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Wills, Trusts and Estates

 

Glossary of Terms

Attestation is the act of witnessing the execution of a written Will and then signing the Will as a witness.

Bequest is a gift of personal property to an individual through a Will. There are two types of bequests. A specific object such as a work of art, specified pieces of household goods, a coin collection, etc. is known as a specific bequest. A general or residuary bequest is a gift of the remainder of an individual's estate after payment of all debts and specific bequests.

Codicil is a written attachment to a Will that contains any modifications or supplements to that Will.

A codicil may explain, modify, add to, subtract from, qualify, alter, restrain or revoke previous provisions in the Will.

Devise is a term that describes the passing of real property through a Will.

Devisee is a person who receives real property through a Will.

Escheat is the act of property reverting to the state when an individual leaves no heir at law or Will.

Executor is a male individual appointed by the maker of a Will to dispose of the property according to the maker's intentions and wishes.

Executrix is a female individual appointed by the maker of a Will to dispose of the property according to the maker's intentions and wishes.

Holographic Will is a Will that is written entirely in the testator's or testatrix's own handwriting. A majority of states allow for property to pass according to the terms of a holographic Will as long as at least two witnesses who have no interest in receiving any property from the Will can identify the testator's or testatrix's signature.

Inter Vivos Trust is a trust that is set up during an individual's lifetime.

Intestate is when an individual dies without a Will and his or her property passes by statute to his or her heirs at law. The person is said to have died "intestate."

Intestate succession is the distribution of property after the death of a person who has left no valid Will or other testamentary device. The property is distributed to the dead person's heirs according to state law.

Nuncupative Will is a Will that is not written but is orally communicated by an individual who sets out his or her intents and wishes as to the distribution of his or her property. Some states will accept nuncupative Wills, while others will not.

Probate is the process of transferring property from the estate of a person who has died to other people, according to the terms of the dead person's Will if there is a valid one, or according to the laws of intestate succession if the person died intestate.

Revocation is when the testator or testatrix annuls or renders inoperative an existing Will by making a new Will that is inconsistent with the terms of the first Will or by destroying the Will.

Testate is when an individual dies and his or her property passes to individuals that have been designated to receive that property in his or her Will. The person is said to have died "testate."

Testate Succession is the distribution of property after the death of a person according to the terms of that person's Will.

Testator is a male individual who has made a Will.

Testatrix is a female individual who has made a Will.

Trust is when property, both real and personal, is held by one party for the benefit of another.

Trustee is a person who is appointed or required by law to administer or exercise a Trust for the benefit or to the use of the beneficiaries of the Trust.

Trustor is an individual who creates a Trust.

What is a Will?

A Will is a written instrument in which the testator or testatrix sets forth how his or her real and personal property is to be divided after his or her death.

After an individual passes away and leaves a Will, what happens next?

In most jurisdictions the Will must go through probate. Probate is the process where a court of competent jurisdiction reviews the Will to determine its validity. If the probate court determines that the Will in fact is the last wishes and intentions of the testator or testatrix, it will distribute the property, both real and personal, according to the testator or testatrix's wishes.

If a family member dies and leaves an individual out of the Will, can that person dispute the Will?

Yes. But in order to contest the Will, an individual must demonstrate to the probate court that the Will is not valid because the testator or testatrix was coerced or pressured to execute a Will that did not reflect his or her true intentions or that at the time the Will was made the testator or testatrix did not have all his or her mental faculties and could not express his or her wishes. Possibly it can be shown that the Will was revoked by the testator or testatrix by proving that a more recent Will was executed that may have different terms and conditions. If the court accepts the newer version of the Will, the older Will will be considered revoked.

In order to successfully contest a Will, the claim must have some basis in fact and law. Merely being unhappy because one has been left out is an insufficient basis for a Will contest.

How are Wills made?

Typically, an attorney will prepare a written document for the testator or the testatrix. The document contains language setting out the wishes of the individual as to how his or her property is to be divided after his or her death. If specific items of personal property such as works of art, automobiles, coin or stamp collections, firearms, jewelry, etc. are specified in the Will, this is known as a specific bequest. If there is no specific bequest and the personal property of the testator or testatrix is to pass in its entirety to a single person or is to be divided into equal shares and distributed amongst various people, this is known as a general or residuary bequest. A gift of this nature is made after payment of all debts, taxes or other expenses associated with the estate.

After the document is prepared, it is executed or signed in front of at least two witnesses, and an individual is named as the executor of the estate or, if that individual is female, executrix of the estate. It is the executor's or executrix's responsibility to protect the property of the estate and to handle the administrative responsibilities of the estate while it is in probate and the property is being divided.

Do you have to have an attorney for a Will?

An attorney is not required to prepare a Will. But it is highly advisable that an attorney who practices in the area of estate planning and probate be retained so that an individual can have the peace of mind of knowing that his or her estate will pass as intended and that the property will go to those people for whom it was intended. Worse yet, an incorrectly drafted Will can become a source of family friction in a Will contest if a statutory requirement of a particular state was not complied with when the Will was created.

Do all Wills have to be witnessed in order to be valid?

Different states have different requirements in this regard. Some states require that all written Wills must be witnessed by at least two witnesses and that those witnesses be listed in the attestation clause of the Will. Other states allow for individuals to write their Wills in their own handwriting without witnesses. This type of Will is called a holographic Will. In states that allow holographic Wills, the probate court requires that two individuals who have no interest in the Will come forward to testify that the Will in fact is the handwritten Will of the testator or testatrix.

Must all Wills be written?

Some states allow for a testator or testatrix to make oral Wills. These are referred to as nuncupative Wills. Typically these Wills are not favored by the law because of the likelihood that the testator's or testatrix's intentions will not be properly communicated. Many states, for this reason, either do not recognize nuncupative Wills, or consider them to be invalid.

What happens when a husband and wife who each have Wills die at the same time in some type of accident?

When husbands and wives make their Wills, it is a good idea to include language that presumes one party predeceased the other so that the property can pass through the Wills according to a planned order of death. If this step is not taken, often there is confusion as to who predeceased whom, which can work a hardship on anyone who might be in line to inherit property from one or both of the deceased couple.

What happens if there is no Will?

If a person dies without leaving a Will, that person's property will pass to his or her heirs at law through intestate succession, which is the process of transferring property to a person's heirs at law in the proportions dictated by that particular state's statutes. These intestate laws often provide that an individual's estate passes to his or her surviving spouse. If there are children who are living, the estate might pass half to the surviving spouse and half being divided equally among the children. If there is no surviving spouse or children, the estate might pass to a surviving parent or sibling. Each state has its own set of intestate succession laws. Those laws differ from state to state and it is imperative to consult with an attorney to determine what effect they may have on an individual's property when that person dies without a Will.

What if a person dies, leaves no Will and has no surviving heirs at law?

If there is no testamentary document or Will that reflects the person's wishes and intention as to his or her property, or if he or she dies without a Will and there are no heirs at law, then all of that individual's property reverts to the state. This process is known as eschea

What are some of the concerns with probating an individual's Will?

One of the principal concerns about taking a Will through probate is that if there are not proper provisions made to address tax consequences, such as payment of the inheritance tax, a sizable portion of the estate can be lost to federal and state taxes. Another concern is the amount of time it takes to go through probate. Often, notice must be given to interested parties with time for them to respond. Until that time passes, the property cannot be transferred.

How can probate be avoided?

Probate can be avoided through the use of Trusts. Trusts are often complicated legal documents that require the assistance of an attorney well-versed and trained in the area of probate and Trust administration. A Trust can help you avoid not only the tax consequences but often the lengthy delay that is associated with probating any Will. Often all of an individual's property can be placed into a Trust with periodic payments from the Trust being made to that individual during his or her life. A Trust can contain language providing that upon that individual's death, the income from the Trust is to be paid to another individual or individuals.

Trusts of this nature are often referred to as Inter Vivos Trusts. Sometimes an individual may want to set up Trust provisions that address specific needs. A good example would be an education Trust, which is a Trust that pays costs associated with the education of a designated beneficiary. Also, in situations where there are young children, a Trust is often advisable to help meet their specific needs if their parents die. If there is no Trust and there is a probate estate, the probate court will often appoint a guardian to oversee the children's needs. This can often be time-consuming and costly. A Trust can avoid these problems.

Does an individual have to die in order for a Trust to pay beneficiaries?

No. As stated above, an Inter Vivos Trust can be set up so that it not only meets the needs of the person who created it, the Trustor, but it can also be designed in such a way that it makes periodic payments to beneficiaries while the Trustor is still living.

What is the difference between a Trust and not having a Trust?

The major difference is that the person who creates the Trust places all of his or her property into the corpus or the body of the Trust and the Trust is administered by a Trustee. A Trustee is a person who is either appointed or is required by law to oversee and to administer a Trust. He or she is given the power to administer the Trust and to exercise the Trust for the benefit of the various beneficiaries.

Can you have a Will and a Trust?

Yes. Often, to avoid tax consequences as well as to carry out the intent of the testator or testatrix, provisions are placed in the Will which create a Trust upon the death of the testator. An individual known as the testamentary trustee, acting under the provisions of the Will, carries out the provisions of the Trust.

Which is best, a Will or a Trust?

There is no single answer that can be applied to all persons. When contemplating making a Will or a Trust, it is always wise to consult with an attorney who has experience in the areas of Wills, Trusts, estate planning and tax. He or she can determine what would be in your and your family's best interest based on the nature and extent of your personal property, your investments, your real estate, your intentions and desires as to the property and the tax consequences. An investment in an attorney's time and counsel now may well save your family and loved ones stress, costs, and time in the future.