CE 102-104 Wills, Trusts, and Probate Administration I, II, and III (Exam)

CE 102 Wills, Trusts, and Probate Administration I & CE 103 Wills, Trusts, and Probate Administration II & CE 104 Wills, Trusts, and Probate Administration III

Wills

Your will is an essential part of your estate plan. No matter what else you do to plan your estate, your will serves purposes that no other estate planning document can fill. Through your will, you can

• _______________
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Deciding Whether a Will Serves Your Needs

But what I’m asking is whether your estate plan can be managed with just a will. If _______________, _______________ , and _______________ , a simple will may be all you need.

Assets not covered by a will

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Exploring the Types of Wills

The statutory will

Statutory wills are often made available as _______________ forms.

The handwritten (holographic) will

A holographic will is written entirely in your handwriting and is signed by you, but _______________ .

A cousin of the holographic will is the oral will, sometimes called a _______________ , where there is no written document at all.

A will of your own

As a general rule, when you create a will, it’s sensible to

• _______________ . Otherwise, your will may be rejected by a probate court.
• _______________. Don’t complicate your will unless you’re truly convinced that the added complexity is necessary to your estate plan.

Other wills

But you can do a lot more with your will:

• _______________ : You can create a trust with your will or direct your estate to put assets into a trust.
• _______________ : You can create a joint estate plan with your spouse and may also be able to make your joint estate plan legally binding even after your death.
• _______________ : You can add an affidavit to your will to simplify the process of submitting it to probate

Elements of a Will

To be effective, your will must _______________ , _______________, _______________ , and _______________ . Beyond the basic elements, your will _______________ to administer your estate and can also appoint _______________ for your minor children.

Who you are

What are your assets

Part of the estate planning process is figuring out what you own. Your possessions will typically include

• _______________
• _______________
• _______________
• _______________

Who are your beneficiaries

You need to also consider the circumstances of your heirs. Young children may benefit from having their inheritances left to them in _______________ , providing for their _______________ and _______________ over the years. An heir who doesn’t manage money well may benefit from _______________ . An heir who receives public assistance due to a disability may benefit from _______________ .

What are your bequests

Avoid failed bequests

Your bequests may fail in one of two ways:

• _______________
• _______________

Creating a moral obligation or binding inheritance

Reference to a tangible personal property memorandum

Some states allow you to refer your will to an external document that lists items of personal property and who inherits them. This memorandum allows you to leave your _______________ and _______________ to specific people, change the list to _______________ , _______________ you no longer possess or _______________ , without changing your will.

What happens with the residue (if any) of the estate

A _______________ describes how those leftovers are to be distributed to your heirs. For example, “The residue of my estate is to be divided equally between my children.”

Payment of debts by the estate

Your estate is obligated by law to pay your _______________ . Your representative provides notice to your _______________ , consistent with the laws of your estate, those creditors submit _______________ for payment, and your estate pays those debts found to be valid.

Describing your funeral and burial wishes

Designating a personal representative

Your representative also called an _______________ manages your estate in the probate court. This role is important and sometimes difficult, so you need to choose somebody who has the _______________ and _______________ to administer your estate. You want somebody _______________ , _______________ , and _______________ .

Designating a guardian for any minor children

Your signature

After you finish drafting your will, you must _______________ and _______________ it.

Executing a Valid Will

Choose the right witnesses

If someone challenges your will, your witnesses may be crucial to establishing the authenticity of your will and signature. What does that mean? It means that you want your witnesses to be

• _______________
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• _______________

Signing and executing your will

Although the specific requirements for execution are different from state to state, I suggest taking a conservative approach to executing your will. If you want to go a bit overboard:

• _______________
• _______________
• _______________
• _______________

Trusts

What’s a Trust and Why You Need One

Any person who creates a trust is called the _______________ . The grantor may also be referenced as the _______________ or the _______________ of the trust. For example, when you create a revocable living trust. you are the grantor. You then transfer assets into the trust, which is managed by the _______________ for the benefit of your _______________ .

Benefitting from Trusts

Not everybody needs a trust. Probate is often quite simple for _______________ , and _______________ are often overblown. If you can achieve your estate planning goals with a _______________ , you may want to stop there. As you review your estate plan, if your circumstances change, you’re free to create and execute a _______________ .

They’re flexible

You can provide for your incapacity

You can avoid taxes

Trusts can be a powerful tool to avoid estate taxes. Common trusts include

• _______________
• _______________
• _______________

You can avoid probate

When you leave your estate to your heirs with a will or don’t create an estate plan at all, a probate court distributes your estate. Using a trust provides some significant advantages:

• When you leave assets by will, your heirs have to wait months for the probate process to finish before your bequests are distributed to them. _______________.
• _______________ . With probate, your business may languish for weeks or months while your heirs petition the court to appoint somebody to manage your interests.
• If you’re in an estate where your representative and the attorney for the estate are paid a percentage of the value of your estate, having major assets held by your living trust may significantly reduce the cost of probate.
• _______________ .

A trust can help protect your privacy

A trust doesn’t need to go through probate. Thus, in most cases, the terms of the trust are never made part of a _______________ .

Selecting a Trustee

Questions to consider when selecting a trustee include

• _______________
• _______________
• _______________
• _______________
• _______________

Choosing Your Beneficiaries

Transferring Assets into Your Trust

A trust may be created to hold a _______________ , such as a house or life insurance policy. If maybe more _______________ , created to hold whatever assets you transfer over to the trust. But whatever the design and purpose of your trust, for any assets you intend to include in the trust, you should define the powers of the trustee and how you ultimately want those assets to be distributed to your beneficiaries.

Staying in control

With many trusts, you may retain _______________ over trust assets even after they’re transferred into your trust. If your trust is _______________ , one obvious power you retain is the right to revoke the trust.

Giving (or limiting) your trustee powers

When you draft your trust, you may give the trustee very broad powers over the trust’s assets, or you may grant narrow powers. Powers commonly granted within a revocable living trust include

• _______________
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Cancelling the trust

When you create a trust, you will create it either as a _______________ trust or as an _______________ trust.

Distributing trust assets

As with your will, when you draft your trust, you get to pick where your money goes. You may impose _______________ on gifts, such as when trust income or assets will be distributed to your beneficiaries.

Putting Your Trust into Effect

Once you have drafted your trust, you must execute it. That is to say, you need to _______________ it in front of witnesses to make it _______________ . I suggest having a signing ceremony where the following people are present:

• _______________
• _______________
• _______________
• _______________

When the Trust Ends

You should provide for how the _______________ will distribute any _______________ of your trust after distributing all specific gifts. Even if you don’t think your trust will have any remaining assets, the unexpected can happen.

Probate Administration

Your estate is the total amount of property you own at the time of your death. Probate is the process through which _______________ and _______________ .

Navigating Probate Court

The probate court’s actions include

• _______________
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Discovering How Estate Size Affects Probate Procedures

Probate for small estates

Some estates have very limited assets, perhaps just a few thousand dollars, so it may be possible to seek disposition of personal property without administration by a probate court. The person who pays the final expenses of the estate, such as medical bills or funeral costs, submits a simple petition to the court requesting reimbursement, along with

• _______________
• _______________
• _______________
• _______________

Probate for larger estates

Large estates continue to require _______________ , in which a _______________ is appointed to act on behalf of your estate. This process typically takes between _______________ and _______________ , depending upon the size and complexity of your estate.

Understanding the Role of the Personal Representative

The personal representative is typically required to be a _______________ of the state where your estate is probated or to be a close relative. The personal representative is often referred to as the _______________ or _______________ of your estate. Your representative is required to act in the best interest of your estate and can be held _______________ for mismanaging the assets of your estate.

The following sections describe some of the representative’s responsibilities in more detail.

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Hiring a Lawyer

In many probate cases, the lawyer’s role is largely advisory. In more complicated cases, the lawyer may have to help with court proceedings or defend against a will contest. Services the lawyer typically provides include

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• _______________

Overseeing Probate: The Judge

The probate court judge appoints your representative, oversees the _______________ , and approves the _______________ from your estate. If any motions are brought before the court, such as a request for an interpretation of the language of your will, or if a will contest occurs, the probate court judge _______________ .

Avoiding Will Contests

When a will contest succeeds, the most common outcomes are for the court to

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Validity

The first class of challenge to a will claims that your will isn’t valid. The most common claims relate to the execution of the will:

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Another set of claims relate to the validity or authenticity of the will itself:

• _______________
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Mental incapacity

The most common allegations of incapacity are that

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Undue influence

When evaluating allegations of undue influence, a court’s considerations include

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