Wills, Trusts & Estates Overview

The method of distributing property when someone dies without a will.

When a decedent has no heirs, the property is given to the state.

Directly related relatives inherit first (e.g., children, parents).

Less directly related relatives inherit if no lineal heirs exist. Limited to 5 degrees.

If a will doesn't cover all the assets, the remaining portion will be divided according to intestate laws.

120-hour survivorship requirement; treated as if they predeceased the other if the requirement is met.

Property given during life to a potential heir, which is counted toward their intestate share if they die intestate.

A surviving spouse receives a share of the estate upon intestacy, with proportions dictated by the presence children or parents.

A specific devise fails if the testator no longer owns the property when they die.

Gift of specific property fails if the property no longer exists. (Usually followed in NC)

A gift is satisfied if made during the testator's lifetime. (General bequests)

Beneficiary receives property debt-free, unless the will states otherwise.

Estate assets are insufficient to pay debts and all devises; devises reduced pro rata.

First part of an estate to be reduced to pay debts in the case of abatement. (reduced first).

Reduced second (after residuary devises),to pay debts in the case of abatement.

Reduced last, to pay debts in the case of abatement. (Specific items).

Surviving spouse's right to keep the homestead and its income until remarriage or owning another homestead, exempt from the deceased spouse's debts.

A legal will not require leaving a child any property.

A child born after a will is written, entitled to an intestate share or a portion set aside for them.

A legal arrangement where a settler entrusts assets to a trustee, to manage for beneficiaries.

The individual managing the trust's assets as directed by the trust.

The person(s) who will receive the benefits from the trust.

Real property in a trust is governed by the law of the state where it is located.

The settler of a personal property trust can designate the jurisdiction to oversee the trust.

A trustee must keep trust property separate from their own personal assets, ensuring clear distinction and avoiding commingling.

Trustees must maintain meticulous records of all trust activities, including transactions, decisions, and beneficiary communications.

Trustees are responsible for pursuing and defending the trust's legal interests, representing the beneficiaries' rights.

A trust that restricts the beneficiary's access and use of funds, preventing reckless spending and shielding assets from creditors.

A specific provision within a trust agreement that establishes the spendthrift nature of the trust.

A trust where the trustee has the power to decide when, how, and if to distribute assets to the beneficiaries.

A trust where the trustee has absolute control over distributions, with no specific guidelines.

A trust where the trustee is obligated to distribute funds only when necessary for the beneficiary's basic needs, such as education or housing.

A trust designed to protect assets from state support eligibility requirements, made irreversible to avoid the 5-year lookback period.

A trust that provides for the care and maintenance of a pet during its lifetime, terminating upon the animal's death.

A trust established for a charitable objective, such as poverty relief, education, religion, health, community, government, or municipal purposes.

A charitable trust cannot designate a specific, identifiable person as a beneficiary.

A legal principle allowing courts to modify a charitable trust's purpose if the original intent becomes illegal, impossible, impractical, or wasteful.

Trust modification requires consent from all beneficiaries or a court order if the settlor's purpose would be hampered by changing circumstances.

A noncharitable, irrevocable trust can be modified without court approval if all beneficiaries agree or circumstances change to threaten the trust's purpose.

A court may allow trust modification when unforeseen circumstances arise that would defeat or harm the trust's original purpose.

A trustee can modify the terms of a trust if sticking to the original terms would defeat or significantly hinder the settlor's goals.

The ability of a trustee to move assets from an existing trust to one or more new trusts, potentially with new terms, without breaking the trust.

A court may remove a trustee from their position if they demonstrate serious misconduct or failure to fulfill their duties.

A trust power allowing someone besides the trustee to decide who receives the trust assets.

The person who holds the Power of Appointment in a trust.

The individuals who are eligible to receive the trust assets under the Power of Appointment.

Using the Power of Appointment to decide how to distribute the assets in accordance with the trust's rules.

When deciding how to distribute assets using the Power of Appointment, factors include the donor's intent, any formal requirements, and whether the distribution is allowed by the trust.