1. BB30 Business Law 5.02 Summer 2013
Business Law
Objective 5.02: Understand Retirement Planning, Death Benefits, Disability and Wills and Estate Planning.

2. Wills and Estate Planning
Will -- a document that is signed during your lifetime that provides for the distribution of your property when you die.
Each state has it’s own requirements for making a will.
North Carolina General Statute 31-1 states-”Any person of sound mind, and 18 years of age or over, may make a will”
Testate – to die with a will
Testator – a male that makes a will
Testatrix – a female that makes a will
Bequest or legacy – a gift of personal property in a will
Devise – a gift of real property in a will
Beneficiary – someone who receives property in a will
Heirs – one who inherits property from a will or from someone without a will
Wills and Estate Planning
Will- a document that is signed during your lifetime that provides for the distribution of your property when you die. Each state has it’s own requirements for making a will. North Carolina General Statute 31-1 states-”Any person of sound mind, and 18 years of age or over, may make a will”
1. Testator and Testatrix-Testate mean to dies with a will. So a testator is a male that dies with a will and a testatrix is a female that dies with a will.
bequest or legacy-a gift of personal property made by a will
devise-is a gift of real property made by a will (in most states)
beneficiary-is someone who receives property by a will
2. Heir-is one who inherits property from a will or from someone without a will
3. Requirements of a Will
a. Capacity- means that the person that is making a will is of sound mind and of legal age in the state which they are making the will. In N.C. the age is 18 or older. So it basically has the same meaning as it does in contract law.
b. Requirements for the State the Will is Written For-North Carolina General Statute 31-1 states-”Any person of sound mind, and 18 years of age or over, may make a will”. Different states have different laws and requirements for wills.
c. Will must be in writing, properly signed and witnessed- N. C. General Statute states An attested written will written is a will signed by the testator and attested by at least two competent witnesses as provided by this section. The testator must, with intent to sign the will, do so by signing the will himself or by having someone else in the testator's presence and at his direction sign the testator's name thereon. The attesting witnesses must sign the will in the presence of the testator but need not sign in the presence of each other. Similar requirements exist in other states.
BB30 Business Law 5.02 Summer 2013

3. Wills and Estate Planning
Requirements of a Will:
Capacity -- the person that is making a will is of sound mind and of legal age in the state which they are making the will; has the same meaning as contract law
Requirements for the State the Will is Written For
North Carolina General Statute 31-1 states-”Any person of sound mind, and 18 years of age or over, may make a will”
Different states have different laws
Will must be in writing, properly signed and witnessed
N. C. General Statute An attested written will is a will signed by the testator and attested by at least two competent witnesses as provided by this section. The testator must, with intent to sign the will, do so by signing the will himself or by having someone else in the testator's presence and at his direction sign the testator's name thereon. The attesting witnesses must sign the will in the presence of the testator but need not sign in the presence of each other. Similar requirements exist in other states.
BB30 Business Law 5.02 Summer 2013

4. Wills and Estate Planning
Oral or nuncupative wills
Legal in some states when certain conditions exist.
Those conditions are if the nuncupative will is stated during the maker’s last illness or near death and by active duty military personnel. This act must be witnessed and is usually limited to personal property.
Revoking or changing a will
The will can be revoked or changed provided the maker has the intent and capacity to make the changes.
Codicil -- is a formal, written and witnessed document. It is subject to the same requirements as a will.
d. Oral or nuncupative wills-are legal in some states when certain conditions exist. Those conditions are if the nuncupative will is stated during the maker’s last illness or near death and by active duty military personnel. This act must be witnessed and is usually limited to personal property.
e. Revoking or changing a Will-as a will is designed to be in effect at the maker or testator/testatrix’ death, anytime up until that time, the will can be revoked or changed provided the maker has the intent and capacity to make the changes. This is completed by the use of a codicil-which is a formal, written and witnessed document. It is subject to the same requirements as a will.
f. Family and Spouse Protections- State laws contain a provision for protect surviving family members. Some have a property provision which prevents creditors from taking a person’s whole estate. This usually is a statutory amount (Ex: $25,000) in either personal property or money. If there is no surviving spouse, then the same amount would be equally divided between any surviving children of the deceased.
BB30 Business Law 5.02 Summer 2013

5. Wills and Estate Planning
3. Family and Spouse Protections
State laws contain a provision for protect surviving family members.
Some have a property provision which prevents creditors from taking a person’s whole estate. This usually is a statutory amount (Ex: $25,000) in either personal property or money.
If there is no surviving spouse, then the same amount would be equally divided between any surviving children of the deceased.
BB30 Business Law 5.02 Summer 2013

6. Wills and Estate Planning
Intestate – to die without a will
Estate Distribution (By State Law)
It is important to have a will no matter what your age
The person’s property and estate is distributed according to the state that is their home state.
Real property is handled according to state law. The distribution of all property is by relationship to the deceased. Ex: a spouse is entitled to one third or one half of the estate. Any surviving children divide the remaining estate between them
What Happens Without a Will?
Intestate-means without a will
Estate Distribution-By State Law- Why it is important to have a will no matter what your age is. If a person dies without a will they are considered intestate “without a will”. Therefore that person’s property and estate is distributed according to the state that is their home state. Real property is handled according to state law. The distribution of all property is by relationship to the deceased. Ex: a spouse is entitled to one third or one half of the estate. Any surviving children have the rest of the estate divided between t
Probate and Estate Settlement
a. Probate Court- The probate process starts when a family member or personal representative of the decedent files the decedent’s will and other forms and documents with the Clerk of Superior Court in the county of the decedent’s personal residence. If the decedent did not have a will, then he or she is considered to be “intestate” and a separate form is filed requesting permission from the Clerk of Superior Court to administer the decedent’s estate. The probate process ends when all of the decedent’s debts, taxes and administrative expenses have been paid and all of the decedent’s remaining possessions have been distributed to the decedent’s beneficiaries.  
b. Executor and Executrix-as a testator or person making a will, you are allowed to designate an executor or executrix as the representative to carry out your will when you die.
BB30 Business Law 5.02 Summer 2013

7. Wills and Estate Planning
Probate and Estate Settlement
Probate Court
The probate process starts when a family member or personal representative of the decedent files the decedent’s will and other forms and documents with the Clerk of Superior Court in the county of the decedent’s personal residence.
If the decedent did not have a will, then he or she is considered to be “intestate” and a separate form is filed requesting permission from the Clerk of Superior Court to administer the decedent’s estate.
The probate process ends when all of the decedent’s debts, taxes and administrative expenses have been paid and all of the decedent’s remaining possessions have been distributed to the decedent’s beneficiaries.  
Executor (Executrix)- the male (female) representative you appoint to carry out your will when you die
Administrator (Administratrix) – the male (female) appointed by the court to distribute your estate if you die intestate (without a will)
BB30 Business Law 5.02 Summer 2013

8. Wills and Estate Planning
Power of Attorney -- grants power to a representative of your choosing to legally act and make decisions on your behalf.
Grantor -- The person giving the power of attorney
Attorney-in-fact -- The person receiving the power of attorney
Special Power of Attorney- gives authority over a specific item such as managing a person’s rental property
General Power of Attorney -- gives authority over all matters
Medical Directives- (another form of a special power of attorney) – the person given the power can make decisions about the grantor’s medical care in case the grantor becomes incompetent
Power of Attorney- grants power to a representative of your choosing to legally act and make decisions on your behalf.
The person giving the power of attorney is the grantor
The person receiving the power of attorney is the attorney-in-fact
a. Special Power of Attorney- give authority over a specific item such as managing a person’s rental property. A general power of attorney gives authority over all matters.
b. Medical Directives- as another form of a special power of attorney, a medical directive deals specifically with a person’s medical care so that the person granted the special power of attorney can make decisions about the grantor’s medical care in case the grantor becomes incompetent.
c. Living Will-is a special power of attorney that directs whether your life as the grantor should be prolonged by artificial means if you have no reasonable chance of recovery.
Trust-is a legal device by which property is held by one person for the benefit of another. The settler is the person who sets up the trust.
a. Private Trust-
b. Testamentary Trust
c. Spendthrift Trust
BB30 Business Law 5.02 Summer 2013

9. Wills and Estate Planning
Living Will -- a special power of attorney that directs whether your life as the grantor should be prolonged by artificial means if you have no reasonable chance of recovery
Trust -- a legal device by which property is held by one person for the benefit of another. The settler is the person who sets up the trust.
Private Trust-- is one that involves individual settlers and beneficiaries.
Testamentary Trust-- is a trust created by a will. It only comes into use when the person making the will dies.
Spendthrift Trust-- is a trust that protects the settler’s assets from being spent recklessly by the beneficiary and the beneficiaries creditors.
BB30 Business Law 5.02 Summer 2013