The State Bar of California - February 2006 Question 1 lyrics

Wendy, a widow, owned a house in the city and a ranch in the country. She created a valid inter vivos trust, naming herself and her daughter, Dot, as cotrustees, and providing that she had the power to revoke or amend the trust at any time in writing, by a document signed by her and delivered to her and Dot as co-trustees. At Wendy's d**h, Dot was to become the sole trustee, and was directed to hold the a**ets in trust for the benefit of Wendy's sister, Sis, until Sis's d**h. At Sis's d**h, the trust was to terminate and all a**ets be distributed to Dot. The sole a**et in the trust was Wendy's ranch. Years later, Wendy prepared a valid will in which she stated, “I hereby revoke the trust I previously established, and leave my house and my ranch to my son, Sam, as trustee, to be held in trust for the benefit of my brother, Bob. Five years after my d**h the trust shall terminate, and all a**ets then remaining in the trust shall be distributed outright to Sam.” Wendy died. Following her d**h, both Dot and Sam were surprised to find her will. Dot has refused to serve as trustee under the inter vivos trust, and claims that, as a result, the trust fails and that the ranch should immediately be given to her. Sam has agreed to serve as trustee under the testamentary trust, and claims that the ranch is part of the trust. Sam then sells the house, at fair market price, to himself in his individual capacity, and invests all the a**ets of the trust into his new business, Sam's Solar. Bob objects to sale of the house and to Sam's investment. 1. What interests, if any, do Dot, Sam, and/or Bob have in the house and the ranch? Discuss. 2. What duties, if any, has Sam violated as trustee of the testamentary trust, and what remedies, if any, does Bob have against him? Discuss. List of Issues Sample Outline 1 Sample Outline 2 Sample Answer 2 Sample Answer 2