1. The Estate Plan and the Purpose and Need for a Will
Chapter 2

2. Estate Plan
An arrangement of a person’s assets using the laws of various disciplines (wills, trusts, taxes, insurance, and property) to gain maximum financial benefit of all the laws for the disposition of the person’s assets during life (inter vivos) and after death

3. Will
A legally enforceable written declaration of a person’s intended distribution of property after death

4. Requirements to Make a Will
Capacity
Legal capacity
The age at which a person acquires capacity to make a valid will, usually 18
Testamentary capacity
The sanity (sound mind) requirement for a person to make a valid will

5. Terminology of Makers of Wills
Testator
A male who makes and/or dies with a valid will
Testatrix
A female who makes and/or dies with a valid will

6. Requirements of a Will Written Document Witnesses
Date (in most states)
Signature of the Testator/Testatrix
Sound Mind of the Testator/Testatrix
Legal Capacity of the Testator/Testatrix
Selection of Personal Representative

7. Formal Probate
A court-supervised administration of a decedent’s estate
Decedent: A person who has died

8. Terminology of Wills Beneficiary Devisee Legatee
A person entitled to receive property under a will
Devisee
A person who receives a gift of real property under a will
Legatee
A person who receives a gift of personal property under a will

9. Terminology of Intestacy
Intestate
A person who dies without a valid will
Heir
A person who receives a gift of real property from an intestate
Next of Kin
The closest blood relatives of a decedent

10. Terminology of Wills Ambulatory Codicil Letter of Instructions
Subject to change
Codicil
A written amendment to a will
Letter of Instructions
A document that specifies a testator’s intentions for organ donation and funeral and burial plans but does not amend or change a will

11. Residuary Estate
The remaining assets of a decedent’s estate after all debts have been paid and all other gifts in the will have been distributed

12. Property Distributions
Tenancy in Common
Joint Tenancy

13. Letter of Instructions
Structure of an Estate
Beneficiary
Testator
Estate
Letter of Instructions
Personal
Representative

14. Trusts Trust Testamentary Trust Inter Vivos Trust
A right of property, real or personal, held by one person for the benefit of another
Testamentary Trust
A trust created in a will; becomes operational upon the death of its creator
Inter Vivos Trust
A trust that is effective during the life of its creator; becomes operational immediately after created

15. Structure of a Trust Settlor Trustee Inter Vivos Gifts Trust Estate
Beneficiary

16. Title Legal Title Equitable Title
The form of ownership of trust property held by the trustee, giving the trustee the right to control and manage the property for another’s benefit
Equitable Title
Provides the right to the benefits of a trust to the beneficiary

17. Trustee
The person or institution named by the maker of a will or creator/settlor of a trust to administer the property for the benefit of another, according to the creator’s provisions
Compare to an executor, who carries out the terms of a will, and a personal representative, who carries out the terms of a will or administers an estate when there is no will

18. Personal Representative
A person who administers and distributes an intestate or testate decedent’s estate
Compare to an executor, who carries out the terms of a will

19. Will Substitutes Joint Tenancy Life Insurance Inter vivos Trust
Inter vivos Gift
Community Property Agreement
Transfer-on-Death Deed/Beneficiary Deed