A beneficiary is a person or thing that receives help or an advantage from something. At least that is the definition if you look beneficiary up in the dictionary, and it is a true statement. When it comes to estate planning, the word becomes further defined. In estate planning, a beneficiary is a person (or thing) that receives the benefit of money, property or real property from a trust or estate on behalf of a Testator, Benefactor or Settlor. For example, the beneficiary of a life insurance policy is the person who receives the payment from the insurance company after the death of the insured. Or one of the beneficiaries of the estate received the decedent’s automobile.
How do you designate a Beneficiary?
A beneficiary can actually be designated in several places and that can be problematic. Beneficiaries are most commonly designated in a Will or in a Living Trust, but they can also be designated in a life insurance policy, retirement fund, investment account or bank account. The reason this can be problematic is that the information can become outdated and conflicting. For example, a Testator (the person who makes a will) may designate the Beneficiary of his life insurance policy as his second daughter in his will, but he may have previously designated the beneficiary of that policy as his first son when he took out the policy with his insurance company. In this situation it will likely be up to the probate court to determine who the true Beneficiary of the insurance policy is.
Can a Beneficiary be removed from a will or a trust?
Yes, a beneficiary can be removed from a will or trust while the Testator is still alive and while the living trust is still revocable. The term “Last Will and Testament” means the final version of a will if multiple version exist or existed. People will commonly make updates to their will as life events occur and they may choose to add or remove beneficiaries. A living trust is typically a revocable living trust while the person who created it (the Settlor or Trustor) is alive. Revocable means that they are able to make changes to the trust. Often when the creator of the living trust passes, it becomes irrevocable and changes to it can no longer be made. It should be mentioned that each state has their own laws and rules governing the validity of a will, trust or estate. In most situations if it can be proven that a person made changes to their estate planning documents when they were not of sound mind or do to coercion, those changes may not be accepted by a court.
An Executor is the individual chosen to administer the estate of a person who has passed. The Executor is usually declared by the decedent (the person who passed) in their will. If a person passes without having a will, if the will can not be validated, or the person chosen by the decedent can not act as the executor for any reason, a court will select an Executor / Administrator during the probate process.
What are the responsibilities of an Executor?
The Executor on an estate often has several important responsibilities. During the potentially lengthy probate process, the executor operates as the primary contact person for the estate. The estate Executor is responsible for completing all of the tasks required for probate to be finalized. The following is a list of some of the common duties of an estate Executor:
The estate Executor is responsible for carrying out the wishes of the decedent
Locating, collecting and maintaining the assets of the estate
Obtaining legal or professional assistance for the estate if needed
Maintaining or creating a bank account for the estate
Alerting creditor and potential heirs of the passing of the decedent
The cancelation or payment of expenses related to the decedents estate
The payment of the decedents taxes with the estate funds
The distribution of the assets to the beneficiaries once probate has concluded
Does an Executor get paid for their duties?
An Executor can be paid a reasonable fee for the work they do on behalf of the estate. Often times when the Executor is a close friend or relative of the decedent, they will choose not to request compensation for their duties. If the decedent has chosen an attorney or professional estate administrator, the courts will permit non excessive compensation providing the estate can afford the expense.
Wills and Last Will and Testaments are legal documents that provide instructions for what should happen to a person’s assets after their passing. The term “last will and testament” is used inter changeably with the term “will”. Although they both commonly refer to the same thing, to be exact, a last will and testament refers to the most recent version of a will. A last will and testament is commonly used to distribute a person property, such as real estate, possessions, cash, investments or business interests. It may also be used to appoint legal guardians for minors or people with special needs that require a guardian. If a person dies without a will, they are said to be intestate, and state intestacy laws govern the distribution of the property of the person who passed.
How to draft a Last Will and Testament
Can a person draft their own last will and testament? The simple answer is yes. A person can draft their own Last Will and Testament, but we suggest you seek the assistance of a legal professional. Estate planning can be complicated. In most situations a professional estate planner can help you avoid pitfalls and potentially allow your beneficiaries to avoid unnecessary taxes. If you prefer to draft your own will, you will want to make sure that it meets the validity requirements of the state you are a resident of. As an example, here are some of California’s Last Will and Testament requirements:
You must be of sound mind
You must be at least 18 years old
You must make your will freely and voluntarily
Your will must exists in a physical written or printed form
You must sign your will in the presence of two or more competent and disinterested witnesses, who also sign the will or last will and testament at the same time
A last will and testament is just one way of handling estate planning matters. In some cases a trust may be a better option for you. A trust may allow your beneficiaries / heirs to avoid the probate process. If you are trying to decide how to provide for the distribution of your assets or care of your children after you die or need legal assistance, you should contact a lawyer for guidance.
A will or last will and testament, is a legal document that provides instructions for what should happen to a person’s assets after his or her death. This term “last will and testament” is commonly used to mean the same thing as a “will”, but to be exact, a last will and testament refers to the most recent version of a will. A will is commonly used to distribute a personal property, real estate, investments or business interests. It may also be used to appoint legal guardians. If a person dies without a will, they are said to be intestate, and state intestacy laws govern the distribution of the property of the person who passed.
A will is just one way of handling estate planning. In some cases a trust or living trust may be a better option for you since it can allow your beneficiaries / heirs to avoid the probate process. If you are trying to decide how to provide for the distribution of your assets or care of your children after you die or need legal assistance, you should contact a lawyer for guidance.