Advancements and Will Documents

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 What Is Estate Planning?

A person’s estate refers to all of their property, including but not limited to:

  • Personal items, such as furniture, jewelry, and family heirlooms;
  • Vehicles;
  • Bank accounts, including savings accounts;
  • Real estate, such as the home that they lived in;
  • Stocks and securities; or
  • Various other assets.

When you die, an estate plan provides instructions regarding how your property is to be managed and distributed. A well-developed estate plan can have numerous benefits. An example of this would be how a clear plan can minimize your loved one’s tax burden. Another example would be how a legally valid estate plan can reduce the need for probate court proceedings.

While estate planning is most commonly associated with wills and trusts, it can also address other issues, such as:

  • How you want to receive medical treatment when you become incapacitated;
  • Your status as an organ donor;
  • Who will make legal and financial decisions on your behalf when you are incapacitated;
  • Who will care for your minor children, if any exist;
  • Who will take over your business interests, if any exist; and
  • Your funeral arrangements, especially details associated with any prepaid arrangements such as a funeral service or burial plot.

If you do not create an estate plan for yourself before you die, your estate will be distributed according to your state’s specific intestate succession laws. These laws vary considerably from state to state and often result in property distributions that go against what you may have wanted.

What Are Advancements? How Do Advancements Differ From Wills And Trusts?

In legal terms, advancements refer to a specific type of irrevocable transfer, generally from a parent to their child. In terms of trusts and wills, advancements involve transferring some or all of the parent’s estate, which the child would have collected upon the death of their parent(s). To put it simply, an advancement is simply a transfer of the parent’s assets that occurs during their lifetime, or in advance, rather than at the time of their death.

Advancements are not generally considered to be loans or debts, due to the fact that the transfer is made without the recipient being asked for any compensation in return. However, advancements differ from gifts in that the recipient may be required to account for the advancement before they can claim the remainder of the decedent’s estate.

To further illustrate the difference, a will is a legal document that provides directions detailing how a person’s estate is to be distributed when they die, as was previously mentioned. It will detail what the estate consists of, as well as who specifically is to receive what. An example of this would be a will specifying which specific child is to receive what amount of money.

A trust allows one person, or the trustee, to hold property for the benefit of another person or the beneficiary. Unlike wills, trusts may be transferred before the death of the testator. An advancement differs from both wills and trusts in that the transaction takes place between the testator and the recipient while the estate owner is still alive. There has not yet been a death, and as such, no third party is involved in the transaction.

What Are Some Examples Of The Legal Effects Of Advancements?

In terms of an advancement, the transfer is coming out of the testator’s estate. Because of this, it reduces the amount of money that the beneficiary may claim later on. An example of this would be if a testator transferred $20,000 to one of their multiple children. If the transfer is considered to be an advancement, that child would have that $20,000 deducted from their share of the estate when it is distributed at their parent’s death.

The other children would not have anything deducted from their share at the time of distribution because an advancement was not made to them. However, if the transfer is not considered to be an advancement, it is unlikely that there will be any deductions made at the time of distribution.

Depending on the specific jurisdiction, the testator may be required to state whether a transfer is actually an advancement. Under most circumstances, the testator must indicate whether the transfer is to be classified as an advancement so that it may later be deducted from their estate. Other jurisdictions have determined that any transfers that are made prior to death are to be considered an advancement. Still other states include transactions made from a person other than a parent or child in their definition of an advancement.

Additionally, some jurisdictions automatically presume that a transfer that occurs just prior to the testator’s death is considered to be an advancement, while a transfer that is made earlier in the testator’s life would not be considered an advancement. In order to avoid any confusion, it is always best for the testator to clearly indicate whether they intend for a specific transfer to be treated as an advancement. This can generally be accomplished through effective estate planning well before the testator’s death is anticipated, and by creating a statement in writing that records the transaction.

What Is A Will Contest?

It is helpful to discuss contesting a will, as unclear instructions for transfers could result in a will contest or various other legal problems. Will contests generally involve the beneficiaries disputing various terms of the will, and challenging the validity or authority of the will and its provisions. A no contest or anti contest clause may be inserted into the will in order to prevent beneficiaries from contesting the will by stating that they will forfeit any inheritance that they have.

Not everyone who is involved with the testator may contest their will; only a person who has what is referred to as “standing” may contest a will. A person who has standing to contest a will is someone who is named in the actual will document, and is therefore a beneficiary. Someone who would lose their inheritance under the will if the will was considered to be invalid could also have standing to contest the will.

There are several legal arguments or grounds that could allow a person to contest a will:

  • Mistakes or errors made in the will, which are sometimes proven and clarified by other documents that were authored by the decedent;
  • Ambiguous or vague language used in the will;
  • Lack of mental capacity, as in the testator was not sound of mind when creating their will; and
  • Fraud or duress, if it is believed that the will was created under fraudulent conditions or the threat of harm.

Contesting a will is generally initiated by filing a lawsuit with the appropriate probate court. This could involve submitting various documents which highlight the reasons for contesting the will. There may also be filing deadlines associated with contesting a will. To reiterate, documents that record transfers as either gifts or advancements are the best way to avoid future legal disputes such as will contests.

Do I Need An Attorney For Assistance With Advancements And Will Documents?

Advancements can be an especially complicated sub-area of several different types of laws. Additionally, advancement designations vary by state. If you are planning your estate, an experienced estate attorney can ensure your specific needs are met, while also ensuring that the language used in the will is clear and could avoid future legal disputes.

A local lawyer will be best suited to helping you understand your legal rights according to your state’s specific laws regarding the matter.

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