Estate planning
The process of giving away property after and in anticipation of death
Estate
The legal entity that holds title to assets after the owner dies and before the property is distributed
Decedent
The person who has died
Testator or testatrix
Someone who signed a valid will (-trix is the female version)
Intestate
To die without a will
Heir
Someone who inherits from a decedent who died intestate
Devisee
Someone who inherits under a will
Issue
A persons direct descendants such as children and grandchildren
Probate
The process of carrying out the terms of a will
Executor or executrix
A personal representative chosen by the decedent to carry out the terms of the will (-trix is female)
Administrator or administratrix
A personal representative appointed by the probate court to oversee the probate process for someone who has died intestate
Grantor or settlor
Someone who creates a trust
Donor
Someone who makes a gift or creates a trust
What are the two main goals of estate planning?
-to ensure that property is distributed as the owner desires
-to minimize estate taxes
What are probate codes under the probate law?
States have probate codes to regulate the creation and implementation of wills and trusts
What is the UPC
Uniform Probate Code
-only half the states have it
Will
A legal document that disposed of the testator property after dearth
-it can be revoked or altered at any time until death
Why should people have wills?
-ensure their assets are distributed according to their wishes
-provide guardians for minors
-have a representative to oversee the estate
-avoid unnecessary expenses
-to say what you really think
What are the requirements for being a testatrix (person who signs a will)?
-be 18
-be sound of mind
-acting without undue influence
What requirements must a testator (person who signs a will) follow?
-must be in writing
-the testator must sign it or have someone sign it for him if he is too weak
-two witnesses must sign as well
-no one named in the will should sign as a witness
Holographic will
A will that is handwritten and signed by the testator but not witnessed
-must be in a testators handwriting for states to count it
Nuncupative will
An oral will
-for personal property only, not real estate
A nuncupative will is valid only when:
-the testator is dying
-there are two witnesses
-those witnesses know they are listening to a will being said
What is different about community property states?
A spouse can override a will and claim one half of all marital property acquired during the marriage
In most non community property states, can the spouse still override the will?
Yes, a spouse can override the will and claim some percentage of the decedent estate
Forced share or statutory share
The percentage of a decedents estate that a spouse is entitled to claim
Pretermitted child
A child who is left nothing under the parents will
Info on pretermitted children
If a child was left out of the will, courts presume it was by accident unless the parent states that the child gets nothing
-they have to leave the kid some nominal amount like $1
Why do wills use the term "issue" instead of children?
Because if the child dies, then the property can be passed on to the grandchildren. If the will just says "my children" then the grandkids get nothing
Per stirpes
Each branch of the family receives an equal amount of money left in the will
Per capita
Each heir receives the same amount of money left in the will
What do wills have to include when talking about money?
If the money is being left per stirpes or per capita
Digital assets
Computers, phones, photos, music, etc
What are rules of inheriting digital assets?
-service provider policies: i.e. Facebook can deactivate dead people
-federal statutes: there is an electronics communication act that can limit information that companies like Facebook can give out
-state statutes: some executors can have the right to ac
Codicil
An amendment to a will
- it must meet all of the same requirements that a will does
What happens when someone dies intestate (without a will)?
The law steps in and determines how to distribute the decedents property
Power of attorney
A document that permits the attorney-in-fact to act for the principal
When is a durable power valid?
Even if the principal can no longer make decisions for herself
Immediate piwer
Becomes effective when signed
Springing power
Becomes effective some time in the future, typically when the principal becomes incompetent
When power do courts normally recommend?
A durable power of attorney
What are three things that a will does not control?
-distribution of joint property
-retirement benefits
-life insurance
Life insurance
Provides payments to a beneficiary upon the death of the insured
Anatomical gifts
Donating your organs when you die
How to register to be an organ donor:
-under UAGA (by adding it to your will)
-using the organ donor ecard app
-putting it on your drivers license
Why do we have living wills?
Most people cannot make decisions about their medical decisions at the end of their lives
-also called advance directives
What do living wills allow people to do?
-appoint a health care proxy
-refuse medical treatment that would unreasonably prolong their life
-resolve disputes among family members
Physician assisted dealth
-assisted suicide
-allowed in four states: Montana, Oregon, Vermont, and Washington
Trust
An entity that separates the legal and beneficiary ownership of assets
-it is a way to manage assets during life and after life
Who's are the three people involved in a trust?
-grantor (who creates and funds it)
-trustee (who manages the assets)
-beneficiary (who receives the financial proceeds
What are the four requirements for establishing a trust?
-legal capacity (age and sound of mind)
-trustee (grantor must appoint a trustee and it can be the grantor himself)
-beneficiary (has to specify who the beneficiaries are but it doesn't have to list there names it can just say my kids)
-trust property (mu
UTC
Uniform Trust Code
-about half of the states have something like this
What are some advantages of a trust?
-control of assets
-care for children
-tax savings (trusts can reduce estate tax)
-privacy (the public cannot look at someone's trust but the public can look at someone's will)
-probate (assets put into a trust before the grantor dies do not go through a
What are the disadvantages of having a trust?
-the expense
-trustees normally charge a 1% annual fee of the trust assets
-the income tax can be higher if the trust is held by an individual
What are the two types of trusts?
-living trust
-testamentary trust
Living trust or inter vivos trust
Established while the grantor is alive
-the grantor is normally the trustee
-they are typically revocable
-popular with older people
Revocable teusts
Meaning the grantor can terminate or change the trust at any time
Testamentary trust
-created by a will and goes into effect when the grantor dies
-irrevocable
-property much go through probate first
-popular with younger people