Flashcards in Week 1 Reading - Test 1 - Sheet1 Deck (52):
will and associated documentation
written declaration of a person's intent to distribute property after his or her death
A will is a method by which (1) may be transferred
1. title to property
Wills are executed when (1) but are (2), meaning legally binding only upon the person's death. This means that until death the will is (3), and that property to be bequeathed to a (4) may be sold or given away while the person is alive.
1. the person is alive
One who executes a will
If someone dies without a will, they die (1). This means usually (2) will determine how and to whom all the property she possessed will be distributed.
2. intestate succession
If a person has a will, she can determine how (1), which include state, federal and in some states inheritance taxes, will be paid--out of which source. An (2) in a will allocates the tax burden of the beneficiaries in a will. Without it, distribution of taxes is determined by (3).
1. estate taxes
2. apportionment clause
3. state law
(1) a person who is appointed to care for and manage the minor person, minor's property, or both. Can be a (2) or a (3). Parents are always the (4) of the child but not necessarily of the (5).
2. guardian of the person (care and custody of child)
3. guardian of the property (care of property until child reaches majority/emancipation)
4. natural guardians
A trust is a legal agreement in which a person called the (1) transfers (2) of property to a (3). The trustee will then manage the property for (4).
2. legal title
a trust which is drafted as part of the testator's will and only becomes effective upon the tesator's death. Prevents a live guardian, for example, from having to manage the trust for a deceased's children.
person who administers the deceased's assets and carries out the terms of the will. Gathers assets, pays debts/taxes, distributes property according to wishes.
personal representative/executor (or administrator if appointed by court)
3 things real property (realty/real estate) includes
1. land (inc. airspace and area below surface of the land)
2. structures permanently affixed to the land (houses, offices, etc.)
3. objects attached ot the land or buildings (fixtures)
3 types of property included in real property
1. immovable property
2. fixed property
3. permanent property
objects that were once personal property but have become permanently attached to land or buildings (trees, AC units, ovens, etc.)
all remaining property that is not realty--can be tangible (computer, painting) or intangible (checks, cash, stocks)
2 types of intangible property that jurisdictions may treat as tangible property
stamps, coins (collectible)
a form of intangible property--a persona right you retain when you do not possess the property, but have a right to recover in a lawsuit
chose in action
property (1) is owned solely by one person, either an individual perosn or an individual company and no others. Absolute ownership.
severally owned (property "in severalty")
two or more persons own property concurrently
4 types of joint ownership
1. joint tenancy
2. tenancy in common
3. tenancy by the entirety
4. community property
(1) is a form of ownership of property by two or more persons said to be joint tenants. The interest each holds at the inception of the initial possession is characterized by the (2), which are (3), (4), (5) and (6); all four are required for valid joint tenancy.
1. Joint tenancy
2. four unities of title
A unique concept of joint tenancy. Upon death of one tenant, his or her interest passes automatically to the surviving joint tenants
right of survivorship
Joint tenancy property is often called a (1) because the property automatically passes to the survivors as a (2).
1. non-probate asset
2. matter of law
A new tenant replacing a joint tenant with right of survivorship will be a (1) instead, and will not have (2). The other tenants will be (3).
1. tenant in common
2. right of survivorship
3. joint tenants with right of survivorship to each other (as before)
occurs when one of the four unities of joint tenancy is not present
tenancy in common
form of jointly owned property that requires the fourt unities of joint tenancy plus the unity of marriage. Both spouses are required to mortgage, sell or gift the property, and neither may sever the tenancy without written consent of the other. Not all states recognize this.
tenancy by the entirety
Pro of tenancy by the entirety
keep property out of reach of creditors (good for if one spouse has debts/loans)
a form of ownership of property between spouses. Generally all property acquired by a husband or a wife during marriage that is not classified as separate property
All property acquired prior to marriage or acquired during marriage by gift, will, inheritance or other means classified as separate by state statute
In a community property state, each spouse owns (1) and property acquired (2) is presumed community property. Upon death, the surviving spouse gets (3), and a spouse may not, under any circumstances, distribute more than (4).
1. half of the marital estate
2. during marriage (subject to proof that it is not part of estate)
3. his half (rest is passed by will/intestacy)
4. his half of the marital estate
4 advantages to joint tenancy
1. auto transfer of ownership upon death
2. no probate of that aset (no probate expenses)
3. joint management of property
4. immediate access to the asset by survivors
6 disadvantages to joint tenancy
1. disagreement on property management
2. unintended "inheritance" because property is not affected by the will
3. may destroy estate planning of the deceased (other tenants gain property, not beeneficiaries)
4. attachment by joint tenant's creditors
5. not affected by contract
6. potential tax consequences
total ownership of property; not subject to restrictions. Unless otherwise stated, all conveyances are presumed to create this
fee simple estate/fee simple absolute/estate in fee
While a fee simple estate is total ownership, more than one person may hold a (1) in the property.
1. fee interest
4 features of fee simple estate
1. fully transferable during the life of the owner
2. may be transferred by will
3. subject to the claims of creditors (before and after death of owner)
4. If it is not transferred by will, will pass through intestacy to the owner's heirs; subject to the rights of a surviving spouse
A (1) is the right of a person, called the (2), to use property until death.
1. life estate
2. life tenant
3 features of life estate
1. when owner dies, right to property ceases
2. no distribution via will
3. sale of property=only for life of owner
a life estate held for the life of another person
life estate pur autre vie
an interest retained by the grantor of a life estate that allows for the return of property to the grantor upon termination of the life estate
A (1) occurs when a grantor gives a life estate to a life tenant and gives the rest to a future owner, someone other than himself or herself (called the (2)). Commonly used to (3).
3. transfer property to children (as the remaindermen) so the property can be a non-probate asset ("poor man's will")
If a remainderman dies before the person whose life a life estate is based on, the remainder will (1).
1. pass to his estate upon the death of the other, and be distributed by will or by intestacy
In a (1), the time in which the tenant will hold the property is specifically designated. This is a form of (2), except the person has actual ownership.
1. tenancy for years
2. leasehold estate
All forms of property in a decedent's estate that require a probate court proceeding to distribute them to the proper beneficiaries or heirs. (includes will, intestacy)
1. Probate assets
Do not require any court proceedings to pass title from the decedent's estate to the beneficiaries or heirs. Not distributed by will or intestacy. Not subject to claims of decedent's creditors, spouse or children.
Two benefits of non-probate
1. property passes to beneficiaries more quickly
2. high cost of probate is greatly reduced
contract between insurance company and a person who purchases benefits; ins. co. will pay a named beneficiary a sum of money upon his death. Money is paid directly; no need for probate.
Naming an (1) to a life insurance policy prevents non-probate assets from becoming probate assets
alternate beneficiary (in case original dies first)
savings accounts that a depositor (trustee) opens for the benefit of another (the beneficiary). During depositor's life, account may be used by depositor. Upon death, passes to beneficiary, no probate estate.
Pay-on-death account/Totten trust
As long as not testamentary, this is not part of a decedent's probate estate because it actually becomes effective during the decedent's lifetime. Any assets made part of it are non-probate assets.
Life estates are neither (1) or (2) assets.
1. probate assets (no interest in property beyond death of named person)
2. non-probate assets (no interest remaining with estate)
Until there is only one remaining joint tenant with right of survivorship, no (1) is necessary to pass the deceased's interest to another.
1. probate proceeding