A will is a legal estate planning instrument which makes a distribution of property. This distribution may be either to a specific person or to an entity.
The individual who creates a will is called a testator. An executor is an individual who is appointed by the testator of the will. The executor is the individual who oversees the distribution of the property in the will.
A trust is created by an individual who owns property. The trustee holds legal title to the property that is held in the trust. This individual has a legal obligation to care for the trust assets, including:
- Investing; and
The assets contained in the trust are distributed to designated individuals, who are known as beneficiaries.
What is Required for a Valid Will?
There are several legal requirements for a valid will. The most common types of wills individuals create are called self-proving wills.
A self-proving will is a will which has been witnessed and signed in accordance with the formalities required by the state in which the will is created. The formalities required will differ by state. For example, in the State of New York, the following formalities must be satisfied in order to have a valid will:
- Age: The testator is required to be 18 years of age or older;
- Capacity: The testator is required to be of sound mind at the time they sign their will;
- Intent: At the time a will is created, the testator is required have the present intent to make the will;
- Signature: The testator is required to sign and date the will. Another individual may sign and date the will if the testator is in their presence and directs them to do so;
- End of the will: The signature must be located at the end of the will;
- Witnesses: The testator must declare that the will is theirs and sign it in the presence of two witnesses, or acknowledge the testator’s signature to the witnesses. The declaration or acknowledgement may be done at the same time or at a separate time;
- In some states, the witnesses must sign the will while in the presence of the testator. Additionally, in some states, the witnesses must sign the will in succession;
- 30-day period: The two witnesses are required to sign the will within 30 days. The 30-day period begins when the first witness signs the will.
A second type of will an individual may create is a holographic will. This type of will is written by the testator but outside the presence of any witnesses. In some states, a holographic will that is signed and dated by the testatory is recognized as valid.
Not every state, however, recognizes a holographic will. For this reason, it is important for an individual to verify their local laws before they rely on a holographic will to distribute their property. In most states that recognize these types of wills, it is required that two or more individuals verify, or testify in court, that the will is, in fact, in the handwriting of the testator.
A third type of will which an individual may create is an oral will. An oral will is created when a testator orally communicates the terms of their will to another individual.
In most states, this type of will is not recognized as valid. There are, however, some exceptions. For example, some state courts will deem valid a will which is made by a member of the military while they are deployed.
What Must be Included in a Will?
There are several items which must be included in a will. In order for it to be properly executed, the will should have at least one provision which provides:
- The appointment of a guardian for any children who are minors, if applicable;
- The identification of any individuals who are to receive distributions and what those distributions should be;
- How any property not specifically distributed is to be disposed of; and
- The appointment of an executor. An executor oversees the disposition of the estate, including any property and debts, of the deceased individual.
What is the Purpose of a Trust?
A trust can serve many different purposes. A trust is created by an individual called a settlor. A trust is a legal interest in property. This legal interest is held by a trustee, or a trust manager.
The trustee manages the property in the trust for the benefit of the recipients of the trust. The recipients of the trust, or the individuals to whom the assets in the trust are transferred to by the trustee, are known as beneficiaries.
What is Required to Create a Trust?
In order to create a trust, there are several requirements which must be met. These include:
- A declaration in writing by the settlor that states the settlor’s intent to create the trust;
- The settlor signing over the deeds, titles, and other proofs of ownership of the settlor’s property to the trustee;
- Funding the trust with property or assets. The trust must include trust res. This is also known as the corpus or res. The trust res includes the property or assets which are placed in the trust; and
- Naming one or multiple beneficiaries.
What are Some Examples of Different Types of Trusts?
There are numerous different types of trusts which can serve many different purposes for individuals. Some of the types of trusts an individual can create include:
- A testamentary trust. This type of trust is created by including a provision in the will, directing that certain assets are to be disposed of in trust;
- A living trust. This type of trust is created while a settlor is still alive;
- An irrevocable trust. The terms of this type of trust cannot be changed or revoked;
- A revocable trust. This type of trust can be terminated by the settlor for any reason. The settlor can terminate the trust until the settlor passes away.
There are also other types of trusts which may be established for specific purposes. For example, if a settlor does not want a beneficiary to access their trust until the turn 21, they can create a spendthrift trust with a no access until 21 clause. This clause will be enforced by the trustee. Then the beneficiary turns 21, then they are entitled to their proceeds under the trust terms.
There are also other types of specialized trusts, such as pet trusts and gun trusts. A pet trust provides for the continued care of an individual’s pet. A gun trust provides for the legal transfer of a firearm to a beneficiary.
Another type of specialized trust is a charitable trust. This type of trust is formed in order to collect property or funds for the benefit of a charity.
Do I Need an Attorney if I Want to Create a Will or Trust?
It is essential to have the assistance of a will lawyer if you desire to create a will or a trust. Your lawyer can advise you regarding the different types of trusts which are available and which would best fit your situation.
Your lawyer can also help you draft all documents related to your will and trust. Having an attorney create your will and trust documents ensures that they are in compliance with local laws and will be valid when it is time to transfer property to your loved ones.