KAPLAN BAR REVIEW hangout

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soccerfreak
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Re: KAPLAN BAR REVIEW hangout

Postby soccerfreak » Sun Jul 27, 2014 8:17 pm

Tanicius wrote:Okay guys, I'm figuring, it can't hurt to reinforce some of this stuff by writing it out in plain English, so why not. Wills are my weakest, so I'll start with Agency and Partnerships. These are not complicated subjects -- neither in scope, nor in depth, mostly because there's no statutory law about them for the bar exam to memorize.

Stay tuned.

OMG. I'm excited for these.

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silky bruh
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Re: KAPLAN BAR REVIEW hangout

Postby silky bruh » Sun Jul 27, 2014 8:33 pm

soccerfreak wrote:
Tanicius wrote:Okay guys, I'm figuring, it can't hurt to reinforce some of this stuff by writing it out in plain English, so why not. Wills are my weakest, so I'll start with Agency and Partnerships. These are not complicated subjects -- neither in scope, nor in depth, mostly because there's no statutory law about them for the bar exam to memorize.

Stay tuned.

OMG. I'm excited for these.


TURGID

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bazinga!
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Re: KAPLAN BAR REVIEW hangout

Postby bazinga! » Sun Jul 27, 2014 8:43 pm

Tanicius wrote:Okay guys, I'm figuring, it can't hurt to reinforce some of this stuff by writing it out in plain English, so why not. Wills are my weakest, so I'll start with Agency and Partnerships. These are not complicated subjects -- neither in scope, nor in depth, mostly because there's no statutory law about them for the bar exam to memorize.

Stay tuned.


I should not be as happy to read law as I am right now. BRING IT ON!! YAY!

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Tanicius
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Re: KAPLAN BAR REVIEW hangout

Postby Tanicius » Sun Jul 27, 2014 8:48 pm

The basics of agency.

Agency is ultra, ultra basic. It’s a platform philosophy for anything involving a fiduciary duty of almost any kind. Attorney ethics rules of representation, wills executors/administrators, trustees, and almost anyone involved in a partnership or corporation has to know basic fundamentals of agency/principal relationships. Partnership law is impossible to describe without talking about agency.

In this post, we’ll cover:

1. Forming Agent/Principal relationships (ABC!).
2. Principal’s liability for agent’s torts (authority!).
3. Principal’s liability for agent’s breach of contracts (frolic vs. detour).
4. Intro to fiduciary duty.

1.) Forming an Agent-Principal Relationship.

This is all it is: (A)ssent, (B)enefit, (C)ontrol. A, B, C. Assent, Benefit, Control. Assent, Benefit, Control. Assent, Benefit, Control.

An agent ASSENTS to the CONTROL of a principal for the principal’s BENEFIT. Asking your nephew to grab some milk from the corner store? That’s an agency relationship, if he AGREES to BENEFIT you at your CONTROL.

How do you create an agency relationship formally, though?

You actually don’t have to ever introduce formalities, though an employment contract can shed helpful light on certain issues. There is no requirement that an agent be paid by his principal in order for him to be acting on the principal’s behalf. In fact you don’t even need words to form the agreement. Just look for some evidence of an agreement between two or more people/entities to do something at the whim of one of them.

Why does it matter that someone is an agent?

Because as you are by now familiar with from your Torts material, if you have someone do something on YOUR behalf, any victim of THEIR wrongdoing can sue YOU.

More broadly, watch out for two particular situations: a tort violation, and a contract violation. The victim is always going to be looking for the deeper pockets, and that usually means suing the principal for an agent’s tort or breach of contract.

How do you terminate an agency/principal relationship?

Easy. You tell the other guy you’re done. That’s all it takes. Of course, you’re still gonna be on the hook for anything done before then when the relationship was still in existence.

What’s the difference between an agent and an independent contractor?

This is important. The less CONTROL a principal actually exercises over someone, the less likely they are to be considered an agent instead of an independent contractor.

Here’s the quintessential example for an independent contractor: Tell someone to build your house, based on specifications you give them ahead of time. You have some guidelines, like “follow the law,” and “make the countertops look like this.” That’s not the kind of control that matters.

Here’s an example of an agent: The kind of control we care about is active direction. “Oh hey you’re moving the countertops into the house? Cool let me help you. Can you give me a hand with it? Yeah if you’ll just walk over there, and I’ll follow you in…” You’re actively directing the guy, so he’s become your agent, subject to more direct control.

It works on a non-official, fluid spectrum. The more control you exercise, the more exposed to liability you are as a principal.

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2. Principal’s liability for agent’s breach of contract.

Okay, there is going to account for 50% of all agency essays. (The other 50% comes from… you guessed it, the only other possible issue, tort liability.)

All we care about is whether the agent had AUTHORITY to enter the contract.

“Oh, well that’s easy,” you’re saying. “So if the principal never said it was okay, the agent can’t do it?”

Well, no. There are four kinds of authority: Actual Express, Actual Implied, Apparent, and Ratified. These kinds of authorities matter because sometimes people get tricked (reasonably and unreasonably) into thinking that someone is an agent when they really aren’t. You can imagine why this would create a lot of problems in contract law.

a.) Actual, Express Authority: This is where you tell the agent, using words or writing, that they can do something on your behalf. Pretty simple. For this type of authority, we only care about what the agent is perceiving when they take an order from you. You got your basic subject good faith standard of the agent in perceiving your words, and the good ol’ objective reasonable person standard. Apply both of them to determine whether an agent has Actual, Express Authority to contract over something.

b.) Actual, Implied Authority: This second type of “actual” authority applies the same subject and objective test from the agent’s shoes, only it doesn’t deal with words/writing by the principal. Instead all we care about is what the agent reasonably and in good faith thought you wanted him to do. So think about this for a minute. What kinds of things might an agent use to determine whether you want them to do something? Gee, I don’t know – the accepted business custom, prior business deals with you in the past, repeat tasks from the past, general trade usage, etc.

Super logical point here: Actual authority terminates when the agent finds out that the principal has revoked the authority or when the agent finds out that the principal has died. Until they find that out, however, they can continue racking up liability for the principal/principal’s estate. This makes sense, doesn’t it? Think how bullshitty it would be if you became liable for a $100,000 contract for a sale of lumber because you didn’t know at the time that your house-building boss had just fallen off the roof at the job site and broken his neck.

c.) Apparent Authority: This is about what third parties may reasonably rely on, based on how your relationship with the agent is represented to them. The principal reaches out to a third party and tells the third party instead of the agent that their agent is authorized to act on the principal’s behalf. “Hey Tom, my associate is coming over to the courthouse to compromise with you and your client on my firm’s behalf. He’s authorized to make any deal necessary to put this case behind us.” That’s apparent authority because you informed the third party of the existence of the agent’s authority.

Just like with actual authority, here the third party must share the same requirement of having a good faith and reasonable belief in the agent’s authority to carry out what he’s requesting. You look to the same super logical, obvious shit you’d find for Actual Implied authority: business custom, prior dealings, and also actual words from the principal, such as an email or phone call.

When does apparent authority terminate? NOT when the agent finds out his boss has fired him or died, but rather when the THIRD PARTY finds that out. Yes, I know what you’re thinking. This means that agents could foreseeably defraud third parties in all kinds of deals. Yep, sure does. You ever hear a word called “embezzlement”? Happens all the time.

So, can an agent be acting under actual and apparent authority at the same time, or either one?

Yes. There is no hierarchy for which one matters more or which one will provide a stronger basis for a lawsuit.

d.) Ratification Authority: This is pretty simple. You’re the principal, you find out your agent has done something they WEREN’T authorized to do… and instead of becoming super enraged and termination-happy, you just go “whatever” and knowingly accept the benefits of the contract the agent entered into on your behalf. “Hey Johnny, did you know your associate was just in my grocery store ordering 100 burritos for your office party? This sounded fishy to me because I know you guys are closed this week. Is this order legit?” “Wait, what? 100 burritos?!” “Yeah, you want me to cancel the order for you?” “No that’s okay, I was really hungry anyway.” Ratified, bitchez – no turning back now.

The principal must always be DISCLOSED in some way to a third party for the agent to avoid liability. So long as the principal reasonably knows that there is some kind of principal involved, then the principal will end up getting bound. But if the principal is completely undisclosed in the deal to the third party, and there’s no prior dealing to let the third party know there might be a principal involved, then the agent’s stuck with the entire price of the contract unless the principal decides to stop laughing his ass off and generously ratify.

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3.) Principal’s liability for agent’s torts. (Distinguish detours versus frolics and you’re good.)

This is super easy. You already know this. Respondeant Superior/Vicarious Liability. That’s all it is!

These are the only two requirements:

a.) The principal has sufficient control over the agent. (Gotta distinguish the agent from an independent contractor, remember.)

This requirement will only be waved for a few super obvious exceptions you already know about: non-delegable duties (like keeping the commons of an apartment safe), inherently dangerous activities like your fancy dynamite building hobby, negligent hiring of a contractor, and retaining control over specific tasks (Housewife: “Move the countertop this way you idiot, not that way!”).

b.) More controversial of an issue, the agent must be acting in the scope of employment.

Things to consider in analyzing this issue: Is the agent benefitting the principal with this behavior? Was he specifically asked or hired to perform it? Did the incident occur on a job site? Distinguish a detour versus a frolic. Taking a shortcut in your semi around a traffic jam is in the scope of your employment, but driving across the Mexican border to have an authentic quesadilla for lunch on your way from El Paso to San Diego is not.

What about intentional torts, or ridiculous shit like a fight during a professional hockey match?

Most intentional torts are not imputed vicariously to the principal, for obvious reasons. A trucker’s road rage is not fair grounds to punish the principal. On the other hand, the closer the activity is to benefitting the principal and within the agent’s normally expected job duties (like a professional hockey match fight), the more likely the principal is to be held liable. Ask yourself whether the agent is doing this intentional tort in order to benefit the principal. And obviously if the principal ever openly ratified the behavior he’s dead in the water.

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4. Intro to Fiduciary Duties.

We’ll get into this a lot more in partnerships, but it’s relevant here too. What we care about are the agent’s duties to the principal. The agent can be sued by the principal for tortious conduct that violates the rights of the principals.

What are the main fiduciary rights of an agent to their principal? Three simple ones: duty of loyalty, due care, and obedience towards instructions.

a.) Duty of Loyalty.

This is a counter-intuitive notion here, so read this closely. An agent can never do anything that denies a business opportunity to the principal. Some easy examples of this: If someone comes to your company offering a business deal, your secretary cannot take him aside and say “I’ll do it for half as much!” That’s usurping your business opportunity, and she’s violating her duty of loyalty to you. She also can’t compete by going home and starting her own business in a field that could even conceivably affect your business. If she’s a secretary for your law firm but is running a fishing business when she’s supposed to be typing up a document for court, she’s just violated her duty of loyalty.

It also means more invisible forms of loyalty. An agent can’t make ANY secret profits that use their status as your agent to make the money. This includes something basic, like calling people and falsely holding themselves out as doing business on your behalf and pocketing all the change themselves. It also includes less obvious things, like offering their skills on the black market. In a very famous case, a British soldier was sued by the Queen of England for selling guns in Egypt to partisans. The queen of England sued and won the right to the British soldier’s illegal profits.

Yeah, it’s that ridiculous. Duty of loyalty does not fuck around.

b.) Duty of Due care.

Your agent has the duty to act as a reasonable person in his position would act. If he’s an expert in something, like an accountant, then he has to act like a reasonable expert accountant in his position.

c.) Duty to Obey instructions.

Instructions are a CYA by principals to avoid liability. “WTF, I specifically instructed all my truck drivers to NEVER speed. It isn’t fair if you hold me liable when he was going 20 over the limit!” The more detailed your instructions, the more you’re going to recover from an agent who got you in trouble for their mistake.

CAVEAT: You can’t just tell people not to break the law! If an agent of yours breaks the law in a way designed to benefit you, even if you told them earlier “don’t break the law,” you can still be held liable for your agent if the instructions were not so clear that the agent knew you didn’t want him to do it. None of this TTT “So, at my law firm, I expect you to be ethical, but I also expect you to earn, wink wink” bullshit.
Last edited by Tanicius on Sun Jul 27, 2014 8:56 pm, edited 1 time in total.

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spleenworship
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Re: KAPLAN BAR REVIEW hangout

Postby spleenworship » Sun Jul 27, 2014 8:56 pm

Outstanding! Thanks Tani!

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lisjjen
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Re: KAPLAN BAR REVIEW hangout

Postby lisjjen » Sun Jul 27, 2014 9:38 pm

I wasn't even going to study tonight, but these are amazing and cover topics I didn't feel awesome about. I just got so tired of reviewing 30 pages of "...here is basic negligence. Here's the rules for basic negligence. Unless it's a cat that is being negligent here's the rules for that. Unless the cat is owned by European nobility, here's the rules for that. Unless that noble owned cat was voluntarily intoxicated, here's the rules for that. But if the cat was involuntarily intoxicated..."

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bazinga!
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Re: KAPLAN BAR REVIEW hangout

Postby bazinga! » Sun Jul 27, 2014 9:47 pm

lisjjen wrote:I wasn't even going to study tonight, but these are amazing and cover topics I didn't feel awesome about. I just got so tired of reviewing 30 pages of "...here is basic negligence. Here's the rules for basic negligence. Unless it's a cat that is being negligent here's the rules for that. Unless the cat is owned by European nobility, here's the rules for that. Unless that noble owned cat was voluntarily intoxicated, here's the rules for that. But if the cat was involuntarily intoxicated..."


aw shit. this just made me remember that I can't remember what voluntary intoxication is a defense to. i know it's no defense to general intent....dang, now I have to look it up.

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PennBull
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Re: KAPLAN BAR REVIEW hangout

Postby PennBull » Sun Jul 27, 2014 9:48 pm

Tanicius should open his own bar prep company

No shitty mnemonics or stupid fucking professors using HIP and COOL pop culture references to explain contracts

Just real shit

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Georgia Avenue
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Re: KAPLAN BAR REVIEW hangout

Postby Georgia Avenue » Sun Jul 27, 2014 10:02 pm

bazinga! wrote:
lisjjen wrote:I wasn't even going to study tonight, but these are amazing and cover topics I didn't feel awesome about. I just got so tired of reviewing 30 pages of "...here is basic negligence. Here's the rules for basic negligence. Unless it's a cat that is being negligent here's the rules for that. Unless the cat is owned by European nobility, here's the rules for that. Unless that noble owned cat was voluntarily intoxicated, here's the rules for that. But if the cat was involuntarily intoxicated..."


aw shit. this just made me remember that I can't remember what voluntary intoxication is a defense to. i know it's no defense to general intent....dang, now I have to look it up.


It's a defense to specific intent crimes to the extent that it negates the intent required for the crime. Same as mistake of fact, no matter how unreasonable.

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Tanicius
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Re: KAPLAN BAR REVIEW hangout

Postby Tanicius » Sun Jul 27, 2014 10:10 pm

Basics of Partnership Law

Partnerships are, at heart, the very most fundamental form of an agent/principal relationships. The partnership itself is a principal, and the partners are all agents of the partnerships. The partners can also principals, and employees they hire are agents of the partners and partnership.

The most important rules in partnership law are the fiduciary duties. If you’re already familiar with partnerships and wondering what to spend your time memorizing, worry about fiduciary duties, cause that’s almost all that really matters.

Here’s how we’ll proceed:

1. Forming a partnership.
2. Duties of partners and agents to the partnership
3. Tort and Contract liability of the partnership.
4. Ending a partnership.
5. Random note: Limited Liability Partnerships and Special Partnerships


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1. Forming the partnership.

All you need is: a group of 2+ people or legal persons (includes business entities) get together and decide to work together in a business as joint owners, for profit.

Breaking it down even more:

i. two or more persons
ii. some kind of association together
iii. agreement to work together
iv. as co/joint owners
v. for profit

A partnership requires NO formal writing between the partners or registration with the government! This is one of two huge, key differences between a partnership and a corporation. A partnership can be formed orally, OR it can even be formed without any words ever being exchanged at all!

“Want to sell lemonade with me today, Dave?” “Sure. You buy the lemons I’ll bring the table.” Boom, partnership.

You don’t even need to have a specific intent to form the partnership. Simply intending to work together for profit is often sufficient. This happens all the time in the real business world. Two guys will share office space together, pitch in money to maintain the place and keep the lights on, maybe one of them handles real estate and the other handles accounting… Sorry bro, but that’s a partnership whether you call it one or not.

Wow. So what the hell isn’t a partnership?

Any business arrangement where the profits aren’t being shared between 2 or more people. A bank is not your business partner just because they gave you a loan so you could buy office space for your brand new law firm. The money you’re giving the bank isn’t profits – it’s loan payments they are entitled to whether or not your business succeeds. And if your business succeeds brilliantly, it’s not like you’re going to pay the bank a bonus loan payment, right? (Now that’s not to say an entity like a bank couldn’t be a business partner. It easily could if it agreed to front you some money for a new business with the mutual understanding that you would give it 20% of the profits, no matter how low or high they are.)

More importantly, salaried employees are not partners in a business with you because they aren’t getting a percentage chunk of the profits. Their money is overhead you pay every month like it or not.

Isn’t there supposed to be shared control too, not just profits?

Eh. Whenever profits are shared, there’s always a presumption that it’s a partnership. Shared control is just another piece of evidence one might consider to also find a partnership. Remember, you need not be sharing the same job responsibilities. Your 88-year-old grandma can be your business partner eve if all she does is load your office with cash from that sweet sweet trust account. Meanwhile, your geeky cousin who handles nothing but the computer coding could also be a partner, so long as he gets a share of the profits.

What if the partners WANT a written agreement?

Then that’s great! (And probably pretty wise, too, to make sure everyone’s on the same page.) The gist is, if you have a partnership agreement, it controls all formalities except those that are pre-empted by state partnership law. When you don’t have an agreement, state law provides every rule for you. Written agreements are given very wide latitude, however, and can provide for a share of control, tasks, profits and losses of almost infinite varieties.

The only restrictions state law exercises over written partnership agreements are: (1) liability to third parties, (2) all partners must be given access to the books and records, and (3) all partners owe non-waivable fiduciary duties to the partnership.

As partners, do they have to all earn the same profits?

No! The profits can be split however the partners agree. If you’re a huge lawfirm with thousands of partners, partners are gonna get a share of profits requisite with their amount of business they bring into the firm. When Michael Bay forms a movie partnership, meanwhile, he probably takes 70% of the profits and everyone else is left to fend for the scraps.

A written partnership agreement sets these profit shares in stone. Absent a writing, the state law will provide that the profits be split equally by the number of partners. If there is no designated writing specifying losses, then the state law will also assume that the losses follow the profits. So for example if Michael Bay has a contract saying he gets 70% of the profits from a partnership, but the deal is silent on losses, the state law will assume he also fronts 70% of the losses. You can, however, imagine instances where one partner will bear a disproportionate share of losses for tactical reasons, such as wanting to hang a guillotine over a partner who is especially pro-risk.

What about control share? Voting and things like that?

Look to the partnership agreement, otherwise the law presumes you split all managerial authority evenly and all voting evenly. Absent a writing, any ordinary business decision requires a majority of partners to ratify, and any material modification of the agreement (like adding a new partner, changing your business from selling flowers to the practice of law, or dissolving the partnership) requires a 100% majority. Obviously, a huge firm like DLA Piper has a written partnership agreement, or managing its 5,000 attorneys would be insane and impossible.


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2. Partners owe fiduciary duties to the partnership.

Partners are agents of their partnership. As such, they owe the same fiduciary duties I talked about in the agency post.

a.) Duty of Loyalty: No self-dealing, secret profits, usurping the partnership’s opportunity for new business deals, or any other behavior that could in any way make money for the partner at the expense of the partnership. You cannot just write-out this duty in your partnership agreement, either, though you can provide reasonable limitations on it. For instance, your law firm partnership can have an agreement that the partners are free to set up their own non-law-related businesses provided they conduct the business in their spare time when they are not working for the firm.

b.) Duty of Care: It’s NOT mere negligence. The kind of negligence we’re talking about for partners is GROSS negligence, intentional fraud/misconduct, and knowing violations of the law. A partnership agreement can limit this duty a little bit, but you’re on a tight leash here.

These duties last for any partner who is currently a partner. Once you retire, or before you’re hired, you’re free to be a screwball.

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3. Tort and Contract liability of the partnership to third parties.

Because all partners are also agents, partners have authority to enter contracts, and the partnership can be sued if a partner or employee of the partnership breaches a contract or commits a tort.

a.) Contract liability.

So, back to the basics: Actual authority, implied custom actual authority, and apparent authority. How do we analyze this stuff in the context of a partnership? Well, you might start with a written partnership agreement. Does it give actual authority to certain partners but not others? What about apparent authority? Is one partner doing all the sales for the partnership? Okay, then that makes it highly suspicious when the partner in charge of the IT network suddenly calls up Safeway and offers to sell them roofing services. A reasonable partner would realize he doesn’t have actual authority from the partnership to do that, and a reasonable third party might realize the partner does not have apparent authority to do that.

b.) Torts.

Scope of their employment/partnership, baby. That’s all that matters, once again. If you’re a doctor at a medical partnership and you commit malpractice by accidentally amputating someone’s leg in a knee surgery, your entire knee surgery partnership is looking at some profit amputation. They’re gonna be without a financial… leg to stand on. Ha ha ha.

!!!! Wait! So what happens if the partnerships coffers can’t cover the breach or tort?

Then the individual partners contribute to cover the rest of the bill! This is a serious issue to be cognizant of on the exam. Partnerships are not corporations – by default, they do not have limited liability for the partners! Practically speaking, the clear lesson here is: don’t hire alcoholics, assholes, and incompetents into your partnership ring, or YOU will personally be paying for them sometime soon.

All partners are jointly and severally liable for partnership obligations. That includes loans and other unpaid contracts to other third parties. The third party creditors always get rights to any money your partnership makes long before you do, and if the partnership comes up short, then the creditors get to come for you.

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4. Ending the partnership.

Yep, we’re already almost done with this topic. I told you it was simple.

So, a difference to keep in mind: dissociation versus dissolution. Dissociation is where a partner leaves the partnership, either voluntarily or involuntarily. Dissolution is an end to the entire partnership, also either voluntarily or involuntarily.

How does a partner leave? Is it super complicated?

Nah. He quits. I mean, if he has unpaid money obligations to the partnership, then they’re gonna want (and will be entitled to) those. But his service obligations end right there. He just has to give notice.

Why might a partner involuntarily dissociate?

Oh I don’t know. Drug addiction, breaking the law, he went bankrupt, a court orders him out, he ran afoul of some agreement in the partnership agreement that provided for involuntary termination. Uh, he violated a fiduciary duty? That’s a big one, right?

By the way, dissociating sucks if you’re being forced out, because you lose all entitlement to profits, your right to examine the books and records, and your right to participate in management.

How does voluntary dissolution work?

It’s got this weird official process, called ”winding up”. I didn’t invent these terms, but hey, it makes more sense than possibility of reverter, doesn’t it?

Nah, it’s not too bad. First of all, you can do it voluntarily. This is where the partnership unanimously (or by a majority specified in the agreement) decides to dissolve. Or alternatively, the partnership agreement provides for a specific condition that will automatically result in termination, such as completion of Michael Bay’s movie in his movie partnership. Or perhaps there’s a term agreement: “Let us be partners until October 23, 2016.” Or maybe you got in a partnership with your brother in law and you both realized real quick you were both not meant for anything more intimate than beer on the porch together. Any number of causes, really.

What about involuntary termination? You’re gonna say bankruptcy and court judgments, aren’t you?

It’s because of bankruptcy and court judgments, yeah. Your partnership becomes insolvent two years ago? Well, sorry, you need to pay your creditors, and the court doesn’t give a fuck how passionate you and Gus Fring are for your fancy chicken recipe – if you aren't getting around to paying your debts, then the court is gonna make you sell off your chicken coop and cookery assets and give everything to the bank.

Back to this wind-up process. What’s it actually entail?

It’s akin to an executor’s execution of a will in the probate process. You’re basically acting as the partnership’s funeral director, making sure all of its affairs are in order so you can put this nightmare behind us.

One or more partners that were still members of the partnership at the time of its dissolution are appointed to be responsible for the winding up process. Their primary duties are disposing of assets, paying creditors, and otherwise discharging of any remaining partnership obligations.

Now if you want to get hyper-technical in your exam answer, you can also mention that you have to file a “statement of dissolution” to all third parties the partnership did business with that gives them notice that the partnership has or is will be dissolved by an effective date. Why do you file this? Easy – to limit your liability because of apparent authority. If a third party is used to selling you a dump-truck full of shoes to your shoe shop every month, they’re going to be royally pissed to find out their last two month’s of shoes were being delivered to a vacant lot and they aren't getting paid for them anymore.

When can partners get paid for the remaining assets and cash in the dissolved partnership?

Only once all creditors have been paid.

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5. Random note that deserves its own section: Special Partnerships and Limited Liability Partnerships (LLP)

These are special partnerships that can only be created by filing with the government. You must name your partnership in such a way that it is apparent on its face that it has limited liability. This means, practically speaking, that it needs “limited liability partnership” or “LLP” at the end of its name. You must put all third parties on notice that your partners are not gonna be as liable for your parntership’s mistakes as most other kinds of partnerships.

What the fuck does LLP mean anyway? I see that on all the law firms I applied to.

It means that the partners have limited liability for faults of the partnership/other partners. As with shareholders for a corporation, LLP partners are cloaked in a protective veil, which cannot be pierced absent extraordinary circumstances.

Those extraordinary circumstances give rise to direct partner liability under an LLP are:

i. gross negligence by that particular partner
ii. fraud by that particular partner
iii. illegality by that particular partner
iv. any gross neg, fraud or illegality that the partnership ratified by vote or conduct

Okay, it’s gonna be confusing keeping that separate from corporations law, but I can do that. What about limited partnerships?
These are partnerships with different classes of partner: general partner and limited liability partner. Often, only one partner at a limited partnership will be the general partner. He’s typically the partner who exercises more direct control over the day-to-day operations. The limited liability partners tend to exercise less control and usually only put up capital to get the business going.

That sounds insane. Who the fuck would ever volunteer to be a general partner at a limited partnership? They do all the work but front all the risk?

Corporations and LL Companies can be the GP too. 95% of the time in real life, you have a bunch of limited partners, and then a limited liability entity (usually single purpose) as the general partner.

Remember that limited partnerships must also be filed with the government to give third parties notice of their status.
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That’s that, folks. Partnerships and agency law are very easy to bullshit on the exam because there are very few hardline rules. Almost everything operates on a spectrum. Reasonability, authority, fiduciary duty, and partnership agreements are gonna be the buzzwords you find yourself re-typing over and over. Most of the issues on the essays are pretty simple, like “What relationship are the parties?” Well, they’re a general partnership, because Aunt and Nephew each agreed to sell flowers to make a profit together. Or “Can Polly Plaintiff recover from Joe’s bike shop partnership for her bike accident when Joe reasonably and in good faith sold her a defective bicycle?” Stuff like that. Just wax philosophic about respondeant superior and the different types of authority and you’ll be golden on most of these questions.
Last edited by Tanicius on Sun Jul 27, 2014 11:38 pm, edited 3 times in total.

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spleenworship
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Re: KAPLAN BAR REVIEW hangout

Postby spleenworship » Sun Jul 27, 2014 10:20 pm

thanks Tani! Good job!

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silky bruh
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Re: KAPLAN BAR REVIEW hangout

Postby silky bruh » Sun Jul 27, 2014 10:23 pm

Unreal. Let me send you some beer.

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Tanicius
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Re: KAPLAN BAR REVIEW hangout

Postby Tanicius » Sun Jul 27, 2014 10:28 pm

I can do Wills and Trusts tomorrow, folks. You probably won't need it by then, but they're my two weakest subjects so it's helpful to me just to write them out. Hope you guys nail this shit on your essays.

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spleenworship
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Re: KAPLAN BAR REVIEW hangout

Postby spleenworship » Sun Jul 27, 2014 10:29 pm

Tanicius wrote:I can do Wills and Trusts tomorrow, folks. You probably won't need it by then, but they're my two weakest subjects so it's helpful to me just to write them out. Hope you guys nail this shit on your essays.



Thanks again man. I owe you way more beer.

Also, Wills and Trusts will be a nice review tomorrow before I zone out and try to relax.

semplice
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Re: KAPLAN BAR REVIEW hangout

Postby semplice » Sun Jul 27, 2014 10:31 pm

Tanicius wrote:Basics of Partnership Law


It's like the grand finale at a fireworks show, when all the face-melting explosions happen on top of each other right at the very end. That's what it's like when Tanicius posts three of these things in rapid succession two days before the bar exam. A million thanks.

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silky bruh
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Re: KAPLAN BAR REVIEW hangout

Postby silky bruh » Sun Jul 27, 2014 10:34 pm

semplice wrote:
Tanicius wrote:Basics of Partnership Law


It's like the grand finale at a fireworks show, when all the face-melting explosions happen on top of each other right at the very end. That's what it's like when Tanicius posts three of these things in rapid succession two days before the bar exam. A million thanks.


The commercial paper one was just absolute money. I'm praying we get one on Tuesday.

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Re: KAPLAN BAR REVIEW hangout

Postby annalisa » Sun Jul 27, 2014 11:06 pm

Bro Bono wrote:
semplice wrote:
Tanicius wrote:Basics of Partnership Law


It's like the grand finale at a fireworks show, when all the face-melting explosions happen on top of each other right at the very end. That's what it's like when Tanicius posts three of these things in rapid succession two days before the bar exam. A million thanks.


The commercial paper one was just absolute money. I'm praying we get one on Tuesday.


The review is great and helpful, yes, but I think actually wanting a commercial paper question is the result of some sort of stockholm syndrome the bar exam has done to us

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crysmissmichelle
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Re: KAPLAN BAR REVIEW hangout

Postby crysmissmichelle » Sun Jul 27, 2014 11:39 pm

I've been having a whole day panic attack. . .somehow these summaries have a truly calming effect. I'll now be the one sitting there typing my exam and saying "Ratified, bitchez!" everywhere I can make it applicable.

Thank you! :D

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soccerfreak
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Re: KAPLAN BAR REVIEW hangout

Postby soccerfreak » Mon Jul 28, 2014 2:14 am

Can anyone tell my why the Vac does not have a PMSI which perfected automatically? The essay answer says it has a security interest, but not a perfected one since Vac never Filed or took Possession.

"Decorator operates a business that sells decorative items for the office. Eight months ago, Decorator borrowed $10,000 from Lender and, pursuant to a properly completed and signed security agreement, granted Lender a security interest in all of Decorator's present and future inventory and equipment to secure that indebtedness. Lender filed a properly completed financing statement on the same day that the loan was made and the security agreement was signed.

Seven months ago, Clockwork and Decorator entered into a signed agreement pursuant to which Decorator bought and received delivery of 25 decorative clocks from Clockwork for resale to Decorator's customers. Under the terms of the agreement, Decorator agreed to pay the $2,500 purchase price in six months. The agreement also provides that, until the payment of the purchase price to Clockwork by Decorator, title to the clocks will be retained by Clockwork. No financing statement was filed in conjunction with this transaction.

Three months ago, Decorator leased an industrial vacuum cleaner from Vac for use in Decorator's business. The lease, which was signed by both parties, provides that, at the end of the four-year lease term (which cannot be terminated early), Decorator will automatically become the owner of the vacuum cleaner so long as all monthly payments have been made. No financing statement was filed in conjunction with this transaction.

Decorator has defaulted on all obligations to Lender, Clockwork, and Vac. Your law firm represents Lender, who has asked the following questions:

1. Who has a superior interest in the clocks? Explain.

2. Who has a superior interest in the vacuum cleaner? Explain."

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Re: KAPLAN BAR REVIEW hangout

Postby notedgarfigaro » Mon Jul 28, 2014 7:19 am

soccerfreak wrote:
bazinga! wrote:
soccerfreak wrote:Alright guys, my primary distraction of the past week has finally culminated in a first date, possibly the night of the exam. Am I doing bar studying completely right, or completely wrong?


Tuesday night or Wednesday night? Wednesday night - then bravo and well done. Tuesday night...I don't see that date going great for either of you.

Oh gosh. Yea Wednesday night, I'm not completely insane.


Is she cute/do I know her?

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Re: KAPLAN BAR REVIEW hangout

Postby DMXdawg » Mon Jul 28, 2014 8:09 am

soccerfreak wrote:Can anyone tell my why the Vac does not have a PMSI which perfected automatically? The essay answer says it has a security interest, but not a perfected one since Vac never Filed or took Possession.

"Decorator operates a business that sells decorative items for the office. Eight months ago, Decorator borrowed $10,000 from Lender and, pursuant to a properly completed and signed security agreement, granted Lender a security interest in all of Decorator's present and future inventory and equipment to secure that indebtedness. Lender filed a properly completed financing statement on the same day that the loan was made and the security agreement was signed.

Seven months ago, Clockwork and Decorator entered into a signed agreement pursuant to which Decorator bought and received delivery of 25 decorative clocks from Clockwork for resale to Decorator's customers. Under the terms of the agreement, Decorator agreed to pay the $2,500 purchase price in six months. The agreement also provides that, until the payment of the purchase price to Clockwork by Decorator, title to the clocks will be retained by Clockwork. No financing statement was filed in conjunction with this transaction.

Three months ago, Decorator leased an industrial vacuum cleaner from Vac for use in Decorator's business. The lease, which was signed by both parties, provides that, at the end of the four-year lease term (which cannot be terminated early), Decorator will automatically become the owner of the vacuum cleaner so long as all monthly payments have been made. No financing statement was filed in conjunction with this transaction.

Decorator has defaulted on all obligations to Lender, Clockwork, and Vac. Your law firm represents Lender, who has asked the following questions:

1. Who has a superior interest in the clocks? Explain.

2. Who has a superior interest in the vacuum cleaner? Explain."


For a non-consumer transaction, one needs to perfect a PMSI within 20 days. Notice the statement: "No financing statement was filed in conjunction with this transaction." Therefore, the PMSI superpriority became ineffective after 20 days...

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Tanicius
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Re: KAPLAN BAR REVIEW hangout

Postby Tanicius » Mon Jul 28, 2014 8:54 am

Getting Wills done. Should be out in an hour or so.

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Re: KAPLAN BAR REVIEW hangout

Postby JenDarby » Mon Jul 28, 2014 10:43 am

Tanicius wrote:Getting Wills done. Should be out in an hour or so.

What state are you taking again?

Also these are awesome because that's exactly how I read my outlines (add ins and all).

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Tanicius
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Re: KAPLAN BAR REVIEW hangout

Postby Tanicius » Mon Jul 28, 2014 11:08 am

Basics of Wills:

Okay, I don’t know how well this is going to lend itself to a rapid-fire summary. Wills has some unfortunate technical rules that you just have to brute-force your way through to understand. The good news is it should be very easy to recognize issues on a Wills essay because most of the chapters in it concern very different material. You already know what these general issues are:

Why is property sometimes inherited automatically as opposed to by a will (a devise)? How does it work when you’re married and some of your property is locked up with the surviving spouse? Can I disown my shitty kid? What do you actually have to do to create a valid will? Why do jolly family members become bitter, childish bitches when the matriarch dies – like what are they even fighting over? How is the property actually handled when the person dies? And what are some alternatives to wills?

We’ll go through it like this:

1. Introduction to Intestacy and Probate Process, the two dumbest legal words we have to know for this entire test.
2. Identifying the players.
3. The Surviving Spouse gets first crack.
4. Intestate rules
5. A valid will: constructing it properly
6. Substantive strategies the will writer can use.
7. Reasons to fight over whether the will should be valid.
8. The probate process, detailed.

1. Introduction to Intestacy and Probate Process, the two dumbest legal words we have to know for this entire test.

Contrary to what you thought three months ago, the adored “Probate Process” you always hear shitty judges getting remanded to in their local county courts has nothing to do with juvenile rights, punishing crime, or probationary hearings for convicts. Probate means someone wrote a will, and when they die the will has to be “probated” (verified and processed) through the court. Probate is a protective process available to people who are contesting the validity of a will or procedure of the will’s administration (giving out the funds to everyone).

The overall policy concern you need to know about the probate process is that it sucks and everyone hates it! People who write their wills, who are still alive, hate the probate process because they know there’s a chance the court will fuck everything up and give their money and prized possessions to people they don’t want it to go to. This is how everyone imagines the court will act during the probate process: “Oh, what’s that? You thought you validly signed away your house to your favorite grandson? Haha, think again, grandpa. It turns out that you have an outstanding loan of $50,000 to pay back that you never did before your death, so guess what? Bank of America gets to foreclose on your house to take its loan back. Oh, and look at this, you think you signed your piano to your friend Louis, but she helped you write the will, so we have to cut her out due to a law you never heard about called Undue Influence.”

Wow. That sounds pretty miserable. Is it really like that?

The hell do I know?! I’ve never done a probate case. The closest I ever came was when a CPA uncle-in-law of mine told me that one of his clients just gave her entire fortune to a live-in nurse and then died. O.O After taking Trusts & Estates in law school, I told him my professional opinion was that he should talk to a real probate lawyer.

Obviously though, the quality of your will and just how well it’s going to survive the probate process depends on the quality of your attorney and just how complicated you want to make this stuff. Unfortunately, in our essays, the dead person tends to enjoy violating the Rule against Perpetuities and making her family go on a complicated Sodoku puzzle voyage as a matter of course. What you can do is learn these basic rules so that you can at least narrow down the big issues to official, lawyerly conclusions like “This will be a close call, but Grandma probably keeps her husband’s shit.”

Okay, so that’s the probate process. What in infancy, er, intestacy?

The intestacy process is for people who have even less foresight than people who write wills. This is the state-mandated process for when someone either has no will at all or has an invalid will that doesn’t account for everything. The state has invented rules of automatic succession. As a matter of policy, the intestacy rules heavily favor the dead person’s surviving spouse, and then any child of the dead person. From then on down, it’s just a matter of completing a fairly logical system of puzzle rules to determine who gets what and how it’s divided.

That sounds awfully shitty. Can I do something for my own property that is neither probate nor intestacy?

Yes. Everyone with a brain does this: Make a trust account. It’s much better because you can create it while you’re still alive, appoint someone to run it for you complete with those awesome fiduciary duties we talked about in principal/agency law (they can get sued for doing a shitty job, even after you die!), and it can even be distributed over a long period of time after you die instead of one big instant-explosion of property at the time of your death like with wills. Trusts are pretty awesome if you have a good person in charge of running your trust.

Some other alternatives: Pay-on-death contracts, like life insurance, and joint bank accounts. Also, give your shit away before you die! A deed you convey before your death is no longer subject to the reach of a will or the rules of intestate succession.

But you don’t need to worry about this stuff right now.

_________________________________________________________________________
_________________________________________________________________________

2. Identifying the players.

a.) The dead person whose property is getting divided up. Okay, this is what we got: We got the Testator/Decedent. They’re the ones writing the will, or whose property is otherwise going to be subject to the rules of intestate succession if they didn’t write a valid will. They’re only called the testator if they wrote a will. If we’re doing intestate succession, then they’re called the decedent.

b.) Heirs. Who are your heirs? Trick question! You don’t have any heirs until you die! Heirs are only people who take from automatic intestate succession. They are the direct and first takers when someone dies. If you die and your only living relatives are two children, those two children are your heirs. If you die with a wife and two kids, you have only one heir: your wife.

c.) Issue. This is the third-dumbest word you have to learn for the bar exam. Issue is plural for all downward lineal blood/adopted children. Your issue are your kids that you personally are responsible for making with your own genitalia or adopting. If you marry into a relationship with someone else who already has kids, those kids are not your issue unless you formally adopt them.

d.) Non-Issue. These are kids you aren’t responsible for creating and haven’t adopted. There are a few important exceptions though, like “equitable adoption,” where a foster parent tried to adopt and treated the kid as their own, but was never able to fully complete the legal process. In that case, the kid can inherit from his dead foster parent directly, but can’t inherit “through” the dead foster parent from any of the foster parent’s own parents/spouse/devisors. Probably don’t need to know that rule. Additionally, if a non-marital kid can prove paternity after the father dies and the father held the kid out as his own, then that kid will inherit.

e.) Pre-decedent. Anyone who dies before the testator/decedent dies and the property becomes subject to distribution.

f.) Creditors/Third parties. Guess what? They’re baaaaaaaack. These fucking creditors are in every financial/transaction-related subject. They want their money! And they don’t care that the painting you’re giving your nephew in your will holds a very special place in both of your hearts – you should have paid them back that loan you used to re-paint your deck before you died.

g.) The surviving spouse. This person I’m putting at the end because they can screw up a will even more than creditors. The surviving spouse gets his/her share before everyone else in your will/the intestate process. If they’re unsatisfied with your shitty will, they can even choose to take what they would have gotten under intestate rules. This is because, as a matter of policy, we don’t want to leave married people, especially married people who depended on the other person for an income and have no marketable job skills, to be left out in the ocean by themselves. Guess what? You have to know your basic community property or equitable distribution rules to know how much they take. Yeah, sorry. Most important though: the surviving spouse is anyone in a valid marriage with you who did not die or completely divorce you by the time of your death. What’s that? You legally separated and weren’t even living in the same state at your death? That’s cute – you’re still giving half your shit to her because you never formally divorced.


_________________________________________________________________________
_________________________________________________________________________

3. In detail: The Surviving Spouse gets the first crack at the whip.

Okay, so as I just got done saying, you effectively cannot disinherit someone who is legally married to you. Your surviving spouse, so long as they had not fully divorced from you or pre-deceased you, is probably getting approximately half of all your shit whether you like it or not.

I hate my beloved spouse. What can I do to make sure she takes nothing?

Are you deaf? I just told you, you can’t do that. If you hate your spouse, divorce them.

Divorce would take too much time. Just tell me, how much exactly does the surviving spouse get from me?

It depends on whether you live in a community property or equitable distribution state. Remember from your Conflicts of Law materials that the state where the testator/decedent lived at the time of death will most likely control this question.

a.) Community Property State. This is refreshingly easy! If you live in a community property state, your surviving spouse takes half of your property acquired during the marriage, whether or not you write a will! Bam, done! The only stuff that doesn’t count are things you inherited that didn’t have your spouse’s name on it, and gifts in your name. And yes, you read that right – your surviving spouse (SS) takes half your shit even if you wanted to give her less than that in your will.

b.) Equity Distribution/Uniform Probate Code. Fuck this rule. This is really complicated. If you’re in a state where this matters, you’ll want to just review it until it’s memorized. This only matters for intestacy though; however, if the wife is unhappy with teeny gift you give her in your will, then she can elect a share according to the UPC’s intestate rules.

Here are the basic rules:

i. If you and your spouse share all of the same kids, and you have no surviving parents, then the SS takes everything. The idea is that she’ll give both of your property to your kids later on when she dies.

ii. If you have no descendants of any kind but do have a surviving parent, then SS takes $300,000 and 75% of the remainder of your estate, and the rest gets distributed to everyone else by intestate rules.

iii. If your only issue are also issue of the SS, but the SS has other kids of his own that aren’t yours, then the SS takes $225,000 and 50% of your remainder estate, and the rest is divided through intestate rules.

iv. If you have issue that are not related to SS, like kids before your most recent marriage, then SS takes only $150,000 and 50% of the remainder of your estate, and the rest is divided intestate.

Remember: These rules don’t apply for probated wills or Community Property states. However, the surviving spouse in an equity state can still take an intestate share under the UPC’s rules above if he is unhappy with what you gave him in your will.


Define… “surviving” spouse.

Yeah, okay, so there’s technically a time limit we care about. This results in some pretty funny (and shitty) scenarios for spouses. The general rules are:

a.) Putative spouses: (these are invalidly married spouses). They get nothing unless they believed in good faith that they were validly married to you, the testator/decedent.

b.) Common Law survival: If you survive your spouse by one single second in a plane crash that kills both of you, you get his estate, and his estate takes nothing from you.

c.) UPC (the paragon of logic in this sea of stupid law): There’s a 120-hour rule. If you both died within 120 hours of each other, your property each passes to each other’s estate as if you predeceased each other. So, I guess that means your estates basically swap half their shit with each other? I dunno, that would be really weird. But it makes sense on a fairness level.

d.) Define “dead” for me: Hyper-Technical-Man to the rescue! At Common law, if your Circulatory system irreversibly stops, you’re dead. Modern standard says, if your brain dies, only then are your dead. I associate the modern standard with having a brain, because it actually makes more sense.

_________________________________________________________________________
_________________________________________________________________________

4. The Intestate Process.

Okay, so we’ve finally, painstakingly, determined who the intestate issue are, and what chunk of the estate even survives past the surviving spouse to get distributed down your lineal blood line. Thank God.

There are three different modes of intestate succession. I’m truly sorry, but they’re visually complex and could take forever to explain. I think you can safely review your longer outlines or review your prep company’s video lecture on this specific topic, and you’ll probably remember it well enough to do okay.

a.) Per Stirpes (Per Stir-pees is how it’s pronounced. I remember it because it’s too stupid to forget.) How many living issue do you have right now? They get a share. Also, any pre-deceased issue who have issue of their own, get a share, which gets split amongst their own issue.

b.) Per Capita with representation. You just skip your own issue’s line if you don’t have any living issue, and keep going down the lineal chain until you arrive at a generation where there are living people. Then you proceed as if those people are your direct issue and you had no children/grandchildren/greatgrandchildren between them. Apply normal rules of per stirpes at that point.

c.) Per Capita at each generation. This is the complicated one. First, like with representation, you skip down to the generation that has at least one surviving member. Then you giving shares to whoever is still alive. You also see if any dead people at that generation have surviving issue. If so, you pool all the dead peoples’ shares, and split it amongst all issue of predeceased people. Just look at your charts provided by your prep company.

What happens if I have no surviving spouse or issue whatsoever?

Several possibilities. Do you have brothers, sisters, or cousins? If so, the “parentelic” approach finds your nearest collateral line until it finds someone. The “degree of relationship” approach just counts the number of relatives in any direction and chooses the closest person.

The UPC approach is the only one that makes much sense. If you have no spouse or issue, it goes up to your parents. Is one of your parents alive? Then your parent(s) take(s). Are your parents dead? Okay. Did they have any other children/grandchildren? It goes to them in lineal order. Oh, but your parents don’t have any other issue? Alright, then we go to your grandparents. Are they still alive? No? Do your grandparents have any issue? No? Okay, NOW it finally escheats to the state. That’s French or Latin or something for “your hometown gets to buy a new armored car for its police department.”

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_________________________________________________________________________

5. Fuck Intestacy: We’re making a WILL, baby. So… how do we do it?

Two kinds of wills: Formal “attested” wills, or “holographic” wills. Holographic wills are shitty. You want an attested will, trust me.

a.) Holographic Wills. This is a hand-written will, signed by the testator without any witnesses. It could be something as simple as writing your will on a napkin. Holographic wills suck because, in the first place, some states ban them and other hand-written modifications of formal wills. They also suck because they’re unreliable trash. You’re just kind of praying that the court will accept it’s your handwriting and that you weren’t suffering any problems of mental incapacity, duress, or undue influence at the time you wrote it.

b.) Fuck that. Let’s make a real will – the formal attested will. Right on, man. This is what you need: (1) the will must be signed in writing, and two or more witnesses must be able to attest that you signed it.

To what extent must an attested will be signed?

Depends on the state. Some states require the signature to be at the very end of the will, or the entire thing is invalid. Other states will only count as part of the will everything that is above the signature, so if you put your signature in the middle, only the first half will be valid. The point is: the testator must have intent to be signing a will. If he thinks he’s singing a check to McDonalds for a happy meal, that isn’t a valid will.

How do the witnesses work?

A couple of issues you can have fun bullshitting about on the exam:

a.) The witnesses may or may not be required to actually witness the signature of the testator; in some states, they need only be “aware” that the testator is signing it. Like, maybe they’re in the room with the testator when he signs it, or maybe they’re watching him do it over Skype. Or, maybe the testator calls his witnesses up by phone and says “Hey, there’s a document in my desk called Tom’s Will. I’m signing it right now.”

b.) The witness may or may not have to be “disinterested.” Disinterested means that the witness does not stand to gain anything from the will. You can imagine court cases where very interested witnesses say “Trust me, I watched him sign this will that I just pulled out of my pockets. What are the odds right?” At common law, if you don’t have at least two disinterested wills, then the entire will is invalid! Under the “Purge” theory, any interested witness will simply take nothing beyond their intestate share, even if the will gives them a ton. And under the UPC’s approach, we don’t care about interested witnesses at all, and they take whatever’s in the will.

How strictly do all these rules need to be followed?

At common law, if you deviate even a little, you’re fucked and the whole will is thrown out. Under the UPC, “substantial compliance” will allow for the will to be enforced, so long as there’s clear and convincing evidence that this is truly the testator’s intent.

What about oral wills?

Fuck ‘em. They’re never valid anywhere… unless you’re literally dying and have just a few remaining moments and no way to write anything down. You obviously need a witness to testify to your intent in that situation.

Can you modify a will later?

Sure can. You can create a “codicil” that is just a document that gives reference to your previous will and modifies it a little, or you can create a completely new will.

What happens if you destroy the will, like tear it up?

As long as there is enough evidence demonstrating your intent to destroy it, that will shall be considered void, even if there are other copies of the same will that you didn’t get around to destroying.

What if these idiots lose my will after I die, before everything is distributed?

The burden is on the person arguing for something that the will was either destroyed or still in existence. Duplicate wills are okay as long as they aren’t photocopies.

What if I want to revoke a new will or codicil and re-new an old will?

Fucking seriously? Ugh. Yes you can do this. It’s called substitution, and it happens automatically at common law unless you give an indication of your intent not to re-new an earlier will. However, in most states (UPC), you have to give some positive indication of your intent to re-new the old will.

What happens if I give something to my husband in a will, but then divorce him and never write another will?

Don’t worry about it. Divorce is presumed to disinherit a spouse in a will unless you give some other indication of your intent to stay best friends with them in the will and give them the money regardless of marital status at the time of your death. If you say “my spouse” in your will, and you’re married to a different spouse at the time of your death, then your new spouse is going to be the spouse the court gives it to.

Can I make hand-written notes in the margins of a formally attested will?

Why are you asking all these pain-in-the-ass quest— Yes, you can do that, unless the essay’s state has a statute banning holographic wills or handwritten modifications.

What happens if I cross something out and add something into the will, but it turns out only my cross-out is valid and the written addition is invalid under the law? Does that person get nothing?!

That’s called Dependent Relative Revocation. The cross-out revocation will be disregarded if the whole point of crossing something out in the will was to replace it with a provision that you didn’t realize was invalid. This is a super fair, logical rule.

Can I make a binding will via a contract, where both of us make a vow to will something to the other or an intended third party beneficiary?

Seriously, why the fuck would you do that? Yes you can do that. The contract only becomes binding once one of two contracting parties dies. Until then it can be rescinded or modified whenever you want.

Can I reference an independent, unsinged document in my will?

Yes, as long as the independent document is sufficiently identifiable, intentional, and was written before you signed your will. Ex: “Refer to the 100-page word document on my computer called Tanicius’s Will Details.”

_________________________________________________________________________
_________________________________________________________________________

6. Substantive issues and strategies to consider in a will.

These issues concern the nature of the actual gifts you make. This stuff is important because there are legal hierarchies of importance in a will when the estate is not big enough to give everyone what you wanted to give them at the time of your death.

a.) Classifying gifts: specific, general, demonstrative, residuary.

i. Specific gifts are reasonably capable of being distinguished for other gifts.
ii. General gifts use general estate assets, such as “the house,” or “the residuary.”
iii. Demonstrative gifts comes from a “particular source.”
iv. Residuary is everything left over.

b.) Lapsing. This is the rule where, if someone predeceases you before your will gives them anything, normally their issue are shit out of luck and their entire line gets nothing from your will. Most states, and most essay jurisdictions, will have an “anti-lapse” statute that says that blood relatives of the beneficiary in the will still get that gift.

c.) Abatement. DISTINGUISH THIS FROM EXONERATION. They are NOT the same thing. Exoneration involves creditors; abatement does not involve creditors. Abatement is where there has been a reduction or elimination of gifts before you died, so some people aren’t getting what they were promised in the will. There’s a priority to help these people out, but it will fuck up the gifts that other people. It works in a hierarchy:

i. First, you get rid of intestate property.
ii. Then you get rid of residuary gifts.
iii. Then you get rid of general bequests to non-relatives.
iv. Then you get rid of general gifts to relatives.
v. Then you get rid of specific gifts to non-relatives.
vi. Then you get rid of specific gifts to relatives. (Demonstrative gifts count as specific gifts here).

What is the point of abatement hierarchies?

We operate under this assumption that some property is more important and treasured than other property, and that some people are naturally going to be more important and treasured by the testator. Accordingly, if someone’s specific gift is lacking in funding, we’ll give them someone else’s residuary share because we don’t care about the people who are getting residuary property as much.

d.) Ademption. This is where the testator has affirmatively gotten rid of property he promised in his will before he died. He promises his car to his son, but then when he was 80-years-old he decided “Fuck it, I don’t have a driver’s license anymore and I could use the money, so I’ll sell my car.” Well, now what is the poor son getting? Nothing! Because we assume that the testator was well aware of the effect this would have on his beneficiaries when he made the choice to sell his property. CAVEAT: Under the UPC, the testator has to affirmatively write “this is in satisfaction of my will gift” or it won’t count as a satisfaction and things will get fucked up.

We assume ademption only applies to specific gifts. If you say you’re giving “the house” to someone, and you’ve since sold the house you owned at the time of signing your will and have purchased a new house, that’s a general gift and will still go to the person you gave “the house” to. But if you promised someone “the 100,000 shares of Apple” and have since sold your Apple shares and bought Google shares, the person you promised the Apple shares to gets nothing.

How is ademption different from abatement? Abatement is when there are unexpected circumstances that make pieces of property not as valuable as they were intended to be in the will. Ademption is where the testator makes the choice to get rid of property he promised to someone. We try to help people out when abatement occurs; we leave you to swim with the fishes when ademption occurs.

e.) Ademption by satisfaction. This is where the testator gave a gift promised in the will, to the same named beneficiary, before the testator died and the will sprung into action. So you promised your son you would give him your car in your will, and then you gave him your car before you ever died. He doesn’t get to double-dip into your will and whine and moan about how everyone else is getting something and he’s getting nothing. The little shit got his gift earlier than everyone else. Sorry little Kyle, but when Christmas comes early you don’t get extra gifts under the tree just to make you feel better.

f.) Exoneration of liens and debts. Two rules.

i. At common law, the beneficiary who is receiving real property is entitled to use other people’s property to pay off a lien on the real property. Really shitty right? That’s abatement in action. We care about general gifts like real property more than we care about your stupid family painting, so if the court has to sell off your painting to satisfy a bank’s outstanding mortgage or lien on the house that’s being given to your aunt, tough shit.

ii. Under the UPC, the beneficiary of real property has no entitlement to have anything paid off. If they want to keep the real property gift subject to the lien, then they either have to pay it off themselves, or it’s gonna get foreclosed. The policy is, it wasn’t really your property to own in the first place – you’re getting a gift you ungrateful little shit, so you shouldn’t complain if there are imperfections like encumbrances and liens on the property you inherit.

Okay that’s all well and good. Can we talk about disinheriting people and shit like that? I want to give my spouse a box of pencils and that’s it.

Christ you’re an ass. It’s pretty straight-forward. You can disinherit kids if you want, but you can’t disinherit your surviving spouse, and if you give your spouse a crap gift, they can just elect to take what they would get under intestacy, which you may remember is a huge chunk of your property.

Can people be ungrateful douchenozzles and refuse my gifts? I want to give my niece a car that has a hornet’s nest infestation, lol.

Yeah you can do that, and she can also refuse the gift as long as she does so in good faith after being informed of the gift.

I think my kid is going to murder me. Do I need to change my will to make sure they get nothing?

No just trust in the PoPo, dude. They’ll prosecute your kid and under the “SLAYER DOCTRINE” your kid will get nothing.

What happens if I write a will giving everything to my three kids, but then I have more kids and forget to add them in?

There’s a presumption that you mistakenly forgot to add your new children. Your older kids will lose a share of their gift that will go to your new kids.

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7. Reasons to fight over the validity of a will.

So you’re the money-grubbing son-in-law who just found out that the father-in-law you always argued politics with has died and isn’t giving your wife much of anything? Well, here’s how you can go about attacking his will:

a.) First, you need standing. People who do not stand to directly take from a will or intestate shares have no standing and cannot contest a will. This means that a son-in-law can’t contest a will in court, even if his wife stands to gain a lot of stuff from her father, because the son-in-law himself doesn’t actually stand to gain anything directly. His wife would have to be the one who’s named on the court documents as the contesting party. General creditors have no standing to attack a will; they have their own laws to sort out how they get their money, subject to the loan paperwork that was signed.

b.) The testator requires testamentary capacity. The testator must, at the time of executing his will, know the nature of his property, the natural objects of his bounty, and the disposition plan – what it means in the grand scheme. The testator need not be aware of intricate lawyerly details, but they must understand, generally, where their shit is going and to whom. If they did not have this capacity at the time of the will’s execution, either because of their young age or mental incapacity, then the will is subject to attack by pissed-off parties.

c.) The testator had an insane delusion. “I’m giving all of my property to my nurse Alice because when the Martians invade she will need every penny she can get to save the world.” You use the rational person test: if a rational person could not have reached the same belief, it is an insane delusion. Also requires causation. If the testator would have given his property to someone with or without the insane delusion, then the delusion doesn’t matter and the will is still valid.

d.) Undue influence. This is probably the biggest opportunity for attack. If anyone benefitting from a will had a position of authority over the testator, or if the testator was particularly vulnerable to their advice, such as an old lady with a live-in nurse, or an attorney who coincidentally benefits from a will of someone he’s not related to, etc… Then the court is going to have a problem. There is a reverse presumption where the person with influence must prove by a preponderance that they did not exert it unduly. Husband and wife relationships don’t count as undue influence.

e.) Fraud. Well, duh. If you lied to the testator about their assets, or if you forged their will.

f.) Forfeiture clause. This is my favorite rule in all of Wills. You can write a clause into your will saying that if anyone contests their gift, they lose the right to receive anything. LOL! This is a great deterrent for money-grubbing relatives who always beg you for money. However, under the UPC, in most jurisdictions if the contestant has probable cause to contest their gift as inaccurate or mistaken or fraudulent or something, then they are allowed to do so.

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8. The Probate Administrative Process, detailed.

Okay, last section, finally. These are just some rules about how the estate must be administered when someone dies.

a.) Time limit. At common law, there is no limit. Under UPC, the estate must be probated within three years of the testator’s death, or the property escheats to the state and the cops get to use the proceeds to buy a tank for their SWAT team.

b.) Jurisdiction. Wherever the testator is domiciled.

c.) Notice: must be given to all interested parties, including indirectly interested parties such as creditors.

d.) Priorities of Property Distribution: VERY IMPORTANT. First, all court and administrative expenses get paid. Then deathbed medical and funeral expenses get paid (or those services wouldn’t exist because they’d never get paid). Then taxes, then secured parties, then liens and judgments, and THEN finally the estate can be distributed to everyone named in the will.

e.) Who is the person who takes care of this shit? The Executor/Administrator. Executors are named in a will; administrators are appointed by the probate court if there is no named executor. They have several duties: give notice to everyone, analyze and inventory the estate, pay out claims to creditors, and distribute everything remaining to the willed parties. They have a fiduciary duty of loyalty and care and can get sued for violating it out of carelessness or a conflict of interest!

What is Power of Attorney? I keep hearing that.

Power of attorney is a power you give someone to administrate your affairs before you die. You can give someone a general power of appointment, so your designated official can give people to property how they deem best for your interests, or you can give them a special power of appointment, which limits the power they can exercise over your estate while you are still alive. The person giving a power of attorney has the power, within the scope of a fiduciary duty owed to you, to exercise contracts, decide your medical treatment, convey property, and will away parts of your estate, in ways meant to further your interests.

The power of attorney can be limited or it can be durable. If it’s durable, it remains even while you’re incapacitated in a hospital and unable to argue with them. Don’t give anyone this power unless you’re willing to deal with the consequences. They can only be sued for intentional misconduct. If you are able, you as the principal can revoke their power at any time prior to your death.

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That’s all for wills! Quite a trip. Hope this isn’t too complicated for you. On the downside, there’s a lot of material here. On the upside, it’s not that complicated to understand – there’s just so much of it.
Last edited by Tanicius on Mon Jul 28, 2014 11:27 am, edited 2 times in total.

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spleenworship
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Re: KAPLAN BAR REVIEW hangout

Postby spleenworship » Mon Jul 28, 2014 11:15 am

Thanks Bro!

Once again, amazing job.

Get some rest today and good luck tomorrow bro.




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