CHAPTER 19 Wills, Trusts, and Estates

1. CHAPTER 19Wills, Trusts, and Estates 19-1 Property Distribution Upon Death 19-2 Trusts

2. 19-1 Property Distribution Upon Death GOALS • Differentiate between dying testate (with a will) and dying intestate(without) • Describe how a decedent’s (deadperson’s) property is distributed to the heirs of the estate or will or trust Chapter 19

3. FOCUS • Name three reasons a person should have a will. • Pay taxes and administrative expenses dictated by the courts • Prevent family fighting • Carry out the decedents wishes Chapter 19

4. LEGAL ALTERNATIVES IN PROPERTY DISTRIBUTION • Death without a will – dying intestate court appoints an adminstrator • Death with a will-dying testate 4 things to know: • Creation and execution of a valid will • Testator must have the clear intention to make a will • Testamentary capacity • Usually in writing and signed Chapter 19

5. 2- Amendment of a Valid Will • A will can be changed or cancelled any time during the testators life • A will can be amended and changed through a codicil which is a formal written and witnessed amendment. Chapter 19

6. 3- Special Types of Wills or exceptions • Holographic Will - a will written entirely in the handwriting of the decedent, example of soldier in the field • Nuncupative Will- is an oral will recognized in some states, usually must be witnessed Chapter 19

7. 4- Revoking a Will • Can be done only by the testator and he or she must have intent and capacity at the time of change or revoking. • Making a new will and stating I hereby revoke all prior wills • Divorce does not revoke or change a will only a divorce settlement can Chapter 19

8. DISTRIBUTION OF THE DECEDENT’S ESTATE • Procedure prior to distribution • Get a death certificate from funeral parlor • Assemble the estate and its property • Public notice in a paper so creditors can come forth • Distribute the will to the heirs Chapter 19

9. Distribution of Property and $$$ • Without a Will- distribution is dictated by the courts and peoples claims against the estate • With a Will – terms must be closely followed by the executor of the will • It will be supervised by the court • Usually assisted by an attorney • Look at page 345 rh column Chapter 19

10. What are the terms for the two ways in which the testator can distribute the estate among the lineal descendents? Per capita-split equally by children Or grandchildren Per stirpes- if a child is dead then the share goes to his children Chapter 19

11. What does it mean to die intestate? It means to die without a will or a trust Chapter 19

12. 19-2 Trusts GOALS • Recognize the value of the trust instrument • Identify the various types of trusts Chapter 19

13. FOCUS Scenario • Mario's mother has taken out a million-dollar life insurance policy on herself. However, she does not want the proceeds of the policies paid directly to Mario. She wants the proceeds utilized to help and guide him through his life as she would have done. Question • What legal device can Mario’s mother set up to meet these objectives? Chapter 19

14. PURPOSE AND CREATION OF TRUSTS • Trust – a type of will, in which a third party controls money for a beneficiary • Trustee-is the 3rd party in control to administer the trust to the beneficiary • Settlor- the creator of a trust • Beneficiary – is the person receiving the benefit. Chapter 19

15. What is the legal term for the creator of a trust? The Settlor Chapter 19

16. TYPES OF TRUSTS • Inter vivos v. testamentary trust – • Intervivos- settlor is alive when trust is made • Testamentary is a trust made as directed in a will after the settlor’s death • Charitable v. private trust • Express v. implied trust • Express- terms in trust are clearly stated • Implied trust- beneficiary cannot receive benefit, the inheritance goes back to trustee Chapter 19

17. What is the difference between an inter vivos trust and a testamentary trust? Inter vivos- trust made during lifetime of settlor Testamentary trust- made after the death of the settlor. Chapter 19