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Wills are an essential part of estate planning, leaving instructions for how to distribute your assets and possessions after you die. Trusts are a common tool in estate planning as well, serving ...
Ademption by satisfaction, also known as satisfaction of legacies, is a common law doctrine that determines the disposition of property under a will when the testator has made lifetime gifts to beneficiaries named in the will.
The rule against perpetuities serves a number of purposes. First, English courts have long recognized that allowing owners to attach long-lasting contingencies to their property harms the ability of future generations to freely buy and sell the property, since few people would be willing to buy property that had unresolved issues regarding its ownership hanging over it.
Many trusts allow for additional deposits (cash, securities, real estate, etc.) at the direction of the settlor or others, provided the trustee is willing to accept those assets. It can even be funded after death by a "pour-over" provision in the grantor's last will, specifying his or her intent to transfer property from the estate to a trust.
For many families, a living trust can streamline the process of transferring wealth after you die by eliminating probate and minimizing estate taxes. Check Out: The 50 Happiest States in America ...
Wills also sometimes name a charity for a bequest without having money in the estate to cover the gift. That risks having money taken from heirs' portion to cover the gift.
After executing a trust agreement, the settlor should ensure that all assets are properly re-registered in the name of the living trust. If assets (especially higher value assets and real estate) remain outside of a trust, then a probate proceeding may be necessary to transfer the asset to the trust upon the death of the testator.
The cost of the trust may be 1% of the estate per year versus the one-time probate cost of 1 to 4% for probate, which applies whether or not there is a drafted will. Unlike trusts, wills must be signed by two to three witnesses, the number depending on the law of the jurisdiction in which the will is executed.