§ 28.01 Death and Property [454]

 

At death, the property of the decedent is transferred according to the terms of his will, which may create a trust effective at death.  If there is no will, the property will either (1) be distributed to his family members as determined by state law or, if none exist, (2) escheat to the state.

 

§ 28.02 The Will [454-457]

 

                        [A]       Nature of the Will

 

The will is a written instrument, effective only upon death, by which an owner disposes of property.  The person making the will is called a testator (if male) or a testatrix (if female). The transfer of real property by will is known as a devise, and the recipient is a devisee.  In contrast, the transfer of personal property by will is known as a legacy, and the recipient is a legatee.

 

                        [B]       Will Formalities

 

In general, a will is effective if it is (1) in writing and (2) signed by the testator at the end, (3) in the presence of two witnesses who themselves sign the will to attest to its execution.  An exception to these requirements is the holographic will—one entirely in the handwriting of the testator—which is valid in most states without witnesses.

 

§ 28.03 The Trust [457-463]

 

                        [A]       Nature of the Trust

 

The trust involves a special fiduciary relationship in which one or more persons (the trustees) manage property on behalf of others (the beneficiaries); the person creating the trust is called the settlor or trustor.  The trustee holds legal title to the trust property, while the beneficiaries hold equitable title.

 

                        [B]       Trust Formalities

 

The testamentary trust is created as part of a will and takes effect at the death of the settlor. In order to create this type of trust, the settlor must execute a writing that (1) shows the intention to form a trust, (2) identifies the trust property, and (3) complies with the formalities required for a valid will.  In contrast, the inter vivos trust (or living trust) takes effect during the life of the settlor.  To create such a trust, the settlor must either (1) declare himself to be the trustee of property for a particular beneficiary or (2) transfer property in trust to a third person as trustee for the beneficiary.  A written instrument is required to create an effective living trust as to land, but an oral trust is valid as to personal property.

 

§ 28.04 Intestate Succession [463-466]

 

Many Americans die intestate—without a valid will—and their property is distributed according to the state law of intestate succession.  In general, the decedent’s property is transferred to the closest living relatives, with a strong preference for the surviving spouse and issue (lineal descendants of the decedent, such as children, grandchildren, etc.).  If the decedent leaves no spouse or issue, the estate goes to the surviving parents or other ancestors.  Where no spouse, issue, or ancestors survive, the estate goes to collaterals (other blood relatives of the decedent, e.g., siblings).

 

§ 28.05 Escheat [466]

 

If one dies intestate without heirs, his estate passes to the state in which the property is located; this process is called escheat.