Overview of Will and Trusts
Every adult should have a will, no matter how old they are. The information is easy to understand if taken in small doses. This article provides an overview of wills, trusts, and living wills. It includes links to resources to which you can go for additional information.
Wills A will, also known as a last will and testament, is a legal declaration with which a person names one or more individuals to manage their estate. It includes instructions for the distribution of their property when they die.
Requirements for making a will generally include the following.
The person making the will, called the testator, must clearly identify himself, and state that the document is a will.
If the testator has previously made a will, he must state that the previous will is hereby revoked.
The testator must demonstrate that he is of sound mind, and has freely and willingly made the will.
The testator must sign and date the will, usually in front of two impartial witnesses who are not beneficiaries of the will, and who also sign.
One or more beneficiaries are listed in the will.
It should be noted that laws regarding wills vary by state, and wills in some states, among them California, are not notarized.
Jurisdictions in 25 states recognize holographic wills — wills handwritten by the testator— and a few recognize nuncupative wills — oral wills. After the death of the testator, a probate procedure may be held in a court to determine the validity of a will, and to appoint an executor to carry out the provisions of the will. Usually a will must be presented for probate within 30 days of the death of the testator. A testator may revoke a will by tearing it up or striking out his signature, or by making a new will.
Trusts A trust is an enforceable three-party relationship whereby the first party transfers title of property for the benefit of a second party. A third party holds the title in trust for the benefit of the second party. In legal terminology, a settlor creates a trust by transferring property to a trustee who holds the property in trust for the benefit of the beneficiaries.
Trustees are held to a high standard of behavior. They have the Duty of Loyalty — they must administer the trust only for the benefit of the beneficiaries. They also have the Duty of Prudence —they must administer the property with care, skill, and caution. They also have the Duty of Impartiality — they must not do anything that benefits one beneficiary over another.
A trust can be created in different ways.
As a document called a living trust or inter vivos trust, signed by the settlor and the trustee.
An oral declaration.
As a testamentary trust, created by the settlor's will and in effect after he dies.
By a court order.
Requirements for a valid trust include the following:
There must be a clear intention to create a trust.
The property to be held in trust must be clearly identified.
The beneficiaries of the trust must be clearly identified.
Living Wills A living will — also called an advance directive or health care directive — is not like the type of will that includes instructions for the disposition of your property after your death. It is, as the name implies, a document that is in effect while you are alive. It expresses your wishes for end-of-life medical care, informing your family members, medical care providers, and others what you want to happen if you are no longer able to care for yourself and make your own decisions.
Sources: http://www.legalzoom.com/wills-estate-planning/summary-compare-wills.html http://www.legalzoom.com/personal/estate-planning/living-will-overview.html http://www.nolo.com/legal-encyclopedia/wills-trusts-estates https://en.wikipedia.org/wiki/Trust_law http://www.investopedia.com/terms/i/intervivostrust.asp http://www.alllaw.com/articles/wills_and_trusts/article7.asp https://www.fidelity.com/estate-planning-inheritance/estate-planning/trusts