Will, Estates, and Trusts

Question 1

What is it called when someone dies without a will?

Answer 1

It is called dying “intestate”

Question 2

What happens when you die intestate?

Answer 2

You get a default will.

Question 3

Who inherits under an intestate will?

Answer 3

immediate family: in-laws and step-children don’t count

Question 4

Under intestate how is the property distributed?

Answer 4

-By “right of representation” or “per stirpes”

• Surviving spouse first (1/2 to all) then
• –living children (equal shares) then
• —–predeceased children who left living issue (equal shares)

Question 5

What is the order of intestacy for a decedent?

Answer 5

1- Spouse and kids
2- Parents
3- Brothers & sisters
4- Paternal & maternal grandparents
5- Aunts, and uncles

Question 6

Who can you dissenter in your will?

Answer 6

Everyone but your spouse. They can elect to take their intestate share if they want and its better than what they give in the will

Question 7

A conservatorship is when a handicapped person is covered in a will, and must make an accounting of how inheritance is spent each year. How can this yearly accounting be bypassed?

Answer 7

By creating a testamentary trust

Question 8

What are the four benefits of a will?

Answer 8

1- you can change rules so not just default

2- Don’t have to put up with hassle of conservatorship

3- you can decide who is guardian / personal representatives / conservator

4- The surety bond on the personal representative can be waived (usually the personal rep. has to get a surety bond so that they don’t take off with the assets, this makes it so they don’t have to)

Question 9

What are the 4 formalities of executing a will?

Answer 9

1- Testator must publish the document as his will to the witnesses. (witnesses don’t have to know what it says, just that it is the persons will)

2- Must have 2 to 3 witnesses (depending on state)

3- Testator must be at least 18 (have testamentary capacity) and sign in presence of witnesses

4- Witnesses must sign

Question 10

If there the formalities of the law are not followed for a will what happens?

Answer 10

Then the laws of intestacy apply and the will does not.

Question 11

What is a holographic will? How many witnesses are required?

Answer 11

It is a will written completely in the handwriting of the person making and signing the will as their own. No witnesses are needed, the handwriting serves as authenticity.

Question 12

After a will has passed all formalities it is allowed to add unwitnessed papers that describe how to distribute property. What can not be included on this paper?

Answer 12

1- Cash
2- Property subject to a document of title
3- Real property

Question 13

What is the second leading area of legal malpractice law suits?

Answer 13

estate planning

Question 14

What are the two way’s to change the original will? What is required to make it effective?

Answer 14

1- Codicil: it must follow similar formalities as a will

2- New will: the new will must revoke the older will, or if it doesn’t, in situations of conflict the new will wins.

Question 15

What four things can attack a wills validity?

Answer 15

1- lack of testamentary capacity

2- Undue influence taking away the testator (will writers) free will

3- Operation of law (divorce, remarriage, birth of a child after the will existed

4- Destruction of will by the testator with intent to terminate its effectiveness.

Question 16

What happens in probate? (8)

Answer 16

1- Wills tested for validity

2- Personal representative (PR) publishes notice of death to start the short S of L to run on debts chargeable against the estate

3- PR collects property of the estate

4- PR pays all non-discharged debts, expenses and taxes

5- PR distributes the net properties as per the terms of the will or the laws of intestacy

6- PR files an accounting with the court

7- Court issues a decree of distribution that clears title to the distributed properties

8- Miniature statute of limitations regarding debts and/or claims (Utah’s is 3 months)

Question 17

Why do some people argue that you should avoid probate?

Answer 17

1- Some states base attorney and PR fees on a percentage of estate for relatively little work

2- It’s public, so privacy is lost.

Question 18

How can you avoid probate?

Answer 18

1- Inter Vivos (living) trusts: Revocable trust with owners as trustee’s. At death the trust instrument determines where property will go on death

2- Joint Tenancy property:

3- Life insurance policies and pension plans paid according to terms of policy or plan

Question 19

Under a trust who does Legal title belong to? Equitable title?

Answer 19

Legal: trustee

Equitable: beneficiaries

Question 20

What is a spendthrift provision in a trust? Why is it helpful compared to probate?

Answer 20

It protects a beneficiary from himself and from creditors. The beneficiary cant sell it to anybody, and creditors can’t attach to it.

In probate the 18 year old would receive the money outright, and would likely squander it.

Question 21

What are potential problems created by having a trust?

Answer 21

1- A surviving spouse may be overwhelmed by the financial decisions

2- If there is an institutional trustee the spouse may feel confined by the trustee’s decisions.

Question 22

What is a living will?

Answer 22

It has to do with the giving or withholding of medical care when the signer loses the mental capacity to make medical judgments in his own behalf.