Estate Planning

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Estate Planning

Back 1

The process of planning for management in the transfer of wealth when the estate holder becomes incapacitated

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Estate

Back 2

wealth, property, anything you own

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Property

Back 3

anything that can be owned; property is rights

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Real Property

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land and any attachments to the land

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personal property

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anything that is not permanently attached to the land

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easement

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right to cross a person's property (these restrictions can affect the value of the property)

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intangible property

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does not have physical characteristics; its value is derived from the rights it grants to the owner

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Fee Simple

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the highest form of ownershipq

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Life estate

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the right to use, possess, and enjoy property, but only based on a lifetime (your life or another's)

-can't be transferred after death

-value is indefinite

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Estate for years

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the right to use, possess, and enjoy property for a period of time less than a lifetime (if death occurs than the interest is transferred to the owner's beneficiaries)

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2 types of future interest

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Remainder & Reversion

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Reversion Interest

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future interest in a property that is retained by the transferor after transferring a life estate or estate for years to the transferee

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Remainder Interest

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a future interest in property that a transferor transfers to a transferee and then after termination to another person (A---B---C) *no reversion to transferor

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Vested

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without any conditions or precedent; absolute

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contingent

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depends on some factor; not certain to happen

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single person ownership

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single man or woman; single= never been married

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unmarried

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you have been married before (divorced, not widowed)

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Tenants in common

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two or more people owning property together

- most common

- own a specific percentage, but have right to enjoy entire property

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Joint tenancy

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must be equal ownership, *right of survivorship*

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unilateral severance

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one person can sever a joint tenancy; the amount of ownership freezes and they no longer have right of survivorship

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tenants by the entirety

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Not in CA; has right of survivorship and is only available to married couples, no unilateral severance

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community property

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exclusive to married couples; presumed if acquired after marriage

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exceptions to CP presumption

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1. property owned before marriage

2. property inherited or gifted

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comingling

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SP becomes CP if it can not be traced back to the original source

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transmutation

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changing the character of the property through a written agreement

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Quasi-Community Property

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property acquired during marriage while domiciled in a non-CP state

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Community Property with Right of survivorship

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Merge CP w/ JT

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Power of attorney

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an individual gives the right to another individual to act as a representative

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general power of attorney

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has the power to enter into anything that is stated in a document

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Durable power of attorney

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power to do estate planning for the principal and survives incapacity

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surrogates

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alternate decision makers, one who acts on behalf of another when there is no durable power of attorney (usually family)

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statutory surrogate

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a decision maker that is selected by the patient at the time of the situation (trumps durable power of attorney)

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primary beneficiary

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specifically named person or entity to receive property by a will, trust or contract

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alternative beneficiary

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person who will receive the primary beneficiary dies first

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lifetime beneficiary

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have a life estate

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remainder beneficiary

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receives the property in fee after the lifetime beneficiary

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specific beneficiary

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named to receive specific items of property

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residuary beneficiary

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receives anything that is leftover after specific beneficiaries

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beneficiaries at law

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someone who receives a portion of the estate by law

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testamentary capacity

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1. understand nature of testamentary act

2. understand nature and extent of testator's property

3. must know next of kin and the impact of the dispositions on them

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written witnessed will

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1. must have 2 witnesses (not beneficiaries)

2. signed by testator

3. words of testamentary intent

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statutory will

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1. 2 witnesses

2. pre-printed with fill-in-the-blanks

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international wills

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created by people who live in a different country, require extra certification

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holographic will

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handwritten:

1. must be written by testator

2. must be signed

3. property must be named

4. beneficiaries must be named

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nuncupative will

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oral will; not recognized in CA

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electronic wills

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videos/recordings/emails-not valid

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pertinent clauses in wills

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1. words of testamentary intent

2. identify family

3. nominate an executor

4. identify specific gifts and specific beneficiaries

5. residuary clause

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codocil

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amendment to a will

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revocation of a will

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1. create a new will

2. destroyed/mutilated

3. missing wills

4. at law- divorced and didn't change it

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Testate succession

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distribution by a will or trust

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intestate succession

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when there is no will or trust, there is a set of laws that specify how your property is distributed

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escheats

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when an heir cannot be found, the property is transferred to the state

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requirements for step child to inherit

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1. became a step-child as a minor

2. remained a step-child until death of decedent

3. healed out as "child"

4. never adopted for a legal reason

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per stirpes distribution

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specific procedure for transferring estate after death with no will or surviving spouse (each living child or issue receives a share)

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per capita

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(testate succession only) each person that is a taker will get an equal share

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per capita at each generation per stirpes

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each living child or issue receives an equal share based on line of descent