Wills and Trusts Ann Sanok, Instructor

The Journey Ahead.... Over the next ten weeks, you will study the laws of real property, wills, trusts, and estate administration, and you will be drafting a will, trust, and four probate forms. You are about to study one of the most interesting areas of specialization for paralegals--estate planning and administration. During the next ten weeks, you will learn about the specific terminology used in estate planning and how to draft the documents that clients need to dispose of their property, such as a will, a trust, and a power of attorney. You will also complete four probate forms for the estate administration process.

WHAT’S IT ALL ABOUT? Wills divide the property a person has accumulated during his or her life; precise legal requirements must be met when preparing wills. Topics for this course include the basic elements of a will; types of wills; responsibilities of the personal representative; contesting, revoking, and terminating a will; the role of government; classes of trusts; rules governing trusts; and purposes of estate planning, probate, guardianships, and more. Tax ramifications are also discussed.

First things first... Strive to post at least one original post on the DB and three responses to classmates. Label your paper submissions with your name and the unit #. Example: Smith, John Unit 3 Review my writing tips in Doc Share and under the Announcements section! Most units have the DB, a quiz, and a paper.

Our focus this week :  What are the main purposes of estate planning? ·Main points to know for the quiz

Know the difference: Between Estate Planning and Estate Administration.

Estate planning Estate planning is essentially a branch of financial planning. Its purpose is to help the individual acquire and accumulate assets so that all of his or her financial needs and desires during life can be met. The appropriate distribution of these assets on the person’s death is merely one aspect of overall estate planning. Rather than being concerned with a person’s demise, the estate planner is actually involved with a person’s life. If a person has no assets, there is nothing to distribute after death. The estate planner attempts to help the client to have assets sufficiently substantial so that there is a need to plan the distribution of these assets on death.

Estate Administration Estate administration concerns the distribution of a person’s assets after death. One who administers an estate will be involved with passing title to property from the deceased to his or her heirs, according to the wishes of the decedent or the provisions of the state statutes; seeing that all taxes are paid; and insuring the orderly conclusion to the person’s legal life. In other words, estate planning helps a person acquire assets during life, and estate administration helps distribute those assets upon the person’s death.

Two main types of assets  Nonprobate assets, which is property that passes directly from the decedent to another person without court authorization but by operation of law.  Probate assets, which is property that must be transferred by order of the court.

Gifts The most common method whereby a person transfers property during life is as a gift, which is a transfer of property by a donor (giver) to a donee (recipient) without consideration. This would constitute a non probate asset because it is already given prior to the donor’s death.

Example of a Gift If Mr. Mathew Money puts his daughter’s name on the deed of his while he is alive, that asset will go directly to her upon his death.

Trusts If properly drafted, a person can transfer his or her property while he or she is alive to a trust that is considered a separate legal entity, and so, upon death, the property is owned by the trust and not the decedent.

Example of a trust  Mr. Money wants to put some of his money aside now for his grandchildren’s education. He can set up a trust that will hold that money for his grandchildren for their use after he dies or even during his lifetime.

Life Insurance One of the most effective methods of leaving a fairly large amount of nonfederally taxable property is by the purchase of life insurance. Quiz alert: a whole life insurance have a surrender value A cash surrender value means that the insured can cancel the policy and receive money at any time specified in the policy.

Whats so great about a will? A will is a written document that, if certain statutory requirements are met, disposes of a person’s property upon his or her death according to the wishes stated in the will. One of the greatest tax advantages that can be effected by a will is a marital deduction. Under current law, all property left by a deceased to a surviving spouse as a marital deduction passes to the spouse tax free, regardless of the size of the estate. This tax advantage is only available to legally married couples and does not avoid taxation of that property upon the eventual death of the surviving spouse.

Example of a will Mr. Money leaves all his assets to Mrs. Money. She gets those assets tax free. Quiz alert: Know what a QTIP is!! page 7

Some vocabulary Intestate describes someone who dies without a valid will. Without a valid will, the property and assets will be distributed via the laws of succession.

Any Questions?

Last slide * DB – be present on multiple days! * Introduce yourself * Take the quiz * Never hesitate to me! * Have a great week!