Donations and Trust Wallace Outline Chapter 10.

Methods of Disposition Donations Inter Vivos Owner gratuitously divests himself of the property: 1) At present 2) Irrevocably 3) Accepted by donee Immovables: notary + 2 witnesses Incorporeal movables: notary + 2 witnesses Corporeal movables not delivered: notary + 2 witns. (La. Civ. Code art. 1541), manual gift exception-valid Corporeal movables delivered: no form (La. Civ. Code art. 1543) Donations Mortis Causa Takes effect after death and: 1) Revocable during life 2) In written testament (show intent and last will) 3) Divests of totality or portion of property Written testament in olographic or notarial form (La. Civ. Code art. 1570+ 1574) Succession of Sinnott v. Hibernia National Bank -No donations causa mortis in LA. Other Methods- exceptions to form A. Life Insurance contract law i. Sizeler v. Sizeler -Life Ins. not part of estate, passes outside. Unless estate is named beneficiary ii. La. R.S. 22:915 Form of donations inter vivos of life insurance policies -No formal naming of beneficiary required iii. La. R.S. 22:912(A) Exemption of proceeds -Protected from claims of Creditors and Forced Hiers. iv. La. CC. art. 1505(C) Calculation of disposable portion -FH cant collect full forced portion & LI. (if LI under forced share get up to force amount from estate) -Premiums and proceeds not counted in value of estate v. Ridgeway v. Ridgeway -Life ins exempted from fraud - Life ins not community property - FH not vested right. share to what is left B. Annuities

 La. R.S. 22:912(B) Exemption of proceeds -Protected from Creditors -Not protected from Forced Heirs C. Pensions T.L. James & Co. v. Montgomery -goes to named beneficiary, not part of estate, protected from FHs La. R.S. 23:652 Designation Form -only needs to meet requirement of plans La. CC. art. 1505(D) Calculation of disposable portion -not past of estate mass - FH cant double dip Succession of Durabb -Applies 1505D. -shows power of attorney Boggs v. Boggs -ERISA passed and pre-empt state law i. QDRO- Qualified domestic relationship order. - would validily change payee ii. 2801.1. Community property; allocation and assignment of ownership. -LA response to ERISA. Constitutional? D. Savings Bonds There are 3 ways to have an interest in a U.S. Savings Bond: i) Sole owner ii) Beneficiary on the bond (payable on death bonds) iii) Interest as co-owner (on death payable to co-owner or bonds) Winsberg v. Winsberg -bonds are donation mortis causa but valid because of federal contract law Succession of Guerre (& Free & Yiachtos) -Supremacy Clause of Fed allows USSBonds in LA -If use bonds for fraud or breach of trust invalid. i.e. prevent access to community property at divorce. Or Constructive fraud if to reduce FH legitime portion/amount, apply state law if use Fed t circumvent. -but for test (fed reg). allows reduction, not collation

 Osterland v. Gates -No collation, does not past but for test. Can waive collation, not reduction (automatic) Succession of Weis -co-owned savings bonds not part of estate, passes outside. Rights of Heirs Life Insurance Annuities Pension US Savings Bond Surviving Spouse No No Yes (ERISA)Current/ Prior subject to QDRO Yes- to reduction. No to collation (guerre) Forced Heirs No 22:647 Yes No Yes- if can prove fraud or breach of trust Included in 1505 calculation No 1505(C) Yes- credit to legitime No Yes

Chapter 11. Capacity

Presumption of capacity -Art. 1470. Persons capable of giving or receiving; All persons have capacity to make and receive donations inter vivos and mortis causa, except as expressly provided by law. Time when capacity must exist -Capacity to give: Capacity 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. (La. Civ. Code art. 1471) (at time gave/wrote will) -Capacity to receive: Capacity 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. (La. Civ. Code art. 1472) (time of donation/ succession open) -Capacity to receive conditional donation: When a donation depends on fulfillment of a suspensive condition, the donee must have capacity to receive at the time the condition is fulfilled. (La. Civ. Code art. 1473) A. Capacity to receive Must be in existence Unborn children: To 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. (La. Civ. Code art. 1474) - 940: 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. - 26: An unborn child shall be considered as a natural person for whatever relates to its interests from the moment of conception. If the child is born dead, it shall be considered never to have existed as a person, except for purposes of actions resulting from its wrongful death. - 9:391.1: Notwithstanding the provisions of any law to the contrary, any child conceived after the death of a decedent, who specifically authorized in writing his surviving spouse to use his gametes, shall be deemed the child of such decedent with all rights, including the capacity to inherit from the decedent, as the child would have had if the child had been in existence at the time of the death of the deceased parent, provided the child was born to the surviving spouse, using the gametes of the decedent, within three years of the death of the decedent A donation in favor of a person who is incapable of receiving is null. (La. Civ. Code art. 1475) i.Trusts for charitable purposes 2271. Donation; purposes; beneficiaries; conditions -A charitable trust is created when a person makes a donation inter vivos or mortis causa in trust for the relief of poverty, the advancement of education or religion, the promotion of health, governmental or municipal purposes, or other purposes the achievement of which is beneficial to society. The trust instrument may be specific or general in the statement of its purposes and may include any conditions that are not contrary to law or morals. [If not in favor of an institutional beneficiary,] the beneficiaries of the trust shall be selected by the trustee or other person, pursuant to the terms of the trust instrument Carr v. Hart - Fund for nonexistent purpose fails at donation/death Milnes Heirs v. Milnes Executors - fund to be created at death ok - charity exception gives more leeway B. Capacity to give Age; 1476. Minors; incapacity to make donations, exceptions

-A minor under the age of sixteen years does not have capacity to make a donation either inter vivos or mortis causa, except in favor of his spouse or children. -A minor (16+) has capacity to make a donation, but only mortis causa. He may make a donation inter vivos in favor of his spouse or children. Mental Condition; 1477. Capacity to donate, mental condition of donor -To 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 (of sound mind replaced) - Test reasonableness; WW a RPP do? Ability not actuality Undue Influence, Fraud, or Duress; - 1478. Nullity of donation procured by fraud or duress; A donation inter vivos or mortis causa shall be declared null upon proof that it is the product of fraud or duress. - 1479. Nullity of donation procured through undue influence :A 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 - 1480. Nullity due to fraud, duress, or undue influence; severability of valid provision. When 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. (not all void if part ok/ not undue) - Art. 1481. Fiduciary appointment, termination. Any 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 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.

i. Burden of Proof -1482 Capacity A. 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 donor made the donation inter vivos or executed the testament. B. A full interdict lacks capacity to make or revoke a donation inter vivos or disposition mortis causa. C. A limited interdict, with respect to property under the authority of the curator, lacks capacity to make or revoke a donation inter

vivos and is presumed to lack capacity to make or revoke a disposition mortis causa. With respect to his other property, the limited interdict is presumed to have capacity to make or revoke a donation inter vivos or disposition mortis causa. These presumptions may be rebutted by a preponderance of the evidence -1483 Undue influence, fraud, duress A 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. Succession of Cole -argue no capacity & under influence Robertson v. Cubine Succession of Horrell Succession of Deshotels Succession of Culotta Succession of Reeves

Chapter 12. The Disposable portion, the Legitime and Reduction, art. 1493-1514
A. The Forced Heir and the Forced Portion B. Reducing Excessive Donations C. Disinhersion

Chapter 13. Donations Omnuim Bonorum and Disposition Reprobated by Law

A. Donations Omnium Bonorum, art. 1498

B. Dispositions Reprobated by Law, art. 1519-22

Chapter 14. Donations Inter Vivos, art. 1523-1535

Chapter 15. Dispositions Mortis Causa and the Marital Portion, art. 1570-1616, 2432-2437

Chapter 16. Trusts in Louisiana, La. R.S. 9:1721-2252, art. 1520