Chapter 51 Flashcards
Testator(male)/Testatrix(female):
the name of the party who is writing the will
Testate:
if we die with a will, we die testate
Testamentary Disposition of property:
fancy phrase for the will
Probate and Probate Court:
a court procedure, the process of identifying all of the testator’s assets and distributing them to whatever the will states.
Executor/Executrix:
personal representative of the testator
Administrator:
if there is no will present (usually a family member)
Intestate:
if we die without a will, we die intestate
Intestacy Laws:
No will. Is the testator married? Do they have children? Is there a second marriage? Etc.
Escheat:
if the court can find no heirs at all, the property “escheats” to the state
Devise:
refer to gifts within the will. A gift of real property in the will.
Bequest
A gift of personal property by will (from the verb to bequeath).
Legacy
A gift of personal property under a will.
Examples of a general bequest or devise:
“I devise all my real property to David”
“I make a bequest of 2 diamonds worth $10,000 to…”
“I bequeath $30,000 to my nephew, Carl”
Examples of Specific Bequest or Devise:
“I devise all the lands making up Hailey Bar W Ranch to my children in equal shares, per stirpes”
“I bequeath all my jewelry to my daughters, in equal shares, per stirpes”
Types of gifts:
- General
- Specific
- Residuary
- Abatement
- Lapsed Legacies
Residuary
a good will, will always have a residuary clause. Catches anything that is not already otherwise identified.
Abatement
an insolvent estate. The debts exceed the assets. You have to pay the debts first. The heirs may not get what they thought they would get because you have to liquidate assets.
Lapsed Legacies
present when you have someone named in the will and they die before the testator, and the will doesn’t address what happens to the specific item that was supposed to be given to them
Requirements for a Valid Will in Texas
- in writing,
- signed by you, or another person at your direction and in your presence, and
- attested in your presence by at least two credible witnesses over the age of 14.
- must be at least 18 years of age
- must have testamentary capacity
- must intend to dispose of his/her property under the will
Holographic Will
A will that must be written completely in the testator’s own handwriting, and signed by the testator. They are valid in Texas.
Nuncupative Will
An oral will made before witnesses usually during a last illness. NOT valid in Texas.
Revocation of Wills
- Revocation by a physical act
- Revocation by a subsequent writing
- Revocation by operation of law
Muniment of Title
Simplified probate procedures
You are allowed to do it when the testator has died with no unpaid debts other than a debt secured by a lien on real property (like a mortgage)
Much quicker!
Can you have a muniment of title when there is an outstanding lease?
No
Formal Probate
Appointed executor or administrator.
They take all the assets and identify them, there has to be an accounting of all the debts and assets.
Could be a very slow process.
Property Transfers Outside of Probate
- Living trusts
- Life insurance policies
- Accounts owned by joint tenants/beneficiary designation
- Gifts made prior to death
- Transfer on death deed
Gift and lifetime exemption amounts:
$17,000 (gift)
$12.06 million (lifetime exemption)
$23 million (couple lifetime exemption)
Lady bird deed
Transfer on Death Deed. Allowed in Texas. Transfers of real property, must be executed prior to death or incapacity.
Per Stirpes Distribution vs. Per Capita Distribution
(apply when there is a will and when the decedent dies intestate)
Per Stirpes
means within a class or group of distributees, like grandchildren; the children of a descendant take the share that their deceased parent would have been entitled to if parent had lived; if a grandchild has no siblings they get the parent’s entire share; if a grandchild has siblings they all divide the parent’s share among them. (used under Texas laws of intestacy)
Per Capita
means each person in a class takes an equal share of the estate; so 3 grandchildren each get a 1/3 share
Intestacy Laws in Texas: Survived by a spouse and children who are also children of the spouse
In this case, the surviving spouse will inherit all of the deceased spouse’s community property plus one-third (1/3) of the deceased spouse’s separate personal property and the right to use the real estate for life, and the deceased spouse’s children will inherit the balance, per stirpes.
Intestacy Laws in Texas: Survived by a spouse and children who are not the children of the surviving spouse
In this case, the surviving spouse will inherit one-third (1/3) of the deceased spouse’ separate personal property and the right to use the real estate for life, and the deceased spouse’s children inherit everything else, including the deceased spouse’s one-half (1/2) interest in the community property, per stirpes.
Intestacy Laws in Texas: Survived by a spouse and no descendants or parents
In this case, the surviving spouse will inherit the deceased spouse’s entire probate estate.
Living Trust
a trust created by a grantor during her or his lifetime.
at the grantor’s death, assets held in a living trust can pass to the heirs without going through probate.
Revocable Living Trusts
the grantor retains control over the trust property during her or his lifetime. The grantor deeds the property to the trustee but retains the power to amend, alter, or revoke the trust during her or his lifetime.
Irrevocable Living Trusts
the grantor permanently gives up control over the property to the trustee. The grantor executes a trust deed, and legal title to the trust property passes to the named trustee.
Testamentary Trusts
A trust that is created by will and therefore does not take effect until the death of the testator.
Charitable Trusts
A trust in which the property held by the trustee must be used for a charitable purpose, such as the advancement of health, education, or religion.
Spendthrift Trusts
A trust created to protect the beneficiary from spending all the funds to which she or he is entitled. Only a certain portion of the total amount is given to the beneficiary at any one time, and most states prohibit creditors from attaching assets of the trust.
Totten Trusts
A trust created when a person deposits funds in his or her own name for a specific beneficiary, who will receive the funds on the depositor’s death. The trust is revocable at will until the depositor dies or completes the gift.
Constructive Trusts
An equitable trust that is imposed in the interests of fairness and justice when someone wrongfully holds legal title to property.
Resulting Trusts
An implied trust that arises when one party holds the legal title to another’s property only for that other’s benefit.
Trustee’s duties
- Maintain clear and accurate accounts of the trust’s administration.
- Furnish complete and correct information to the beneficiary.
- Keep trust assets separate from her or his own assets.
- Pay to an income beneficiary the net income of the trust assets at reasonable intervals.
- Limit the risk of loss from investments by reasonable diversification and dispose of assets that do not represent prudent investments.
When does a trust terminate?
When the specific date stated comes, when the purpose is fulfilled, or if the purpose becomes illegal/impossible
Statutory Durable Power of Attorney
A document that authorizes a person to act on behalf of another person—write checks, collect insurance proceeds, and otherwise manage the disabled person’s affairs, including health care—when that person becomes incapacitated.
Healthcare Power of Attorney
A document that designates a person who will have the power to choose what type of and how much medical treatment a person who is unable to make such a choice will receive.
Living Will (Directive to Physicians)
stating your wishes on your continuous lifesupport
