Chapter 46 Wills and Trusts

2  What are the basic requirements for executing a will?  How may a will be revoked?  What is the difference between a per stirpes and per capita distribution?  What are the four essential elements of a trust?  What is the difference between an express trust and an implied trust?  What are the basic requirements for executing a will?  How may a will be revoked?  What is the difference between a per stirpes and per capita distribution?  What are the four essential elements of a trust?  What is the difference between an express trust and an implied trust? Learning Objectives

3 Wills  Will provides for a Testamentary disposition of property by the Testator (one making the will). A will is the final declaration of how a person desires to have his or her property disposed of after death.  Die testate (One who dies after having made a valid will) or intestate (without a will).  Executor is a personal representative named in the will.  Administrator appointed by court.  Will provides for a Testamentary disposition of property by the Testator (one making the will). A will is the final declaration of how a person desires to have his or her property disposed of after death.  Die testate (One who dies after having made a valid will) or intestate (without a will).  Executor is a personal representative named in the will.  Administrator appointed by court.

4 Types of Gifts  Devise: gift of real estate.  Bequest or Legacy: gift of personal property.  Types of Gifts: specific, general, or residuary.  Abatement.  Lapsed Legacies.  Devise: gift of real estate.  Bequest or Legacy: gift of personal property.  Types of Gifts: specific, general, or residuary.  Abatement.  Lapsed Legacies.

5 Probate Procedures  Informal Probate Proceedings. Family Settlement Agreements. Small Estates.  Formal Probate Proceedings. Larger Estates. Guardianship appointment to a minor or incompetent person and trust has been created to protect that minor or incompetent person.  Informal Probate Proceedings. Family Settlement Agreements. Small Estates.  Formal Probate Proceedings. Larger Estates. Guardianship appointment to a minor or incompetent person and trust has been created to protect that minor or incompetent person.

6 Requirements for a Valid Will  Testamentary Capacity and Intent.  Writing Requirements.  Signature Requirements.  Witness Requirements.  Publication Requirements.  Testamentary Capacity and Intent.  Writing Requirements.  Signature Requirements.  Witness Requirements.  Publication Requirements.

7 Revocation of Wills  Revocation by a Physical Act of the Market.  Revocation by a Subsequent Writing.  Revocation By Operation of Law.  Revocation by a Physical Act of the Market.  Revocation by a Subsequent Writing.  Revocation By Operation of Law.

8 Intestacy Laws  Statues of descent and distribution which attempt to carry out the likely intent and wished of the decedent. Surviving Spouse and Children, Not in-laws. Stepchildren, Adopted children, Illegitimate children. Grandchildren.  Statues of descent and distribution which attempt to carry out the likely intent and wished of the decedent. Surviving Spouse and Children, Not in-laws. Stepchildren, Adopted children, Illegitimate children. Grandchildren.

9 Surviving Spouse and Children  Surviving spouse usually receives only a share of the estate. 1/3 if two or more children. 1/2 if one surviving child. Entire estate if no children or grandchildren.  If no surviving spouse or child the order of inheritance is: Lineal descendants. Collateral heirs (if no lineal descendants).  Not spouses of the children, in-laws.  Surviving spouse usually receives only a share of the estate. 1/3 if two or more children. 1/2 if one surviving child. Entire estate if no children or grandchildren.  If no surviving spouse or child the order of inheritance is: Lineal descendants. Collateral heirs (if no lineal descendants).  Not spouses of the children, in-laws.

10 Stepchildren, Adopted Children, Illegitimate Children  Stepchildren -- not considered children of deceased.  Adopted children -- considered children of deceased.  Illegitimate -- must prove paternity.  Stepchildren -- not considered children of deceased.  Adopted children -- considered children of deceased.  Illegitimate -- must prove paternity.

11 Per Stirpes Distribution (Intestate). Method of dividing an intestate share by which a class or group of distributees take the share that their deceased parent would have been entitled to inherit had that parent lived.

12 Per Capita Distribution (Intestate). A class or group of distributees equally share in the inheritance.

13 Trusts  Trust -- A right of property (real or personal) held by one party for the benefit of another.  Trustee: holds property on behalf of the Beneficiary. Act with honesty, good faith, and prudence in administering the trust and must exercise a high degree of loyalty toward the trust beneficiaries.  Trust -- A right of property (real or personal) held by one party for the benefit of another.  Trustee: holds property on behalf of the Beneficiary. Act with honesty, good faith, and prudence in administering the trust and must exercise a high degree of loyalty toward the trust beneficiaries.

14 Essential Elements of a Trust  Essential Elements: Designated beneficiary. Designated trustee. Fund sufficiently identified to enable title to pass to the trustee. Actual delivery to the trustee with the intention of passing title.  Essential Elements: Designated beneficiary. Designated trustee. Fund sufficiently identified to enable title to pass to the trustee. Actual delivery to the trustee with the intention of passing title.

15 Express Trusts  Living Trusts.  Testamentary Trusts.  Charitable Trusts.  Spendthrift Trusts.  Totten Trusts.  Living Trusts.  Testamentary Trusts.  Charitable Trusts.  Spendthrift Trusts.  Totten Trusts.

16 Implied Trusts  Constructive Trusts. Arises by operation of the law in th interest of equity and fairness.  Resulting Trusts. Arises from the conduct of the parties.  Constructive Trusts. Arises by operation of the law in th interest of equity and fairness.  Resulting Trusts. Arises from the conduct of the parties.

17 Special Types of Trusts  Spendthrift Trust: Beneficiary is only permitted to withdraw a certain portion of the total amount of the trust at any one time.  Totten Trust: one person deposits funds in her name for benefit of another.  Spendthrift Trust: Beneficiary is only permitted to withdraw a certain portion of the total amount of the trust at any one time.  Totten Trust: one person deposits funds in her name for benefit of another.