Wilma was a singer and actress.  Her TV show was wildly popular with teenage girls.  By age 18, she had amassed a small fortune worth several million dollars and a house on the beach in Malibu.  Because her mother died young from a rare disease that is transmitted genetically, Wilma decided to draft a will, even though she was only 18.  She did some research on the internet and decided she knew how to do it.  So she typed it on her laptop, printed it, and then signed it in the presence of her father and her friend Jane, who was 17 years old at the time.  She told them it was her will.  Her father and Jane then also signed it. Under the law, the signature of a witness under 18 years old is invalid.

    The will gave the Malibu house to Wilma’s father.  The rest of the estate went into a trust (Wilma’s aunt Tess is the trustee) that is to pay the net income to Wilma’s only sibling, a severely disabled brother named Bro.  (For the past several years Wilma had paid for Bro’s care in an excellent but expensive private institution.)  When Bro dies, the remainder goes to a charity, Habitat for Humanity.  Wilma did not know a lot about Habitat, but did some research and decided it would be a good cause to support (the charity builds housing for low income people).

    Three years later, when Wilma was 21, she and her father were traveling by car to a concert when a large truck smashed into them.  Dad was instantly killed and Wilma survived for two days before succumbing to her injuries.

Question 1:  Is the will valid? [this is about 60% of possible points]
NOTE: In answering this question, not discuss the details of intestacy or who would receive the estate (if it arises).  The only issue here is the validity of the will.


    Assume now that the will is valid and that the trust went into effect for a period of ten years, until Bro died.  Aunt Tess was a housewife who had become a financial wizard through research and study, which allowed her to turn her modest savings into a substantial fortune.  She decided that the trust needed a lot of income to pay for Bro’s care.  She therefore invested all of the corpus in a diversified portfolio of  high-yield stocks and corporate bonds that produced above average income but did not appreciate much in value.  Overall, the trust’s stocks and bonds produced better returns than the average trust during its 10 year existence.

      Even though the investments produced good income, the cost of Bro’s care increased so much that Aunt Tess decided to use some of the principal to pay for it.  If she had not invaded principal, she would have had to move Bro to a state hospital or cheaper institution that would be less able to treat Bro’s condition.

    After Bro’s death, representatives of Habitat come to you, a newly minted lawyer, and ask if they have any basis to sue Tess for breach of fiduciary duty.  They are disappointed in the small size of the trust remainder after Bro’s death.  

Question 2:  Did Tess breach any fiduciary duties? [around 40%]