Advancements and Will Documents

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What are Advancements?

Advancements are a type of irrevocable transfer, usually from a parent to their child.  In a trusts and wills setting, an advancement involves the transfer of some or all of the parent’s estate, which the child would have collected upon the parent’s death.  In other words, it is a transfer of the parent’s assets that occurs during their lifetime in “advance”, rather than at the time of their death.

Advancements are not considered loans or debts, since the transfer is made with the recipient being asked for any compensation in return.  However, an advancement is also different from a gift, since the recipient may be required to account for the advancement before they can claim the remainder of the testator’s estate.

What are Some Legal Effects of Advancements?

Basically, in an advancement, the transfer is coming out of the testator’s estate, so it reduces the amount that the beneficiary can claim later on. 

For example, suppose that the testator transferred $20,000 to Child A.  If the transfer is considered an advancement, then Child A would have $20,000 deducted from their share of the estate in the future when it is distributed at the testator’s death.  However, if it is not considered and advancement, they will probably not receive any such deductions at the time the will is executed.

Does the Testator Need to State Whether a Transfer is an Advancement?

This will depend on the jurisdiction.  In most cases, the testator must indicate whether a transfer is to be classified as an advancement, to be deducted from their estate.  In other jurisdictions, any transfers prior to death can be considered an advancement.  Also, in some states, an advancement may include transactions from a person other than the parent or child.

Finally, some jurisdictions automatically presume that a transfer just prior to death is an advancement, whereas a transfer that is made earlier on the testator’s lifetime wont’ be considered an advancement. 

To avoid confusion, it’s always best for the testator to clearly indicate whether or not they intend for a transfer to be treated as an advancement or not. This can be done by putting a statement in writing, preferably in a contract or other document to record the transaction.  Unclear instructions for transfers can lead to will contests or other legal problems in the future.

Do I Need a Lawyer for Assistance With an Advancement?

Advancements can sometimes be a very complicated and technical sub-area of trusts/wills/estates law.  If you or a loved one has any questions or inquiries regarding the creation of an advancement, you may wish to speak with a qualified wills attorney immediately.  Your lawyer can help explain how the laws in your area work, and will be able to help you with any forms or documents for the transfer.  Also, in the event of a will contest or legal dispute, your lawyer can help represent you during court if a lawsuit arises.

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Last Modified: 08-30-2012 04:14 PM PDT

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