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Contents of a Prenuptial Agreement by oly19302


Contents of a Prenuptial Agreement document sample

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									 Estate Planning

              Class 8
        What is an estate?
   An individual’s “estate” is any interest the
    individual has in any personal or real
     This includes property owned solely by the
      individual or owned in common with another.
            Probate Property
   Property owned by the decedent at the
    time of death
     This   property is distributed by the court
   Probate property includes
     Any  interest in real and personal property
     Life insurance that names the estate as
     Pending law suits for money damages
     Debts owed by the deceased
     Trusts established under a will
      Nonprobate Property
   Property that was owned by the decedent
    at the time of death that passes directly to
    heirs rather than going through probate
     Life estate
     Living (inter vivos) trusts
     Life insurance policies naming specific
     Community property agreement
     Joint tenancy with right of survivorship
      Why make a plan?
 Provide for spouse or partner at death
 Provide for minor children
 Provide for children of a prior relationship
 Designate specifically who – person or
  entity – will have benefit of one’s property
 Avoid taxes
 Avoid probate
           Sources of Law
   Primarily statute
     In Washington RCW Title 11 is the title
      governing estate interests
     Title 26 governs community property
     Title 83 governs taxes of estates and gifts

   Some common law sources
     Appellate
     Restatements
What happens without a plan?
   Intestate Succession
     Ifthe individual does not provide for property
      distribution prior to death, the government
      will decide how to distribute the property.
        Decedent  is called an intestate
        Includes property in a will if there is a lapsed gift
        Includes all property if will is invalid

   RCW 11.04.015
     Priority   of distribution
    Protection of Families
 Homestead exception: A statutory
  provision providing for the protection of
  homes – exempting them from forced sale
  or execution.
 Family allowance: Statutory provisions
  providing for an allowance in money to
  help maintain the family during the
  administration of the estate.
     InWashington, the protections for the family
     are set out in RCW 11.54
   If a person dies without a will and without
    an heir, the estate will pass to the state.
     RCW   11.08.140
       Kinds of Plans
 Prenuptial agreements
 Community property agreements
 Life insurance
 Wills
 Trusts
 Health care directives
 Powers of attorney
    Prenuptial Agreements
   An agreement made in anticipation of
     Provide  for distribution of property upon
      dissolution of marriage
     Also provide for agreement as to distribution
      upon death of one spouse
Community Property
   One spouse’s share in community
    property may be gifted by will.
     Ifan estate is probated all community
      property is subject to probate
   A community property agreement can
    change the nature of property from
    separate to community at the time of
    death and can transfer ownership to the
    surviving spouse at the time of death.
          Life Insurance
 Whole life – these policies are both life
  insurance and an investment (premiums
  are set at the time of purchase)
 Universal life – also are both life insurance
  and an investment (premiums may vary
  during the course of policy ownership)
 Term life – only insurance
     Purchased   for a specified term (with renewal
   A will is a legal expression of an
    individual’s wishes as to how his or her
    property should be distributed when that
    person dies.
     The   person making the will is the testator
   RCW 11.12 governs the making of wills in
          Kinds of Wills
   Formal will
     Written,signed by the testator, witnessed
      by two witnesses
   Holographic (or informal) will
     Usuallyhandwritten by the testator
     These are NOT valid in Washington
   Nuncupative (or oral) will
     Theseare NOT valid in Washington
      (however there a limited exceptions)
   Legal capacity
     Must   be an adult (18 in Washington)
   Testamentary capacity (of sound mind)
     Knowing  what property one owns
     Knowing who his or her relations are
     Knowing what he or she wants to do with the
   Voluntarily act (without undue influence)
       Contents of a Will
   Exordium clause
              testator, states his domicile and
     identifies
      announces that this is his will
   Revocation clause
     revokes   all prior wills, codicils
 Identification of family clause
 Dispositive provisions (specific devises)
 Minor beneficiary clauses
     Testamentary     guardian/Trust for minor
   Simultaneous death clause
      Contents of a Will
   Appointment of personal representative
     Statement   of powers and duties
 Separate writing clause
 Attestation clause
 Self proof clause
              Types of Gifts
   Devise
     Gift   of real property
   Bequest or legacy
     Gift   of personal property
        Separate Writing
   A will may refer to a separate writing that
    directs disposition of tangible personal
    property not otherwise specifically
    disposed of in the will
     Will must specifically refer to the writing
     The writing is handwritten or is signed by the
     The writing describes the property and the
      recipients with reasonable certainty
   This may be written before or after the
    execution of the will
     Provisions for Minors
   Appointment of testamentary guardian of
    minor child (RCW 11.88.080)
     Only applies where one parent is deceased
      and surviving parent is making the
     Person appointed must be qualified to serve

   Establishment of a trust for minor child
     Execution of the Will
   One of the few formalities left in law
     Must be signed
     Must be witnessed by two witnesses
        Witnesses    must be able to say
             They know who the testator is
             The testator was competent
             The testator was not acting under duress or undue
     Testator must ask witnesses to witness; they
      must both be present at the time the will is
      signed (presence of testator and presence of
      each other)
       Self-Proving Clause
   Washington statute provides for a self-
    proving clause.
     Affidavit signed by the witnesses under oath.
     This affidavit makes it unnecessary to call the
      witnesses in the probate proceeding to prove
      the validity of the will
    Letters of Instruction
   Information for the family and personal
     Preferred  funeral arrangements
     Location of assets
     Location of important papers (including will)
     Information about insurance policies and
      pension plans
     List of debts, creditors
     Contact information for key people (personal
      representative, CPA, attorney, heirs)
   A codicil is an amendment or addition to
    the will
     The same formalities are required for
      executing a codicil
   A will can be revoked by
     Writing a new will
     Physically destroying the old will
 A trust is an agreement under which
  money or other assets are held and
  managed by one person for the benefit
  of another.
 Common benefits include
     Providing  personal and financial safeguards
      for the beneficiaries
     Postponing or avoiding unnecessary taxes
     Establishing a means of controlling
     Meeting social or commercial goals
      Essential Terms
 Trustor (grantor or settlor) – the person
  who creates the trust
 Trustee – the person or entity who holds
  legal title of the trust property for the
  benefit of another
 Trust Property (principal, corpus or res) –
  the property placed in trust by the settlor
 Beneficiary – person to benefit from trust
 Trust purpose – reason why trust is
   To be a valid trust
     Settlor must manifest an intention to create it
     Trust must have assets (this may include
      future assets)
     Trust must have legal purpose (not against
      public policy)
     Must identify beneficiary
     Must be established by written document or
      by operation of law
    Categories of Trusts
 Inter vivos or living trusts – created while
  trustor is alive
 Testamentary – created as part of will
 Revocable living trusts – trustor retains
  right to change or terminate the trust
 Irrevocable living trusts – trustor gives up
  right to revoke after creation
 Express trusts – intentionally created
 Implied trusts – created by operation of
Rule Against Perpetuities
   All interests in property must vest within
    21 years of the life of someone who is
    alive at that time of the creation of the
     Insures that someone will own the property
      within a reasonable time
     RCW 11.98.130
    Termination of Trusts
   Trusts terminate when:
     Express  terms of trust instrument require
      termination at a specific time or upon the
      happening of a specific condition (child
      reaches age of majority)
     Fulfillment of trust purpose
     The same person owns both legal and
      equitable or beneficial title of trust property
     Settlor revokes the trust
 Probate is a legal procedure for settling the
  affairs of a person who has died and
  overseeing the distribution of the decedent’s
  property to the rightful beneficiaries.
 The process
     Collects and protects decedent’s property
     Identifies beneficiaries and creditors
     Pays all debts, expenses, taxes
     Distributes the property of the estate properly
   Jurisdiction of the court is triggered by
     Filing Petition to Probate a Will (person died
      testate) or
     Petition for Letters of Administration
 Personal Representative or Administrator
  is appointed
 Court’s continued involvement is to
  resolve disputes or interpret documents
Duties of Personal Rep.
 Notify heirs and creditors
 Take possession of and inventory estate
 Determine fair market value of estate assets
 Determine names, locations of heirs
 Collect debts owed to the decedent
 Represent the estate in any challenges to
  the will
 Complete any pending lawsuits in which the
  decedent has an interest
         Duties of PR
 Prepare tax returns and pay all estate and
  income tax
 Pay the valid claims of creditors
 Sell property – when necessary – to pay
  debts and taxes
 Transfer title to real property and certain
  personal property
 Distribute the remaining assets to the
  designated heirs
 File a Declaration of Completion of Probate
           Estate Taxes
   One reason for making estate plans is to
    avoid estate taxes
    Health Care Directive
 A document that expresses the individual’s
  desires regarding the withholding or
  withdrawal of life support measures
 A helpful website discussing the issues
  that should be considered is
      Power of Attorney
   Three forms
     Durable Power of Attorney
     Power of Attorney for Health Care Decisions
     Power of Attorney

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