Chapter 36.docx - BUSINESS LAW Chapter 36 Estate Planning Wills Estates and Trusts Introduction Estate planning is the process by which someone decides

Chapter 36.docx - BUSINESS LAW Chapter 36 Estate Planning...

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BUSINESS LAW Chapter 36 Estate Planning: Wills, Estates, and Trusts Introduction Estate planning is the process by which someone decides how his assets are to be passed on to others at his death. Estate planning has two general objectives: to ensure that the assets are transferred according to the owner’s wishes and to minimize state and federal taxes. People have at their disposal four basic estate planning tools: (1) wills, (2) trusts, (3) gifts, and (4) joint ownership. 1. Wills and Estate Administration Describe how property, both real and personal, can be devised and bequeathed to named heirs in a will. Understand what happens to property of a decedent when there is no will. Explain the requirements for “testamentary capacity”—what it takes to make a valid will that can be admitted to probate. Describe the steps in the probate and administration of a will. Section Outline A will is the declaration of a person’s wishes about the disposition of his assets on his death. Normally a written document, the will names the persons who are to receive specific items of real and personal property. Unlike a contract or a deed, a will is not binding as long as the person making the will lives. Although most wills are written in a standardized form, some special types of wills are enforceable: o A nuncupative will is one that is declared orally in front of witnesses. © 2017 FlatWorld 1
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BUSINESS LAW o A holographic will is one written entirely by the testator’s hand and not witnessed. o Soldiers’ and sailors’ wills are usually enforceable, no matter how informal the document, if made while the soldier is on service or the sailor is at sea (although they cannot usually transfer real property without observing certain formalities). o A conditional will is one that will take effect only on the happening of a particular named event. o A joint will is one in which two (or more) people use the same instrument to dispose of their assets. o Mutual or reciprocal wills are two or more instruments with reciprocal terms, each written by a person who intends to dispose of his or her assets in favor of the others. Probate is the process by which a deceased’s estate is managed under the supervision of a court. o In most states, the court supervising this process is a specialized one and is often called the probate court. o Probate practices vary widely from state to state. o In an attempt to bring uniformity into the conflicting sets of state laws the National Conference of Commissioners on Uniform State Laws issued the Uniform Probate Code (UPC) in 1969. Will Requirements and Interpretation: The following are the requirements for wills. o Capacity: Any person who is over eighteen and of “sound mind” may make a will.
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  • Spring '16
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