Estate Planning Documents Flashcards
(28 cards)
Bequest
property left to a beneficiary under the provisions of a will
Pour-over will
A will that has a previously established trust as its primary beneficiary. Funded through probate. Assets transferred from the pour-over will into the trust are subject to probate.
Precatory language
Language in a will that uses terms as “hope, wish, or desire”, which may not be enforceable the by probate court.
Residuary clause
A class in a will that directs the testator’s property that was not disposed of through other will clauses. Can pass to others or an existing trust. These clauses prevent partial intestacy of property after all payments are addressed.
Dispositive clause
A clause in a will that names a class of beneficiaries to receive property, such as “descendants” or “issue” who are lineal family members
Per capita (clause in a will)
A clause in a will that means that all living family members would receive an equal share of the property
Fudiciary appointment clause
A clause in a will appoints primary and contingent executors, guardians, and trustees for testamentary trusts.
Tax apportionment clause
A clause in a will that designates the source for payment of death taxes.
Simultaneous death statute
A statute in a will that determines the order of death if it cannot be determined which spouse actually survived the other. This avoids having two probate process and death taxes levied on the same property, if the other spouse does not live long enough to enjoy the property.
Divorce or annulment statute
A statute in a will that address how property should be handled if the spouse who was the original beneficiary is no longer married to the deceased
Situs
laws of the state where the land is located
Per Stirpes distribution
Do not calculate the ratio for the living beneficiaries. However, for the deceased beneficiary (sibling of the other other beneficiaries), split the original share for his descendants
Per Capita distribution
Recalculate the share of what beneficiaries get by including the descendants of deceased into the count of people.
Will execution requirements
1) Testator must be at least 18 years of age
2) Testator must have mental capacity
3) Will must be signed by the testator and witnessed by at least two witnesses
Testamentary trust
1) Created through decedent’s last will
2) sets the terms of a trust where a named trustee can manage assets on behalf of beneficiaries for many years.
3) Useful for managing assets for the benefit of testator’s minor children
Codicil
1) An additional legal document to a will that revises the will
2) Must be executed with the same execution requirements as a will
3) Advantages of codicil - convenient, simple, inexpensive
4) Used for minor changes
Types of wills
1) holographic wills - done in handwriting, only a few states allow it
2) joint wills - last will and testament for two individuals, typically married couples. The first-to-die spouse’s property interests are commonly categorized as terminable interests and will not qualify for the marital deduction
3) simple wills - often done between spouses as “I Love you” reciprocal will
4) Mutual will - can also be reciprocal will; this will is made in agreement without another about property disposition
4) pour-over wills
5) tax-effective wills - uses estate tax exemption equivalent and /or the marital deduction and/or the charitable deduction
Will contests
Will contests are initiated by a disenchanted or disinherited beneficiary who seeks a greater portion of the decedent’s estate
Uniform Probate Code (UPS) on will contests
Awards the surviving spouse an increasing percentage of the estate based upon the number of years that the decedent and the surviving spouse were married to each other.
What can supersede the will?
Premarital or post-marital agreements that are validly executed can supersede state statutes.
Basis for will contests
1) testator of the will was not of sound mind (may not know who he/she is) at the time the will was executed
2) testator was unduly influenced by another individual which had direct impact on distribution of estate
3) testator was fraudulently deceived, and as a result disinherited a person who originally would have had a larger share of the estate
4) testator suffered from an insane delusion at the time the will was drafted. Example: Testator knows his heirs but disinherits them because he thinks they are trying to kill him.
How to reduce/deter will contests
Add a provision to the will that stipulates, “if any heirs contest the will, they are only entitled to $5”
Types of guardianship
1) Guardianship of the person provides for personal care
2) Guardianship or conservatorship of the estate manages property and financial affairs
3) Plenary guardianship manages both the incapacitated ward’s property and personal affairs
Guardian ad litem
Guardian appointed DURING the public court proceedings with oral and testimony to decide on competency. The goal is to represent the ward and to protect his rights.
