less than life. At the termination of an income interest, accumulated or undistributed income that has been or is required to be allocated to the beneficiary shall be paid to the beneficiary or his heirs, legatees, assignees, or legal representatives, except as otherwise provided in this code.

La. R.S. 9:1965 Effect of termination of interestTermination of the interest of the sole income beneficiary prior to the termination of the trust causes each principal beneficiary to become a beneficiary of income in an amount proportionate to his interest in the principal, unless the trust instrument provides otherwise. Termination of an interest in income of one of several income beneficiaries causes the other income beneficiaries or their successors to become beneficiaries of that interest in income in proportion to their interests in the balance of trust income, unless the trust instrument provides otherwise.

Duties and powers of the trustee La. R.S. 9:2061–2130

La. R.S. 9:2061 General ruleThe nature and extent of the duties and powers of a trustee are determined from the provisions of the trust instrument, except as otherwise expressly provided in this Code, and, in the absence of any provisions of the trust instrument, by the provisions of this Part and by law.

The trustee may invade the corpus of the trust for the benefit of the income beneficiary. Use an objective standard (support, education, medical expenses). Can also allow invasion of the principal for certain reasons as determined by the settlor.

La. R.S. 9:2068 Invasions of principal; provisions of the trust instrumentA. The trust instrument may direct or permit a trustee to pay accumulated income

or principal from the trust property to an income beneficiary for support, maintenance, education, or medical expenses, or, pursuant to an objective standard for any other purpose. The trust instrument may direct the trustee to pay all or part of the accumulated income or principal to an income beneficiary upon the request of the beneficiary. The trust instrument may direct the trustee to pay a stipulated amount or percentage to an income beneficiary under any trust, including a unitrust or annuity trust as defined in the US IRC, even if the payments exceed current or accumulated income. The trust instrument may provide the manner in which and the share of the trust to which the payment shall be charged against such beneficiary’s share in the trust as principal beneficiary, or, if there is no such share, proportionately against the shares of all principal beneficiaries. Except as provided in R.S. 9:1841 through 1847, treating the legitime in trust, a payment under this Subsection A may be made even though the payment impairs the interest of another beneficiary.

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B. If the same person is beneficiary of both income and principal, the trust instrument may direct or permit the trustee in the trustee’s complete discretion to invade accumulated income or principal held for that beneficiary.

La. R.S. 9:2127 Standard of care in investing and managementUnless the trust instrument provides otherwise, a trustee shall invest and manage trust property as a prudent investor. In satisfying this standard, the trustee shall consider the purposes, terms, distribution requirements, and other circumstances of the trust. A trustee’s investment and management decisions are to be evaluated in the context of the trust property as a whole and as part of an overall investment strategy having risk and return objectives reasonably suited to the trust. In investing within the limitations of the foregoing standard, a trustee is authorized to retain and acquire every kind of property.

Using the prudent investor rule gives the trustee more leeway – can do riskier investments if a prudent investor would do it, allows for diversification and allows for growth.

When can a trust end?Can it be sooner than stipulated or by the code?

La. R.S. 9:2026 Change of circumstancesThe proper court may order the termination or modification of a trust, in whole or in part, if:1. The continuance of the trust unchanged would defeat or substantially impair

the purposes of the trust.2. Except as otherwise provided by the terms of the trust, a trustee has

determined that the market value of a trust is less than $100,000 and that, in relation to the costs of administration of the trust, the continuance of the trust unchanged would defeat or substantially impair the purposes of the trust. In such a case, the court may provide for the distribution of the trust property, including principal and undistributed income, to the beneficiaries in a manner which conforms as nearly as possible to the intention of the settlor and the court shall make appropriate provisions for the appointment of a tutor in the case of a minor beneficiary. In the event of the termination or modification of a trust under the provisions of this Paragraph, the trustee shall not be subject to liability for such termination or modification.

Court can order termination or modification when the market value of the trust is under $100,000 and the costs of administration outweighs keeping the trust.

Succession of PayneOlographic will – was a trust created?Court used liberal interpretation. There is no successive order and a layman wrote the will. The property was identified and a beneficiary was named. The will was in proper form.Don’t need any particular language to create a trust.

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Panzelino v. PanzelinoMust have some fiduciary duties and obligations imposed on the trustee.Can give the trustee broad powers, but not full and complete discretion to do whatever he wants.

Chricton v. GredlerUnder today’s law this trust would be saved.The trust favored 2 nephews as lifetime beneficiaries w/ their father as trustee. Trust – if a beneficiary wasn’t living, then pay the beneficiaries children. If no children, then pay brother’s childrenCourt – found a prohibited substitution b/c the settlor wanted to shift the interest in principal. Can do this today in trust.At the end of the trust there is no more trust, thus the shifting of interest was a prohibited substitution b/c the trust was over.Can only shift an interest while the trust is in existence.

Under today’s law call the nephews the income beneficiaries, don’t say the trust terminates at their death and their children are the principal beneficiaries (if in existence at the time the trust is formed). If no descendants, then shift over to the other brother’s kids and descendants.

Nature of the beneficiary’s interest

Reynolds v. ReynoldsHow to characterize the interest in a trust?Is it community property?Settlor put farmland in trust for her grandchildren to last until the age of 21.While the property was held in trust 1 grandchild got married. She received money from the trust. Was this separate or community property? She spent the money on herself and her kids. At the time of dissolution of the community she had undistributed income from the trust.At the time of this case, the separate property remained separate, but the income generated by the separate property fell to the community.To get around this, must make declaration of paraphrenality – this is my separate property. This can be done at any time. But the wife didn’t do this.Wife says this is all separate property, and she hadn’t received the gift yet, thus the income was separate property.Husband argues that what was generated was income was community property.Trial court – separate property and the income was in the form of a gift b/c the trustee had title.C of A – vested in the corpus b/c she was the beneficiary – distributed income was the fruits of the property, thus the income was community property.

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Sup Crt 1st hearing – trustee is the owner of the property; funds from the income are separate property b/c it was part of the initial gift.Sup Crt 2nd hearing – distinguish between distributed income (fruits that fall into the community) and undistributed income (don’t fall into the community). Difference between the 2 is full ownership.Wife has 2 separate interests – the right to the interest in income and the right to future ownership in the corpus.A right to something is not ownership.All separate property because these are gifts to her. The distribution was a gift of future property and doesn’t fall into the community.

It is difficult to characterize the beneficial interest.If not in trust, and grandmother paid the money to the granddaughter it would clearly be separate property.

St Charles Land Trust, Achilhe, Guibet v. St. AmantMaryland corporation owned mineral leases on land in St. Charles Parish.The directors of the corporation transferred the leases to a trust for the benefit of the shareholders.The interest of the beneficiaries is classified as movable property.A beneficiary shareholder domiciled in La. died and La. wants to classify the interest as an interest in an immovable.Does putting the interest in trust create an immovable?Mineral leases were immovable. At this time the code considered usufructs and servitudes as immovables.But shares in interests in a company were movables.Right to an action that applies to a movable are incorporeal immovables.Interest shares in a juridical thing are considered movables.Court – don’t treat as corp. or partnership, don’t call this a movable, it is something else.

If I give land to you, I am giving you a corporeal immovable interest.But if I take the land and put it into a corporation and then give you shares of stock, you will be getting an incorporeal movable.

If I give you a usufruct over the land you will have an interest in an incorporeal immovable.

If I put the land in a trust and you are the beneficiary you have an incorporeal immovable and this is a taxable interest in La.

Rights of Beneficiaries to Income and Principal

Norton Family TrustCommunity property was used to set up the trust. The principal beneficiaries were the 7 children from his first marriage.The Nortons were trustees and income beneficiaries.

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Mr. Norton dies, and his wife was the only remaining income beneficiary. She got a lifetime usufruct over his separate and community property.His son became the trustee and wouldn’t distribute income to her. She sued, she wants her income and wants him to invade the corpus of the trust to meet her medical needs.Son – this breaches his duty to the principal beneficiaries and she has other means available to meet her medical needs.Court – no stipulation that she had to use other resources before invading the principal.

Succession of BurgessThe son’s legitime was placed in trust. The son was the principal beneficiary and the husband was the income beneficiary.The trust was to last for the life of the husband or until his remarriage. The forced heir complains that part of this trust is his legitime and it is an impingement on his legitime. He argues that you can’t burden the forced portion w/ a usufruct in favor of the husband.Wrong, court – says this is allowed, both under the trust code and usufruct articles.Can the legitime be satisfied by non-income producing property? The son argues that this defies his interest in the legitime.Court – the will complies with the code provisions, but b/c there is no income the terms of the will are meaningless. Court reforms the trust so that he gets interest income. Put the property in something that will produce income.

Duties of the trustee

In Re Succession of DunhamThe beneficiary comes in and tries to make the trustee do what is required.Settlor created 8 testamentary trusts. All beneficiaries wanted to throw out the trustee, but to do this you need a breach of a fiduciary duty (a conflict of interest or self-dealing).At this time the trustee was held to a reasonable man standard, now it is the prudent investor standard.Court – trustee didn’t act prudently in selling the investments and didn’t demand delivery of a legacy.

Spendthrift Trusts

Read v. U.S.Settlor wanted to leave son as little as possible and control it for as long as possible.Restrict it to the legitime by putting it in trust and give the trustee discretion.The son’s ex-wife had 2 Fla. judgments for alimony and she wants to get to his interest in trust. The trustee could invade the principal for the benefit of the son, but not for the benefit of the ex-wife.

Generally you can sell an interest in trust, but not an interest in a spendthrift trust.

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Duration and modification

Albritton v. Albritton Settlor set up time limit for when the beneficiary gets full ownership. Grandfather set up a spendthrift trust with the father as trustee and grandson as beneficiary.4 months before the termination of the trust, the grandson signed an extension. 14 years later he sues.Court – settlor wanted a portion of the trust to end when the grandson was 21, and the rest at 26. The extension was for the life of the trustee, this goes beyond what the settlor intended.No interest for the son to be able to extend.

Modify trusts when they are unworkable, too expensive or not contemplated by the settlor.

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