Intro to Wills and Trusts Flashcards
How lawyers help clients plan for wealth transfer upon death:
drafting wills and trusts
4 ways lawyers help clients plan for end-of-life planning:
- Living wills
- Advance directives
- Health care proxies
- Planning for loss of capacity with powers of attorney
An administrator is
in charge of gathering the estate assets, paying debts, and distributing the remaining property to the heirs.
Intestate laws defines family by
blood
marriage
formal adoption
Doing your own will, will often generally fail because
they do not have the requisite execution formalities
Clients have various goals categorized into
Property Management, Care, and Transmission of Property.
Property Management documents may include
trusts, powers of attorney, deeds, and partnership agreements.
Care documents cover
advance directives, guardianship proceedings, and tax-related forms.
Transmission of Property at Death involves
wills, trusts, deeds, contracts, and probate petitions.
Two types of financial power of attorney
- durable power of attorney
- springing powers of attorney
Transmission of Property at Death involves what 3 types of will altercations
- testamentary trusts
- codicils
- will revocations
Objections to probate proceedings are called
Caveats
If a document transmits property upon death of the property owner, what can be created
lifetime property management benefits
Probate property
assets transferred by a valid testamentary instrument like a will.
Decedent
a person who has died
Testator
A decedent who dies with a valid will
What does a will do?
It leaves instructions for what should happen to the testator’s property.
A will designates
The beneficiaries and an executor
Term for when
Real property given in a will is:
devised
Term for when
Personal property given in a will is:
bequeathed
Who can the executor listed in a will be?
an individual
several people
an institution with fiduciary powers ( ex. a trust company)
The executor acts as…
the legal existence of the decedent
3 things that a probate proceeding does
provide evidence of title transfer, satisfy creditors, and resolve conflicts among heirs and beneficiaries.
Intestate succession proceedings are called
administration
Nonprobate property
property that passes upon the property owners death by a legal instrument that is NOT a will or codicil
Nonprobate device
controls non-probate property, also called a will substitute
a nonprobate device can be a
contract, deed, multi-party bank account, or a trust instrument
when there is ancillary probate, what may need to be to be appointed
an ancillary executor and administrator
states typically have what 2 forms of probate proceedings
solem form
common form
Solem Form of probate proceedings
requires notification to all heirs
**
may states have a “small estate” statute for probate proceedings, what does it do?
expedite the probate process.
State statutes typically say that a car does not have to go through probate how? and under what 3 conditions
The person entitled can petition the DMV to
transfer the title w/o probate if
- probate is unecessary
- all creditors have been satisfied
- OR the estate is small enough that the creditors are not entitled to be paid.
Living wills
statements about treatment preferences
2 problems with living wills
- might be incomplete or static
- does not cover a sufficient range of health care situations
If patient has no living will or durable power of attorney, then the court
appoints a proxy to make health care decisions
Ethical will
a non testamentary writing “intended to pass along values and beliefs to succeeding generations”
- including family histories, religious traditions, and spiritual practices
Durable financial power of attorney
gives the agent power to make decisions regarding financial matters
Can a state require evidence that an incompetent person chose to withdrawal life support while competent
Yes, the constitution does not prohibit the requirement
- the requirement to promote policy of preserving life is constitutional
4 examples of disability planning documents
- HIPPA Release
- Living Will
- Durable (health care) power of attorney
- Durable (financial) power of attorney
“durable”
when someone becomes incapacitated, the agency relationship remains
If a document does not clarify what makes them become incapacitated, what needs to happen?
There needs to be a court order to be a court order to determine
A durable health care power of attorney, living will, and HIPPA release appoints an agent to
- Make health care decisions
- Take care of other sensitive personal issues
dying Intestate
Dying without a valid will
Who should the court appoint as an agent? (default)
- Spouse then child by majority
- Child that have financial/health care expertise
Two types of lifetime trusts
revocable trusts
irrevocable trusts
What occurs when someone dies owning probate property
probate succession
Probate succession happens when
someone dies with a valid will
The property a will governs is referred to as
estate
ancillary probate
property that the decendant owned outside of where they were domiciled
Something is not marital property unless
it is specified
Transfer on death is the same as
payment on death
Overall, an agent has to act…
in the best interest in the principle
3 ways that a power of attorney can become effective
- can be immediate
- can be “springing” that happens when the principle becomes incapacitated
- Can happen with an occurrence of a future event
If there are certain powers you want your agent to have, you have to
specify it in the document
under a durable health care power of attorney, living will, and HIPPA release what needs to happen in order for an agent to have power over additional sensitive personal issues
The specific powers have to be listed in the document
Clients are categorized based on
their needs
When someone dies intestate, the probate judge must appoint a
administrator
Intestate succession
the distribution of property of people who die without wills
Lifetime trusts are usually made to
make gifts or hold insurance
2 Examples of Advance Directives that deal with the care of self
- Living will
- Health care power of attorney
What is a will? (Physically)
A writing (rarely oral) signed by the testator and a witness.
4 main things a executor must handle
probate proceedings, collecting assets, notifying creditors, and distributing estate assets.
A nonprobate device may designate a
- primary beneficiary
- contingent beneficiary (also called an alternative beneficiary)
Intestate succession statutes in the decedent’s domicile state determine…
the identity of the decedents heirs and who should be named administrator.
nonprobate succession
The distribution of property that is not distributed through a will instrument
5 circumstances where probate size matters (specifically when small)
- If small enough probate is unecessary
- May have nothing to probate
- If very little, the surviving spouse may keep the probate without notifying the creditors
- If creditors are already satisfied
- Some property passes outside of probate are not reachable by creditors
small probate and tax obligations
even if small, tax obligations applies to any property that the decedent had control of at the time of death.
common form of probate proceedings
requires no notification to the heirs
not binding until longer period has elapsed from initial filing
How do State statutes typically address cars in relation to probate
Typically cars can be passed without going through probate
designated beneficiary vs. named on will
The designated beneficiary trumps who is listed on a will
The designated beneficiary trumps who is listed on a will UNLESS
the estate is listed as a beneficiary or doesn’t list a beneficiary
Will substitute
A way to have a transmission outside of probate
under the “due process” does a state have to accept a “substituted judgement” in the absence of substantial proof of the end of life wishes of the patient?
No they do not have to accept, they can require “substantial proof” and nothing else
Presumption of a power of attorneys “durableness”
That it is durable unless the instrument says that it is terminated by the incapacity of the principle
A Durable Financial Power of Attorney appoints an agent to
make financial decisions and manage assets
What powers/authority are granted to a durable financial power of attorney?
- General Powers
- Specific powers related to estate planning
Two ways that an durable power of attorney becomes effective
- Default- immediately
- Springing- when incapacitated
5 examples of additional sensitive personal issues that a durable health care power of attorney, living will, and HIPPA release can appoint to a agent
. Assisted living care
- In home, facility?
2. Mental health treatment
3. Organ donation
- any organ for any purpose?
4. conditions for pulling the plug
5. Access to health records
Partial intestacy
created a valid will that did not dispose of all the decedents probate property
with low-income people dying intestate, where does the real property typically go to?
Why is this a bad thing
- typically passes to tenets in common
- it makes it impossible to sell, get loans on the property, get federal disaster relief, etc.
What do state statutes presume when aiming for a “fair” allocation of property
that the decedent intends to benefit the closest to them on the family tree
5 reasons someone would be in intestacy
- no will
- will, but invalid
- valid will, but doesn’t cover all property
- valid will, but revoked
- valid will, but lost/not admitted into probate
How to completely opt out of intestacy
Create a valid will that disposes of all probate property
Prof. does not test rules like taking financial financial care of child, for genetic testing
need to determine how that effects my studying
Default disposition rules spouse v. children
favors spouse over children
When a health document saus that the agent has the power to withdrawl life
do they?
It does not mean that they can.
They need evidence that it is what the principle wanted.
Irrevocable trusts and creditor protection
Irrevocable trusts do not give creditor protection
A will must be:
what 3 things
1) In writing
2) signed by the testator or by some other in the testators conscious presence and by the testators directions
AND
3) Either
a) Signed by atleast 2 individuals, each whom signed within a reasonable time after the individual witnessed either the signing of the will OR
b) acknowledged by the testator before a notery public or other individividual authorized by law to take acknowledgements
may be missing something on a)
for a will
writing
any form of writing, whether by hand or machine
4 ways a testator can sign their will
1) legal name
2) nickname
3) mother, father
4) cross or notation indicating a signature as long as the mark is made by the testator
Codicil
A testamentary instumnet that is a written amendment or modification to an existing will.
A codicil must be created using
the appropriate will formalities
