and legatees are interested, and high priced experts are employed, may mean that the contested estate will be eaten up by legal fees and expenses and the contestants gain nothing.

§51. Compromising

If a will contest can be closed by a satisfactory compromise, that is, so that everyone interested in the will has his rightful dues, it is far better to do so than to carry on an expensive contest. If those who have property to leave object to the free-for-all scramble so often characteristic of will contests, they can avoid it by making reasonable wills or by making final disposition of their property before they become feeble in mind or body.

REVIEW QUESTIONS

1. Why is it difficult to break a will? What makes such litigation costly?

2. What are the usual grounds for contesting a will?

3. How much mental capacity is required to make a will? If a will

seemed arbitrary and unnatural, would that fact affect the judgment of the court where a will is contested on the ground that the testator was incapable?

4. What is meant by a "lucid interval"? Why is it difficult to define such insanity as would disqualify a person from making a will? In a doubtful case, in what way would the character of the will affect the decision?

5. What is undue influence as distinguished from proper influence? What effect would the character of the will have on the suspicion of undue influence?

6. Under what circumstances might a will be secured by fraud? Why are fraud and forgery in connection with wills of rare occurrence?

7. Is it just that a man's will should be refused probate because he did not sign till after the witnesses had signed, or because the witnesses signed the next day, or because he acknowledged

it before a notary instead of having it witnessed, or because he had only one witness?

8. In what court in your state should a man's will be probated?

9. How is a will contest commenced? Is the evidence of the witnesses to the will important?

10. Who may contest the probate of a will? Who may defend it? What is the question at issue in such cases? What is the burden of proof? Who has the burden of proof in a will case?

11. How may will contests be avoided?

CHAPTER VII

VOLUNTARY TRUSTS

§ 52. Property in Trust

Property, real or personal, may be placed in the possession of anyone in trust for any lawful purposes. If Victory bonds to the amount of $20,000 were placed in the possession of Warren Meade by Harvey K. Hastings, "in trust to hold and to pay over the income in quarterly payments to the legal guardian of my child Ellen Hastings during her minority," a trust would be created, i.e., the arrangement would be a trust or a trust estate. Warren Meade would be trustee and he would as trustee have the legal title to the bonds. Ellen Hastings would be the beneficiary, or in legal parlance the cestui que trust.

The instrument by which such a trust of personal property was created would be called a "declaration of trust." If it conveyed real estate it would be a "deed of trust." A trust in either real or personal property may also be created by will. In such case, however, it would not be called a "voluntary trust," but a "testamentary trust." The property so held in trust is called a "trust estate." The object of creating a trust estate is usually to provide for someone dependent on the person who creates the trust. If Ellen Hastings were the infant child of the creator of the trust, she would receive the benefit of the income of the Victory bonds until she came of age. It is surer than a will because it comes into existence at once, and a subsequent loss of fortune or of mind by her father would not affect her small but sure maintenance from the trust estate.

The illustration given is couched in the simplest terms. Many variations and extensions of the principle are possible. Some of these will be indicated in the further sections of this chapter. The trustee may be a single person, or a financial corporation such as a trust company, or a bank; or two or three individuals might be grouped. The better plan in most cases would be to make over the trust property to a bank or a trust company. In every respect such an institution can fulfil a trust for private purposes more effectively than can any individual or group of individuals. Where the trust is for large charitable or educational purposes, a board of trustees may advantageously be organized, such as the Russell Sage Foundation and the similar organizations by Carnegie, Rockefeller, and others.

A trust created by a person for private ends is loosely termed a "voluntary trust," because he goes into it of his own free will, without any consideration, and not because he has agreed to or is compelled to. Because there is no consideration moving to the creator of the trust, and because it is purely voluntary, he cannot be compelled to carry out any promise to make a trust. As with a gift, however, once made the action cannot be recalled, unless a power of revocation accompanied the declaration of the trust.

The annual fee paid trustees in New York for collecting and paying over incomes is 5 per cent on the first $1,000 and 22 per cent on the next $10,000, and 1 per cent on each additional $1,000.

The subject of trusts is of considerable importance in law and is treated more fully in Part IV of this work.

§ 53. Title to Trust Property

Whoever creates a trust must have the legal title to the property. This legal title is transferred to the trustee or trustees, and is so held for the term of the trust. The trustee

holds the legal title, and the beneficiary or beneficiaries hold the beneficial interest or equitable title. If any dispute arises as to the trust the beneficiaries cannot go into a court of law because they do not hold the legal title, but have to resort to a court of equity.1

It is said that the trustee holds the legal title and the beneficiary or cestui que trust holds the equitable title. In law this relates to the court where suit must be brought in case of difficulty. The trust property, if real estate, is charged by the deed of trust with the interest of the beneficiary when the deed is recorded, and anyone who buys it buys it with notice of the trust attached and can be compelled to pay over the income to the beneficiary. If instead the trust estate were bonds, stock, or other personal property, the trust would not attach to the property, and if an irresponsible trustee who had given no bond sold it, the beneficiary could not follow the property, or compel the purchaser to pay him the income.

This means that the trustees should themselves be responsible financially or should be under bond to fulfil the conditions. of their trust.

Note:

1. It is usually most satisfactory to have a bank or a trust company act as trustee.

§ 54. The Trustee's Duty

The duties of a trustee are very clearly laid down in the law. His first duty is to preserve safely the principal of the estate committed to his charge. The general rule is that trust funds are not in any case to be mingled with any other funds or assets of the trustee. If deposited in a bank they should be in a special deposit and the name of the account should indicate that it is a trust fund.

1 For an explanation of the very technical_distinction between "law" and "equity," see Woodruff, Introduction to the Study of Law, pp. 46-52, or Conyngton, Business Law, Chapter IV.