IN Bar Multistate Essay 3 — Questions and Answers
Question 1: In a decedents' estates essay, a testator executes a valid will, then writes 'VOID' across every page and signs it, intending revocation. The will is most likely:
- Revoked by physical act, because cancellation with intent to revoke suffices (Correct answer)
- Still valid, because 'VOID' is not a recognized revocation method
- Only partially revoked as to signed pages
- Valid unless the testator also destroys all copies
Correct answer: Revoked by physical act, because cancellation with intent to revoke suffices
A will is revoked by a physical act such as cancellation performed on the will with concurrent intent to revoke.
Question 2: A corporation's board approves a merger in which several directors have a personal financial stake they did not disclose. On the MEE, shareholders challenging the deal will most likely argue the directors breached the duty of:
- Loyalty, shifting the burden to the directors to prove entire fairness (Correct answer)
- Care, protected absolutely by the business judgment rule
- Obedience, for exceeding corporate purposes
- Good faith bargaining under labor law
Correct answer: Loyalty, shifting the burden to the directors to prove entire fairness
Undisclosed self-interest in a transaction implicates the duty of loyalty, removing business judgment protection and requiring the directors to show the deal was entirely fair.
Question 3: In a UCC Article 9 essay, two creditors have perfected security interests in the same collateral: Creditor A filed first but attached later; Creditor B attached first but filed later. Who has priority?
- Creditor A, because priority goes to the first to file or perfect (Correct answer)
- Creditor B, because attachment always controls priority
- They share pro rata as equal perfected creditors
- Neither; the debtor's trustee takes the collateral
Correct answer: Creditor A, because priority goes to the first to file or perfect
Between perfected secured parties, priority goes to the first to file or perfect, whichever occurs first, so an early filing wins even if attachment came later.
Question 4: A civil procedure essay asks whether a federal court sitting in diversity must apply state law on the burden of proof. Under Erie doctrine principles tested on the MEE, burden of proof is:
- Substantive, so state law applies (Correct answer)
- Procedural, so federal common law applies
- Governed by the law of the forum's neighboring states
- Decided by the jury as a question of fact
Correct answer: Substantive, so state law applies
Burden of proof is outcome-determinative and treated as substantive under Erie, so a federal diversity court applies state law.
Question 5: In a family law essay, a court divides marital property in a divorce. Under equitable distribution principles used in most states including Indiana, property acquired by one spouse's inheritance during the marriage is:
- Potentially divisible, since Indiana presumptively includes all property in the marital pot subject to rebuttal (Correct answer)
- Automatically excluded from division in every state
- Always split 50-50 regardless of source
- Forfeited to the state absent a will
Correct answer: Potentially divisible, since Indiana presumptively includes all property in the marital pot subject to rebuttal
Indiana's one-pot theory presumptively includes all property owned by either spouse in the divisible estate, though inheritance can support an unequal division.
Question 6: A settlor creates a revocable trust and later becomes incapacitated. On the MEE, who may exercise the settlor's power to revoke under the Uniform Trust Code?
- An agent under a power of attorney if expressly authorized, or a conservator with court approval (Correct answer)
- Any adult beneficiary by majority vote
- The trustee, at its sole discretion
- No one; the trust becomes irrevocable permanently
Correct answer: An agent under a power of attorney if expressly authorized, or a conservator with court approval
Under the UTC, a settlor's revocation power may be exercised by an authorized agent or by a conservator or guardian with court approval.
Question 7: In a negotiable instruments essay, a check is payable 'to the order of John Smith.' A thief steals it, forges Smith's indorsement, and cashes it at a bank. As between Smith and the bank, who bears the loss?
- The bank, because a forged indorsement is ineffective to negotiate order paper (Correct answer)
- Smith, because possession of a check transfers title
- Smith, because he should have used electronic payment
- The bank and Smith share the loss equally
Correct answer: The bank, because a forged indorsement is ineffective to negotiate order paper
A forged necessary indorsement prevents anyone from becoming a holder, so the payee retains rights and the bank that paid over the forgery bears the loss.
IN Bar Multistate Essay 3
In a decedents' estates essay, a testator executes a valid will, then writes 'VOID' across every page and signs it, intending revocation.
The will is most likely: