A Primer on Wills
Author(s): LYNNE S. HILOWITZ
Source: Family Advocate , Fall 2015, Vol. 38, No. 2, CROSSING PATHS WITH A TRUST
(Fall 2015), pp. 41-45
Published by: American Bar Association
Stable URL: https://www.jstor.org/stable/24628850
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Following
Followingare
aresome
some
basic
basic
definitions
definitionsand
andexplanations
explanations
of of
concepts
conceptsand
andterms
terms
commonly
commonly
AA
Primer
on Wills
Primer
on
used
used in
in planning
planningand
and
drafting
drafting
wills
wills as
aspart
partofofa aclient's
client's
complete
completeestate
estateplan.
plan.
By LYNNE S. HILOWITZ
A "will" is a written instrument in which an individual, also called the testator, directs the disposition of
WILL his or her property, appoints one or more people to administer its terms, specifies how final debts and
"DAa ÇTPÇ
taxestaxes
should
be paid,
and ar,d
sets sets
out out
additional
instructions
toto
bebefollowed
R
S^10U'C'
be Pa'd'
additional
instructions
followedafter
after death.
death.
_ "; _____ It is important to note that a will does not dispose of all of a person's property, since ownership of
some property may pass automatically to other people at death. Such property, as described below, is not
subject to the probate process—and should not be included in a will.
document.
Property
that commonly
passes this
11
I Joint
Joint
Ownership:
Ownership:
Where
Where
an an
individual
individual
owns
owns
document.
Property
that commonly
passes this
is in is
retirement
accounts.
In some
property
propertyjointly
jointlywith
with
one
one
oror
more
more
others,
others,
it will
it way
will way
in retirement
accounts.
In states,
some states,
individuals
also can
their vehicles
with a with a
usually
to to
thethe
joint
owners
usuallypass
passautomatically
automatically
joint
owners
individuals
alsoregister
can register
their vehicles
"transfer
on
death"
designation,
allowing
them
upon
upon the
thedecedent's
decedent'sdeath.
death.
While
While
thethe
specific
specific "transfer on death" designation, allowingto
them to
pass
to the to
individual
named. named,
wording
wording varies
varies depending
dependingon
onstate
statelaw,
law,the
thetitle
title
totodirectly
Pass directly
the individual
such property must usually specify that it is held
in "joint tenancy with right of survivorship," or
II
w Trust
Trust Property:
Property: Property
Property that
that aa person
person puts
puts
in a living trust or some other trust arrangement
for married couples, "tenancy by the entirety" or
« . . , . . r . . „ also passes accordingalso
to passes
the trust
terms
rather
than
according
to the trust
terms
rather than
communityproperty
property
with
right
or survivorship. , . . , , . . ...
"community
with
right
of survivorship."
being
being included
includedin
ina awill.
will.
Money
and other
property
that passesthat
according
■
I Payable
Payable on
on Death
DeathDesignations:
Designations:
ForFor
some
some
Money
and other
property
passes accord
to the
of terms
a will are
assets."
types
typesof
ofproperty,
property,
an an
individual
individual
may may
specify
specify
that
thatterms
to the
of called
a will "probate
are called
"probate assets."
"Non-probate
assets" are
thoseare
notthose
subject
to subject
the
a new
new owner
ownertake
take
it it
directly
directly
when
when
he or
heshe
or dies
she
dies "Non-probate
assets"
not
to the
will
or the
probate
rather
rather than
thandesignate
designate
ownership
ownership
in ain
will
a will
or other
or
other
will
or theprocess.
probate process.
FALL 2015 41
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r^T^sPO<\TT'T\/rP
Of ÇPOÇTTTVTi' manner
manner by
bywhich
whicha atestator
testator
may
may
dispose
dispose
of property
of property
underunder
a will varies
a will greatly.
varies greatly.
^ v^yoi
v^yoi I I11VV12,
12,por
por
exatT)p|ei
examp|e<
a gift
a gift
0r 0r
bequest
bequest
of property
of property
may be
may
made
be made
"outright,"
"outright,"
or "in trust,"
or "in or
trust," or
PROVISIONS
PROVISIONSa acombination.
combination.
In In
addition,
addition,
the the
nature
nature
of the
ofbequest
the bequest
may bemay
specific
be specific
or general,
or general,
and
and
conditional
conditionalor
orunconditional.
unconditional.
M Demonstrative
Bequests:
The "demonstrative"
■
I Outright
Outright Gift:
Gift: A
A simple
simple example
example of
of an
an outright
outright gift
gift is:
is: H Demonstrative
Bequests:
The "demonstrative"
legacy legacy
is a bequest
of a certain
sum or security,
payable
out of
"Igive
"I giveand
andbequeath
bequeaththe
thesum
sumof
of$1,000
$1,000 to
to John
John Jones."
Jones. "is a bequest
of a certain
sum or security,
payable out
of
a particular
particularfund
fundoror
account—for
account—for
example,
example,
a bequest
a bequest
of of
Such
Such aa gift
giftisisunconditional,
unconditional,
unencumbered
unencumbered
by trust;
by trust;
whenwhen
$ 1,000
1,000 payable
payableout
out
ofof
the
the
proceeds
proceeds
of aof
specific
a specific
bondbond
and and
the
the testator
testatordies,
dies,John
John
Jones
Jones
would
would
receive
receive
the sum
the sum
of of
mortgage.
mortgage.IfIfthe
thefund
fund
designated
designated
is not
is not
sufficient
sufficient
to cover
to cover
$1,000,
$1,000, assuming
assumingsufficient
sufficient
funds
funds
are are
in the
in the
probate
probate
estateestate
to
to
the
the bequest,
bequest,ititmay
may
bebe
paid
paid
from
from
thethe
general
general
assets
assets
of the
of the
pay
pay the
thegift.
gift.
estate.
H
Trust:
In to
contrast
the
outright
gift, a gift in trust __ ^ .
S InIn
Trust:
In contrast
the outrightto
gift,
a gift
in trust
c l • • i i i i fl General Bequests: This
type of
bequest
is type
exemplified
11 General
Bequests:
This
of bequest is exemplifie
disposes
disposes
of property
of property
by giving legalby
title giving
to the property
legal title to the property r r i >
, , . , i • i jl c ■ by a gift of a fractional
the testator
s estate,
a
by a portion
gift of aof
fractional
portion
of theor
testator's
estate, o
to
and the
title to a named
toa atrustee
trustee
andequitable
the equitable
title beneficiary.
to a named beneficiary. . r •
Tii • • i i i j i i ■ i general class of property
in class
the of
estate.
For in
example:
general
property
the estate. For example:
The
trustee,
or principal,
holds the property—which
can
1 he
trustee,
or principal,
holds the property—which
can & r j ,■ tr
•11
I give
give to
to my
my friend
friend Alice
Alice one-half
one-half of my estate.
estate.
be
be tangible,
tangible,intangible,
intangible,
real,
real,
personal,
personal,
or mixed—according
or mixed—according
to
to the
thetestator's
testator's
directions,
directions,
andand
maymay
pay the
pay interest
the interest
or
or
principal
to the
as a will directs.
principal
to beneficiary
the beneficiary
as a will
An
Anexample
example
of a simple
of agift
simple
in trustgift
is:
• I give my personal belongings to my son, Rafi.
directs. The
The subject
subject of
of the
the gift
giftisisnot
notparticularized
particularized
in in
the
the
same
sam
manner
thespecific
specific bequests
above.
Where
in trust is: manner
asasthe
bequestsdiscussed
discussed
above.
Whe
assets
of an
estate
are
insufficient
decedent's
II give
giveand
and
bequeath
bequeath
to my
to Trustee
my Trustee
the sumthe
of $10,000.
sum of $10,000.
assets
of an
estate
are
insufficientto
to pay
pay the
the decedents
de
and
the
estate
taxes,
the
law
requires
that
the
general
gift
My
MyTrustee
Trustee
shall
shall
paypay
the income
the income
to my to
son,my
Jim,
son,
until
Jim,
he isuntil he is and the estate taxes, the law requires that the general
applied
tofirst
pay to
such
and and
where
such
21
21 years
yearsold;
old;
when
when
my my
son reaches
son reaches
the agethe
of 21,
agemy
ofTrustee
21, mybe
Trustee
be first
applied
pay obligations,
such obligations,
where
suc
payments
are
necessary,
the
gifts
are
adeemed
to
the
exte
shall
shall
pay
pay
the the
principal
principal
of the Trust
of to
the
myTrust
son.
to my son. payments are necessary, the gifts are adeemed to the
ex
they
theyare
arereduced.
reduced.
TheThe
law law
further
further
differentiates
differentiates
betweenbetween
Here, the trustee is made the owner of a $10,000 sum until
Here, the trustee is made the owner of a $ 10,000 sumpersonal
until pcrsona,
and real
and property.
real property.
General
General
bequests
bequests
ofofpersona
persona
the testator's son reaches age 21. Until that time, the trustee
the testator's son reaches age 21. Until that time, the trustee
property
propgrty
are adeemed
ar£ adeemed
before
before
devises
deyises
of real
of rgal
property.
property.
is
is obligated
obligatedtotopay
pay
the
the
sonson
all income
all income
derived
derived
from from
trust trust
property, however, the principal of $10,000 is only delivered
property, however, the principal of $10,000 is only delivered
H Marital
U Marjta|
Bequests:
Bequests;
For federal
por federal
taxtax
purposes,
purposes,all
a|] beques
beques
tothe
the
beneficiary
when
hethe
reaches
the age
specified. (Details . ■ • . , •> > c __ .u _ _ „ >
to
beneficiary
when he
reaches
age specified.
(Details
' b r made to a surviving spouse
made
aretodeductible
a surviving rrom
spouse the
are deductible
testator from
s
the testa
as to how the trustee may invest the principal are covered in
as to how the trustee may invest the principal
adjusted
are gross
covered
estate.
in adjusted
For example,
grQss
if aestate
testator's
For gross
examp
es
the section on "Fiduciary Provisions," below).
the section on Fiduciary Provisions, is
below).
$6,530,000
^ $6,530,000
after deducting
after
administrative
deducting
andadmin
funera
_ . expenses of $100,000, the adjusted
expenses gross
of $100,000,
estate
the adjusted
would
gross
be estate would be
■ Conditional
Conditional
Gifts:
Whether
gift
is made
outright or in nnA rc , , Arin An„ ,
Ä
Gifts:
Whether
a gift is amade
outright
or in
$6,430,000.
If the
testator made
a $3,000,000
bequest t
a ,,& .. . , $6,430,000. If the testator
made
a $3,000,000
bequest
to a
trust,
it may
also
be conditional.
Examples of conditional . . , , ,, , , , , ,
trust,
it also
be may
"conditional."
Examples of conditional
. ... . surviving spouse, then the taxable
surviving
estate
spouse,would
then the
be
taxable
reduced
estate to
would be redu
provisions
provisions
include:
include:
$3,430,000.
$3,430,000.
••I Igive
give
and bequeath
and bequeath
to my daughter,
to my
Joan, daughter,
if she is marriedJoan, if she is married
The
The"marital
"marital
deduction"
deduction"
is oneis
ofone
the most
of the
important
most
at
atthe
the
timetime
of my death,
of my
1,000death,
shares of 1,000
my A T&T
shares
stock. of my A T&T stock.
devices
devices
for
for
estate
estate
and tax
andplanning.
tax planning.
It includes
It property
include
• •1 Igive
give
and bequeath
and bequeath
to my son, John,
to my
the sum
son,
of $10,000,
John, the sum of $10,000,
passing
passing
through
through
the the
will as
will
wellas
aswell
property
as property
passing outp
provided
provided
my estate,
my for
estate,
tax purposes,
for exceeds
tax purposes,
$100,000.
exceeds $100,000.
it.
it. For
For
a bequest
a bequest
to qualify
to qualify
for the
for
marital
the deduction,
marital de
it
meet stock
the technical
requirements
of the the
estate
tax statutes
In
In
the
the
first first
example,example,
Joan doesn't get
Joan
the stock
doesn't
if she is single
get the
if she
is single meet
technical
r
when
her her
father,father,
the testator,
dies. testator,
In the second, dies.
if the testa
when
the
In however.
the second,
The marital
if thebequests
testa- may
however.
be made
The
either
marita
outr
in dies,
trust. his
If made
trust,or
the
trust
mustIf
bemade
drafted
tor's
tor's
estate
estate
contains
contains
only $99,000only
when he
$99,000
dies, his son
when
John or
he
sonvia
John
in
trust.
vit
that
the principal,
upon
the death
of the surviv
would
would
not receive
not any
receive
part of theany
$10,000
part
gift. of the provide
$10,000
gift.
provide
that
the principal,
spouse,
spouse,
may
may
be freely
be freely
conveyed
conveyed
by the surviving
by the surviv
spouse
HI
Specific
Bequests:Bequests:
Specific bequests
are gifts of bequests
HI
Specific
Specific
most are
cases,gifts
where of
the most
estate exceeds
cases,the
where
federal the
exempt
es
definitely
ascertainable
property, such as property,
a particular piece such
definitely
ascertainable
amount—$5.43
as a particular
million in
piece
2015—a
amount—$5.43
qualifying marital
mi
of
jewelry,
a specific
enumerated
stock certificates
bequest
is almost
an automatic
requirement
to reduce
of
jewelry,
a antique,
specific
antique,
enumerated
stock
certificates
bequest
is almost
an es
a
and
bonds,
or a certain
parcel
of real property.
the
and
bonds,
or a
certain
parcelUnless
of real
property.
taxes. However,
Unless
in certain
the instances
taxes. However,
where the surviving
in cert
will
specifies
otherwise,
this class of gifts,
pursuant
to law,
will
specifies
otherwise,
this
class
of isgifts,
spouse's
pursuant
estate is equal
to law,
to oris
greater
spouse's
thanestate
the testator's
is equa
e
the
lastlast
to be applied
to applied
the debts of to
the decedent
or taxes ofthe
the
to be
the debts
the
marital
decedent
bequestor
should
taxes
be the
reduced
marital
to avoid
bequest
"double
of
the
estate.
However,However,
where the decedent
no longer
of
the
estate.
where
theowns
decedent
taxes" upon
no longer
the death
owns
of thetaxes"
surviving
upon
spouse.
the death
the
the
specific
specific
property
property
at death, or the
at item
death,
is not or
described
the item is not described
sufficiently,
sufficiently,
then thethen
gift is the
"adeemed"
gift
or is
lost,"adeemed"
and no
or lost, and no
substitution
substitution
is made is
formade
it.
for it.
42 FAMILY ADVOCATE www.shopaba.org/familyadvocate
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■Unified
Unified
Credit
orExemption:
Federal AExemption:
unified
credit
■
Credit
or Federal
unified credit HAResiduary
H
Residuary
Bequests:
Bequests:
The residuary
Thedisposition
residuary
is the
disposition is the
offsets
and taxes.
estate
taxes.
estate
is remainder
imposed
on
offsets
giftgift
and estate
An estate
taxAn
is imposed
ontax
remainder
of a testator's
of estate
a testator's
not disposed
estate
of elsewhere,
not disposed of elsewhere,
decedent's
based
the
value
of
theby
estate
assets,
aadecedent's
estate estate
based on the
value on
of the
estate
assets,
either
either
specific
by
or specific
general bequests.
or general
Usually,bequests.
this provision
Usually, this provisio
including
including
life insurance.
life insurance.
In 2015, the
In
federal
2015,
exemption
the federal
is theis
last
exemption
the
of the
lastdispositive
of the dispositive
clauses and is clauses
intendedand
to include
is intended to inclu
amount
amount
is $5,430,000,
is $5,430,000,
and the lifetime
and the
giftlifetime
amount is all
gift
property
all
amount
property
not otherwise
is not disposed
otherwise
of asdisposed
well as conditional
of as well as conditiona
the
same.
The maximum
estate
tax 40%.
rate
is that
currently
40%.
the
same.
The maximum
estate tax rate
is currently
gifts
gifts
fail that
to takefail
effect
to and
take
legacies
effect
thatand
are renounced.
legacies that are renounced.
Inaddition,
addition,
states
their
own
estate
tax,may
In
about about
15 states15
impose
theirimpose
own estate
tax, The
residuary
The
residuary
bequest
bequest
be made
may
outright
be made
or in outright
trust,
or in trust,
although
although
most most
exempt exempt
estates up toestates
$1 million.up
Reducing
to $ and
1 million.
in some
and wills,
inReducing
some
the residuary
wills, the
bequest
residuary
is in the form
bequest
of an is in the form of a
estate
estate
taxes
taxes
is an imperative
is an imperative
part of estate planning
part of
forestate
some extended
planning
extended
trust arrangement
for
trustsome
arrangement
for survivors.for survivors.
clients.
"Fiduciary"
"Fiduciary"
is a general
is a term
general
for a person
term
named
forasaanperson
executor, named
trustee, oras
guardian
an executor,
in
trustee, or guard
FIDUCIARY
FIDUCIARY
a will or
a will
other estate
or other
planningestate
document.
planning
Fiduciaries may
document.
be individuals
Fiduciaries
or banks, one may be individuals or b
pp
P jI?
r c0\
i/^xt
H qQ
person,
IHMÇ
or several.
person,
Every
ortestator
several.
must Every
name an executor,
testator
andmust
if the will
name
contains
an any
executor,
trust
and if the will cont
I' l\v7
* *V -i 1 ./' iN
' ^o ^
provisions,
provisions,
a trustee. a
Guardians
trustee.
may be
Guardians
nominated where
may
the testator
be nominated
leaves minor children
where the testator leaves
or
orthose
those
with with
disabilities,
disabilities,
but a court must
but
approve
a court
the nomination,
must approve
in additionthe
to naming
nomination.
the
In addition to
initial
initial
fiduciaries,
fiduciaries,
the testator
the
alsotestator
should namealso
alternates
should
in casename
the first
alternates
choice is unable
inorcase the first choice i
unwilling
unwilling
to serve.
to serve.
taken
in naming
a or
guardian,
■
IB Executor
Executor or
or Personal
Personal Representative:
Representative: The
The executor
executor or taken in naming
a guardian,
since he
she will actsince
in placehe or she will act in place
of the
deceased
parent.
Some
personal
personal representative
representativeisisresponsible
responsiblefor
for
collecting
collecting
thethe
estate
estate °f the deceased
parent.
Some factors
to consider
are factors
whether to consider are whethe
is an
appropriate
age, has similar views to the
assets
assets and
and distributing
distributingthem
themasasthe
thewill
willdirects.
directs.Additional
Additional the guardianthe
is an guardian
appropriate age,
has similar
views to the
testatorwill
onbeeducation,
be with
physically
able to cope with t
duties
duties include
includefiling
filing
thethe
willwill
with
with
the the
locallocal
probate
probate
or
or testator on education,
physically ablewill
to cope
the
duties—and
most
important:
will
agree
to
serve beforehand
surrogate
surrogatecourt,
court,filing
filingfederal
federal
andand
state
state
estate
estate
tax tax
returns
returns
and and duties—and most important: will agree to serve beforehand,
income tax returns, filing a final accounting, and settling
I§ Bond: The law provides that unless the testator makes
claims
claims against
againstthe
theestate.
estate.
TheThe
duties
duties
maymay
last last
fromfrom
several
several " Bond: The Iaw Provides that unless the testator makes
a contrary provision in the will, each of the fiduciaries
months
months to
to several
severalyears,
years,depending
dependingononthe
thecomplexity
complexity
of of
thethe a contrary Pulsion in the wdl, each of the fiduciaries
named must
must file
file aa bond
bond and
and maintain
maintainthat
thatbond
bonduntil
untilthe
the
estate.
court releases
releases them
them from
from responsibility.
responsibility.Most
Mostwills
willsspecify
specify
i8 Trustee:
who
has
legal
title
to to
property
ain a that
Trustee:AAtrustee,
trustee,
who
has
legal
title
property
that in
fiduciaries
shall
fiduciaries
serve without
shall serve
bond, without
especiallybond,
where
esp
trust,
obligation
of of
investing
or distributing
trust, also
alsohas
hasthe
the
obligation
investing
or distributing
fiduciaries are
fiduciaries
related orare
have
related
close personal
or have ties
close
with
personal
the
it as
asthe
thewill
will
trust
document
directs.
The trustee
must
it
or or
trust
document
directs.
The trustee
must testator.
testator.
periodically
periodically
account
account
for trust
for assets
trustand
assets
pay over
and or
pay
apply
over
theor apply the
11 Commissions: Fiduciaries are entitled to receive certain
interest
interestoror
profits
profits
earned
earned
or trust
or trust
balance
balance
to those
tospecified.
those specified.
® Commissions: Fiduciaries are entitled to receive certain
and commissions
commissions
performing
their Statutes
duties. Statutes
Oftentimes,
Oftentimes,
a trustee
a trustee
is given
is given
discretionary
discretionary
powers powers
by thefees
fees
by the
and
for for
performing
their duties.
specifically
provide
method
by which
such
testator.
testator.
For
For
example,
example,
a gift
a gift
in trust
in made
trusttomade
a minor
to may
a minor
specifically
may provide
thethe
method
by which
such fees
and fees and
commissions
are
be computed.
computed.
Generally,
they
direct
directthe
the
trustee
trustee
to pay
to pay
onlyonly
the income
the income
earned earned
by the trust
by
the
commissions
trust
are to
to be
Generally,
they are
set are
at set a
a small
ofthe
the
value
of estate,
the estate,
although
principal
principal
until
until
thethe
minor
minor
reaches
reaches
his state's
his age
state's
of majority,
age of
majority,
a smallpercentage
percentage of
value
of the
although
family fami
unlessthe
the
trustee
believes
be in
the
best interests
of that
unless
trustee
believes
it to it
be to
in the
best
interests
of that
members
members
often
often opt
opt to
towaive
waive
them,
them,
and most
and most
states provide
states provide
the commission received must be "reasonable" for the
minor
minor to
to make
make the
the payouts
payoutsdifferently.
differently. that the that
commission
received must be "reasonable" for the
amount
amount
of of
work
work
involved.
involved.
Some testators
Some testators
also opt to also
makeopt to make
S
Guardian:
A
guardian
is
the
person
named
to
take
H Guardian. A guardian is the person named to take a gjft
a gift
under
under
thethe
willwill
in lieu
in lieu
of the
of statutory
the statutory
commission,
commission.
custody
custody
ofof
thethe
decedent's
decedent's
minor minor
children,children,
to manage to manage
IfeHI
Powers:
mannerinin
which
fiduciaries
may deal
property
propertyfor
forthe
the
minors,
minors,
or or
both.
both.
While
While
it is it
usually
is usually
best
best
Powers: The
The manner
which
fiduciaries
may deal
to
to name
name
one
one
person
person
as guardian
as guardian
of bothof
the
both
person
the
and
person
with
with
the
and
the
assets
assets
of theof
estate
the and
estate
trust
and
principal
trust principal
is set forthis set forth
property,different
different
people
sometimes
named.
Also,
property,
people
are are
sometimes
named.
Also, in
the
the "powers
"powers
clause"
clause"
of aofwill.
a will.
The testator
The testator
may give
may
the
give the
though
thoughthe
the
person
person
named
named
to take
tocustody
take custody
in a will in
is usually
a will
fiduciaries
fiduciaries
is usuallyvery
very limited
limited
powers
powers
or empower
or empower
them to
them
invest
toin
invest
given
givenserious
serious
consideration,
consideration,
there
there
still still
mustmust
be a court
be a all
all
court
kinds
kindsof
ofsecurities,
securities,
to operate
to operate
the testator's
the testator's
business,
business,
and
an
even
to handle
handlethe
the
assets
in their
discretion—and
to
hearing
hearing
toto
finalize
finalize
the choice
the choice
and ensure
and the
ensure
person
the
named
person
evennamed
to
assets
in their
own own
discretion—and
to
is qualified
qualified
Where
the decedent
a surviving
is
to to
act.act.
Where
the decedent
leaves a leaves
surviving
invade
invade
thethe
trust
trust
or sprinkle
or sprinkle
the trust
the
income
trustamong
income
named
among name
spouse,
spouse,that
that
spouse
spouse
willwill
automatically
automatically
become
become
the legal
the
beneficiaries.
beneficiaries.
legal
AllAll
fiduciaries
fiduciaries
are required
are required
by lawby
to law
act in
to aact in a
guardian
guardianunless
unless
there
there
are are
issues
issues
of incompetency
of incompetency
or other
"prudent
or"prudent
other and
and reasonable"
reasonable" manner,
manner,
however,
however,
and to
and
handle
to handle
theassets
assets
for
benefit
of named
the named
beneficiaries
unusual
unusualcircumstances.
circumstances.
It also
It is
also
a good
is aidea
good
to idea
appoint
to the
appoint
for
thethe
benefit
of the
beneficiaries
rather rather
alternates
alternates
if the
if the
firstfirst
choice choice
can't act.can't
Extreme
act.care
Extreme
must be care
than
than
for
must
self-enrichment.
for
beself-enrichment.
FALL 2015 43
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DFCT
ARATORY
DECLARATORY
In
In addition
addition to
toproviding
providingdirections
directions
for
for
how
how
property
property
should
should
be be
EXPLANATOI
& EXPLANATORY
EXPLANATORY
distributed
distributed
and
and
how
how
debts
debts
andand
taxes
taxes
should
should
be paid,
be paid,
somesow
contain additional directions.
S ION S contain additional directions.
PROVISIONS
H Business
A will may include
declarator
S
I! Explanatory
Explanatory Provisions:
Provisions: Such
Such provisions
provisionsare
areintended
intended
to
toContinuation:
H Business Continuation:
A will may
inclu
and
instructional
advice to the
fiduciary
avoid
avoid attempts
attempts to
to contest
contestwills.
wills.Examples
Examplesinclude
include
suggestions
suggestions
and instructional
advice
to theregarding
fiduciary rega
continuing
or
winding
up
a
testator's
business
carryin
to trustees
trustees about
about when
when and
and how
how the
thetrust
trustprincipal
principalmay
maybe
becontinuing or winding up a testator's or
business
o
out a buy-sell
The testator
alsomay
recomm
invaded,
invaded, or
or explanations
explanationsfor
forwhy
whya aparticular
particular
person—such
person—such
out aagreement.
buy-sell agreement.
The may
testator
also
that that
the executor
consult
with certain
people concerning
as
as aa sibling
siblingor
orchild—was
child—was
omitted
omitted
from
from
thethe
will.
will.
the executor
consult
with certain
people con
the
the sale
sale of
of aabusiness
businessinterest
interest
oror
employ
employ
certain
certain
people
people
to t
continue
thecontinue
business. the business.
Survivorship clause:
Clause:The
Thelaws
lawsofofmany
many
states
specify
H Survivorship
states
specify
that
and
beneficiary
die at
time, time,
or
that if
ifaatestator
testator
and
beneficiary
diethe
at same
the same
or —
, L • • • Li i ■ 1 S Non-hypothecation: H
This
refers to will This
provisions
that
Non-hypothecation:
refers to
will provisions th
under circumstances
circumstances where
where it
it is
is impossible
impossibleto
toascertain
ascertainwhich
which . . r . . r ... ..
r . -11 i 1 -ii i i i restrict beneficiaries from
selling,
assigning,
or
pledging
their
restrict beneficiaries from selling, assigning, or pledging
of
survived
the the
other,
the testator
will be deemed
todeemed to . . ... . ° r r.
or them
them
survived
other,
the testator
will be
interests
in the
The clause
serves as a form of insuran
. interests in the will. I he clause
serves
as will.
a rorm
or insurance
havesurvived
survived
other
person.
Alternatively,
have
thethe
other
person.
Alternatively,
a will maya will may , , , r . , ,. r ,
thatnot
the squander
beneficiaryor
will
not squander
r f # that the benehciary will
dispose
or theor dispose of the
provide
that
a beneficiarv
does
not survive
the testator , -c l r ... ., c
provide
that
if aifbeneficiary
does not
survive
the testator
r J testator s girt before receiving testator's
it, or in
gift
the
before
case
receiving
or a trust,
it, or in will
the case of a trust,
for a specific period, then the bequest will pass to another
for a specific period, then the bequest
not discount
will
her interest
pass to
in the
another
trust principal
nQt in
hgr
advanc
i
person
organization.
person
oror
organization.
■
■ In
InTerrorem
Terrorem
clause:
clause:
This provision,
This provision,
more simply
more
cal
8 Tax
Apportionment:
To preserve
specific gifts,
and togifts,
B
Tax
Apportionment.
To preserve
specific
a "no-contest
clause,"
and
is to
useda in
"no-contest
situations where
clause,"
the test
avoid
the marital
and charitable
deductions,
some
avoidreducing
reducing
the marital
and charitable
may reasonably
deductions,
expect
some
a beneficiary
may reasonably
to contest the
expect
will.
wills
thatthat
estateestate
taxes will
not be
allocated
against
willsspecify
specify
taxes
will
notprovision
be
allocated
provides
against
that any
provision
person whoprovides
asserts anythat
othe
them.
ToTo
thethe
same
effect,
administration
expenses
may
be
them.
same
effect,
administration
claim
expenses
against
the will,
mayorbe
contests
claimit,
against
shall forfeit
the all
will,
prop
allocated
allocated
amongamong
the variousthe
assets.
various
and interest
the interest
will might have
bestowed
him or her
assets.
and
the
willon
might
h
MISCELLANEOUS
MISCELLANEOUS
Certain
Certain
wordswords
of art are
of frequently
art are frequently
used in connection
used in
w
DEFINITIONS
DEFINITIONS
wills.
wills.
Several
Several
of the of
most
the
common
most are
common
definedare
briefly
defin
be
11
11Attestation:
Attestation:
The clause
The in
clause
which in
thewhich
witnesses
B
the
Devise:
signify
witnesses
A gift of real signify
property.
SB Devise: A gift of
they
theyhave
have
seen
seen
the the
testator
testator
sign the
sign
will.the
Anywill.
person
Any
whoperson who
Iact
Intestacy:
the act
situation
a person
is
isnamed
named
to take
to take
property
property
in the willin
should
the not
will
should
as a Defines
not
as in
a which
® Intestacy.
Define
witness.
witness. dies without making a will,dies
orwithout
makes
making
a will
a will, or
that
makescannot
a will that cannot
be be
probated.
probated.
TheThe
assetsassets
of suchof
person
such
would
person
be distributed
would be distribut
S
A gift
of personal
property.
®Bequest:
Bequest:
A gift
of personal
property.
according
according
to the lawsto
of "intestate
the laws
succession"
of "intestate
in the state
success
_
where
he
or
shewhere
lives.
he or she lives.
B■
Codicil:
Codicil:
An amendment to An
a will. A codicil
amendment
must be
to
a
will.
A
executed
in the same mannerin
as the original
will,
and upon
executed
the
Hsame
Issue:
A person's child
manner
or children. Under most state
as th
the
death
of
a
testator,
the
original
will
and
all
codicils
are children are included
the death of a testator,
laws, adopted
the
in the original
definition of
probated
must
be be
proved.
probatedtogether;
together;each
each
must
proved.
"child
"child."
"
81 Corpus:
Corpus: Synonymous
Synonymous with
toto The
with "principal"
"principal" when
whenreferring
■
referring
Marital Right:
g Marjta|
surviving
Right;
spouse of
The
a decedent
surviving
is stat
spouse of
a trust.
utorily
utorily
entitled
entitled
to a to
specific
a specific
share of
share
a decedent's
of a decedent's
estate, the estate, the
amount depending upon the other survivors of the decedent.
H
■ Crummey
CrummeyPower:
Power:
AA
power
power
held
held
by by
a beneficiary
a beneficiary
of a of a amount dePendlng uPon the °ther survlvol'
• ii 1 c , ■ • i r If the testator does not
make
sufficient
provisions
in the in
will
If the
testator
does not make
sufficient provisions
the will
trust
trusttoto
withdraw
withdraw
a representative
a representative
share from
snare
the principal
from the
of
principal of r
or the nonprobate assets received by the surviving spouse are
a
a trust.
trust.This
This
enables
enables
the the
grantor
grantor
or settlor
or settlor
of the trust
of the
to trust
take to take or the n°nprobate assets received
less than the minimum amount prescribed by statute, then
a
a corresponding
corresponding
amount
amount
of the
of gift
the gift
tax annual
tax annual
exclusion.
exclusion. Iess than the mlmmum amount Presc
he
heoror
sheshe
maymay
opt toopt
make
to
anmake
"election
anagainst
"election
the will"
against
and
the w
B Descendant:
The
term
describes
the issue
of a be
deceased
Hi
Descendant:
The
term
describes
the issue
ofentitled
a deceased
to the minimum
be entitled
statutory
to amount
the minimum
instead of thestatutory
specified
in theamount
will.
person;
person;
it it
does
does
not not
applyapply
to children
to children
of a living
ofparent.
aamount
living
parent.
specified in the will.
44 FAMILY ADVOCATE www.shopaba.org/familyadvocate
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terminate
themeaning
bequest
unless
a will
specifies
to the contrary.
■ÄPer
Per
Capita:
Capita:
A systemA
distribution
system
among
distribution
heirs meaning terminate
among
theheirs
bequest
unless
a will
specifies
to the
contrary,
"by
"by
right
right
of number."
of number."
For example, assume
For aexample,
testator made assume a testator made
H Testamentary:
Arising
fromtoor
relating to a will.
aagift
gift
of $100,000
of $100,000
to two children,
to two
a daughter
children,
and son, per
a daughter
® Testamentary.
and
Arising
son,
from
per
or relating
a will.
For example,
allhad
trusts under
created
will are called
capita.
capita.
AlsoAlso
assumeassume
that during
that
his lifetime,
during
thehis
son had
lifetime,
^or example>
the
all son
trusts
created
theunder
will arethe
called
"testamentary
trusts"
as
differentiated
from
four
four
children
children
of his own
ofand
his
theown
daughter
and
had the
one child,
daughter
"testamentary
hadtrusts"
one aschild,
differentiated from other types of other types of
trusts
that
may
be created
lifetime, fa
and
and
both
both
the son
the
andson
daughter
andpredeceased
daughter
the predeceased
testator. trusts that
the
may
testator.
be created
during a during
lifetime,a fa
Under
Under
the per
the
capita
per
system,
capita
each of
system,
the five grandchildren
each of the five grandchildren
would
would
receive
receive
$20,000—that
$20,000—that
is, $100,000 divided
is,
by $100,000
5.
divided by 5.
LYNNE S. HILOWITZ, ESQ., of DaSilva
S Per Stirpes: A system of distribution among heirs,
& Hilowitz
beenpracticing
practicing lawlaw
B Per Stirpes: A system of distribution among heirs, ||flBj&j| & Hi|0witz
LLP,LLP,
hashas
been
in New since
York since
1981
and is
meaning
meaning
"by
"by
right
right
of representation."
of representation."
In the "per
Incapita"
the "per
in New
capita"
York
1981
and
isadmitted
admitted
example
above,
the son's
four children
example
above,
the son's
four children
would eachwould
receive each
to thereceive
New
to the
York,
New New
York, Jersey,
New Jersey,
and and
Florida
Florida
bars.
Her
focus
is
estate
planning
and
$12,500
and
the
daughter's
child
would
be
entitled
to
$12,500 and the daughter's child would be entitled to H^Bflj^Bjji bars. Her focus is estate planning and
$50,000.
$50,000. estate taxation, probate, estate
and
taxation,
litigation
probate, and litigation
of trusts and estates. She is chair of
the Rockland
Rockland County
Bar Association's
l>
IS Sibling:
Sibling:Brothers
Brothers
and
and
sisters
sisters
descended
descended
fromfrom
the same
the the
same
County
Bar Association's
Surrogate's
Court
and Estate
Planning
Committee,
a
parent.
parent.Half-brothers
Half-brothers
and and
half-sisters
half-sisters
of a testator
of a testator
are
Surrogate's
are
Court
and Estate
Planning
Committee,
a
board
member
of theof
Estate
Planning
Council of
Rockland
entitled
entitled
to share
to share
in a testamentary
in a testamentary
gift to be divided
gift to
among
be
divided
board
member
among
the Estate
Planning
Council
of Rockland
County,
co-chair of
the General
Practice Section
"brothers"
brothers and sisters.
and "sisters." County, Inc., and co-chair
ofInc.,
theand
General
Practice
Section
CCI
1
>5
1
cc
•
»
of the New York State Bar Association's Trusts and Estates
Law Committee.
H
11Spouse:
Spouse:
A A
gift
gift
made
made
to a to
spouse
a spouse
is, byis,
definition,
by definition,
a
a Law Committee.
gift to
to one
one who
who occupies
occupies that
thatrelationship.
relationship.Divorce
Divorcewill
will
Booksarticle/reviewing-estate-plansSharpe,
Deanna
L., & Dana L.,
Lee & Dana Lee
Books
article/reviewing-estate-plans
Sharpe,
Deanna
connection-divorce.
Baker, Financial Issues
Associated
with
&
& More:
More:connection-divorce.
Baker, Financial
Issues
Associated
with
ATrusts
TfULStS
A
a Child with Autism,
28 J.
Having a Child withHaving
Autism,
28 J.
Special
Special
needs
needs
trusttrust
Bibliography
Bibliography
Churchill,
Churchill,Martha
Martha
A., A.,
& Patricia
& Patricia
E.
E. Kefalas
KefalasDudek,
Dudek,
Adults
Adults
withwith
Fam.
Fam.
Econ.
Econ.
Issues
Issues
247 (2007).
247 (2007).
Support
Equitable
Equitable
distribution
distribution
and trusts
and trusts
Trust Income
or Assets
as Subject
Disabilities:
Disabilities:Prepare
Prepare
forfor
thethe
Future
Future
withwith
Trust Income
or Assets
as Subject
to to
Claim Against Beneficiary for Alimony,
Special
Needs
Trust,
(10) Claim
79 Mich.
Pennell,
Pennell,Jeffrey
Jeffrey
N„ N.,
Third
Third
PartyParty
a Speciala Needs
Trust,
(10)
79 MlCH.
Against Beneficiary for Alimony,
Maintenance, or Child Support,
BarBar
J. J.
1360
(2000).
Trusts
Trusts and
and Divorce:
Divorce: Is
Is aa Beneficiary's
Beneficiary's
1360
(2000). Maintenance, or
Child Support,
91 A.L.R.2d 262 (1963) ("The
Interest
Interest
Marital
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J.: Global
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the
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SRR
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