Wills and Trusts

Estate Planning  Estate Planning and Probate involves planning for the distribution of property after death and the mechanics of how property is actually distributed after death.  Can happen through a will created by an individual before death.  If no will, happens through state laws of intestate succession  Also involves trusts, which pass the right to benefits to property without passing complete title.

Some Terms  Terms  Testator: Someone who dies with a will  Decedent: Someone who dies without a will  Heir: Someone who inherits under intestate succession or would if not for a will  Issue: Children of a child of testator or decedent

Intestate Succession  The law of Intestate succession applies if there is no will. The wishes of the decedent are not taken into account and property passes to legal heirs according to state law.  Basic Rules:  If a spouse and no children, all to spouse.  If a spouse and children, spouse gets half and children split the other half.  If children, but no spouse, children split. If any child has died, their kids split their parent’s share  If no spouse and no children, all to parents.

Intestate Succession  If no spouse, children or living parents, then to the parents’ heirs.  If that doesn’t work, then to heirs of decedent's last spouse.  If that doesn’t work, goes to the state.

Wills  Definition: A will is a document by which an individual (testator) provides for the distribution of his or her property upon his or her death.  A will can also address who cares for minor children after death  Requirements for a valid Will  Requirements for a valid will are governed by state law where testator resides  Are three types of Wills  Formal Will—This is the standard written will created by a lawyer.  Holographic Will—A holographic Will is handwritten by the testator. It must be signed and dated, but witnesses are not required. Validity is based on the handwriting of the testator.  Nuncupative Will—Also known as a soldier’s will. Is an oral will made on a death bed. Very difficult to prove.

Formal Will  Writing Requirement  With a few exceptions, a will must be in writing,  must be signed by person making the will  must be signed by two people who witnessed the testator signing.  A standard will written by a lawyer will meet these requirements

Oral Will  Nuncupative will. An oral will made in the last sickness shall be valid in respect to personal property, if  reduced to writing and subscribed by two competent, disinterested witnesses  within thirty days after the speaking of the testamentary words,  when the testator called upon some person present at the time the testamentary words were spoken to bear testimony to said disposition as his or her will.

Codicils  Modification of a Will  A codicil is a modification to a will that does not totally revoke a prior will but adds to it or modifies a portion of it.  It must meet the statutory requirements of a will.

Revocation of a Will  Generally, a will can only be revoked by subsequent document that is signed and witnessed using the same formalities, such as a subsequent will.  Can also be revoked by an act of destruction that shows a clear intent to revoke.

Automatic Revocation  Under many state’s laws, certain events lead to automatic revocation of a will  Under Kansas law  if after making a will the testator marries and has a child, by birth or adoption, the will is thereby revoked.  If after making a will the testator is divorced, all provisions in such will in favor of the testator's spouse so divorced are thereby revoked.  Revocation of a second will does not revive a first will unless it is clearly expressed that it was the intention of the testator.

Types of dispositions in a Will  Specific Bequest—a Gift of specific personal property, such as a necklace or a car or bank account. If doesn’t exist, out of luck  Specific devise—a gift of specific real property (land)  General legacy—a gift of a specific amount of money. Taken from the assets of the general estate.  Demonstrative legacy—a gift of money from a particular source, such as a particular account. If account doesn’t have enough or doesn’t exist. No gift.  Residuary clause—Directs who gets money or property not otherwise specifically given in the will.  Disinheritance clause—Specifically says that an heir shall not receive anything. Isn’t necessary, but explains that heir was not inadvertently forgotten, which may prevent a challenge to the will.

After-Acquired Property  All property acquired by the testator after making his or her passes under the will as if possessed by him or her at the time when the testator made his or her will, unless a different intention appears from the will.

Pre-deceasing beneficiaries  Unless the will says otherwise, a bequest to a beneficiary who subsequently dies will go to the beneficiaries heirs.

Probate  A will has no effect unless it is filed with the court in a probate proceeding.  In Kansas, a probate action must be filed within 6 months of the death or the will won’t be honored.  Exception if someone hides the will if filed within 90 days of discovery  After the death of a testator the person having custody of the testator's will must deliver it to the court.  Person who willfully neglects or refuses to deliver a will after being duly ordered to do so shall be guilty of contempt of court.  Such person shall be further liable to any party aggrieved for the damages which may be sustained by such neglect or refusal.

Executor  Usually a testator will name an executor. If it doesn’t the court will appoint one called an Administrator.  Duty of executor is to gather the decedent’s estate and distribute the property, ensure that appropriate taxes are paid, ensure that debts are paid, and to distribute the property according to the will.  If die intestate, Administrator appointed by the court will do the same thing  Court supervises and will only approve distribution if satisfied that are no challenges to the will, that taxes and debts paid and that all the property has been dealt with.  If an estate of any size, can take a while because executor won’t distribute property until are sure that IRS has approved the estate tax return.