Business Law Cheeseman Chapter 52 - Wills, Trusts, and Estates

What is intestate?

Without a will

What is a will?

A declaration of how a person wants his or her property to be distributed on death

What is a testator?

A person who makes a will

What is a testator also called?

A testatrix

What is a Statute of Wills?

A state statute that establishes the requirements for making a valid will

What are the requirements of a Statute of Wills?

1) The testator must have testamentary capacity 2) The will must be in writing unless a dying declaration 3) The will must be signed

What is an attestation?

The action of a will being witnessed by 2 or 3 objective and competent people

What is a formal will?

A will that meets the requirements of the Statute of Wills

What is a codicil?

A separate document that must be executed to amend a will. It must be executed with the same formalities as a will

Does a subsequent will revoke a prior will?

Yes

What is a joint will?

A will that is executed by 2 or more testators

What are mutual wills?

A situation in which 2 or more testators execute separate wills that leave their property to each other on the condition that the survivor leave the remaining property on his or her death as agreed by the testators

What are mutual wills also called?

Reciprocal wills

What is a holographic will?

A will that is entirely handwritten and signed by the testator

What is a nuncupative will?

An oral will that is made before a witness during the testator's last illness

What is a nuncupative will also called?

A dying declaration or deathbed will

What is the Uniform Simultaneous Death Act?

An act that provides that if people who would inherit property from each other die simultaneously, each person's property is distributed as though he or she had survived

What is probate?

The process of a deceased's property being collected, debts and taxes being paid, and the remainder of the estate being distributed

What is probate also called?

Settlement of the estate

What is a personal representative?

A person appointed to administer an estate during its settlement phase

What is a personal representative also called?

An executor or executrix

What is an administrator?

The person appointed by the court if a personal representative is not chosen

What is an administrator also called?

An administratrix

What is a devise?

A gift of real estate by will

What is a bequest?

A gift of personal property by will

What is a bequest also called?

A legacy

What is a specific gift?

A gift of a specifically named piece of property

What is a general gift?

A gift that does not identify the specific property from which the gift is to be made

What is a residuary gift?

A gift of an estate left after the debts, taxes, and specific and general gifts have been given

What is per stripes distribution?

A distribution of an estate in which grandchildren and great-grandchildren of the deceased inherit by representation of their parent

What is a per capita distribution?

A distribution of an estate in which each grandchild and great-grandchild of the deceased inherits equally with the children of the deceased

What is ademption?

A principle that says if a testator leaves a specific devise of property to a beneficiary but the property is no longer in the estate when the testator dies, the beneficiary receives nothing

What is abatement?

A doctrine that says if the property a testator leaves is not sufficient to satisfy all the beneficiaries named in a will and there are both general and residuary bequests, the residuary bequest is abated first (i.e., paid last)

What is the intestacy statute?

A state statute that specifies how a deceased's property will be distributed if he or she dies without a will or if the last will is declared void and there is no prior valid will

What is an heir?

The receiver of property under intestacy statutes

Who gets property if the deceased dies without a valid will?

Heirs set forth in the applicable state intestacy statute. If there are no heirs, the deceased's property escheats to the state.

What is a trust?

A legal arrangement established when one person transfers title to property to another person to be held and used for the benefit of a third person

What is a settlor?

The person who delivers and transfers legal title to property to another person, bank, or other entity

What is a settlor also called?

A trustor

What is a trustee?

A person or an entity that holds legal title to a trust corpus and manages the trust for the benefit of the beneficiary or beneficiaries

What is trust corpus?

Property and assets held in trust

What is trust corpus also called?

Trust res

What is an income beneficiary of a trust?

A person or an entity to be paid income from a trust

What is a remainder beneficiary of a trust?

A person or an entity to receive the trust corpus on the termination of a trust

What is an inter vivos trust?

A trust that is created while the settlor is alive

What is a testamentary trust?

A trust created by will; the trust comes into existence when the settlor dies

What is a constructive trust?

An equitable trust that is implied by law to avoid fraud, unjust enrichment, and injustice

What is a resulting trust?

A trust that is implied from the conduct of the parties

What is a charitable trust?

A trust created for the benefit of a segment of society or society in general

What is a spendthrift trust?

A trust designed to prevent a beneficiary's personal creditors from reaching his or her trust interest. All control over the trust is removed from the beneficiary. Personal creditors still can go after trust income that is paid to the beneficiary, however

What is a Totten trust?

A trust created when a person deposits money in a bank account in his or her own name and holds it as a trustee for the benefit of another person. A Totten trust is a tentative trust because (1) the trustee can add or withdraw funds from the account and (2) the trust can be revoked at any time prior to the trustee's death or prior to completing delivery of the funds to the beneficiary.

What is a living trust?

A method for holding property during a person's lifetime and distributing the property upon that person's death

What is a living trust also called?

A grantor's trust or revocable trust

What is a grantor?

A person who creates a living trust

What is a grantor also called?

A trustor

What is a trustor?

A person who creates a trust

What is a trustor also called?

A settler or transferor

What is the primary purpose of using a living trust?

To avoid probate associated with using a will

Does a living trust reduce estate taxes more than a will?

No

Does a living trust reduce the grantor's income taxes?

No

Does a living trust avoid creditors?

No

Is a living trust subject to property division on divorce?

Yes

Is a living trust less expensive to create than a will?

No

Does a living trust avoid controversies on the grantor's death?

No

What is a trust corpus?

The property the grantor transfers title of to the trust in order to fund a living trust

Is a living trust revocable during a grantor's lifetime?

Yes

What is a trustee of a living trust?

A person named in a living will to administer the trust assets. This is usually the grantor

What is a successor trustee?

A named replacement for the grantor-trustee if the grantor-trustee should lose capacity or become too ill to manage the trust

What is an income beneficiary of a living trust?

A person who receives the income from a living trust during his or her life. This is usually the grantor

What is a remainder beneficiary of a living trust?

A person who receives the assets of a living trust on the death of the grantor

What is undue influence?

A situation in which one person takes advantage of another person's mental, emotional, or physical weakness and unduly persuades that person to make a will; the persuasion by the wrongdoer must overcome the free will of the testator

What is a living will?

A document that states which lifesaving measures the signor does and does not want; it can specify that he or she wants such treatments withdrawn if doctors determine that there is no hope of a meaningful recovery

What is Cruzan v. Director, Missouri Department of Health?

A case in which the U.S. Supreme Court ruled that the right to refuse medical treatment is a personal liberty protected by the Due Process Clause of the U.S. Constitution

What is a health care directive?

A document in which the maker names someone to be his or her health care agent to make all health care decisions in accordance with his or her wishes, as outlined in the living will

What is a health care directive also called?

A health care proxy

How does abatement work?

1) If a will provides for both general and residuary gifts, the residuary gifts are abated first. 2) If a will provides only for general gifts, the reductions are proportionate.

What does escheats mean?

Goes

What is the attestation clause?

The signatures of witnesses to a will

What does issue mean?

Descendants

Can an adopted child inherit money from biological parents through intestate succession?

No

What are the intestate succession rules?

1) Surviving spouse typically gets all property 2) Children 3) Parent(s) get equal shares 4) Brothers and sisters get equal shares 5) 1/2 goes to maternal grandparents, 1/2 goes to paternal grandparents 6) State

What is more equitable, per stripes or per capita?

Per stripes

Which does California follow, per stripes or per capita?

Per stripes

Which rewards those with more kids, per stripes or per capita?

Per capita

Must wills be written?

Yes

What is required to have capacity for a will?

You must be at least 18 years old and have mental capacity

Is a video a written or oral will?

Written

Can you sign a will with an X?

Yes

Can you sign a will using a nickname?

Yes

What witnesses are needed?

2 disinterested

What will happen if one witness is an interested beneficiary?

The will is still valid and the beneficiary will receive an amount up to which he/she would have received through intestate succession, and nothing more

What witnesses are required for holographic wills?

None

When should the witnesses be present?

Either when the testator executes or acknowledges the will

What happens if a will has conflicting clauses?

The asset in question is excluded from the will and passed down through intestate succession.

Can you revoke a will with a codicil?

Yes

Can you revoke a will with accidental burning?

No

If you burn only one small corner with the intent to destroy, then blow it out, is the will revoked?

Yes

Can you revoke a will by tearing it?

If the words are torn