The law of trusts and estates is generally considered the body of law Law is a system of rules, usually enforced through a set of institutions. It shapes politics, economics and society in numerous ways and serves as a primary social mediator of relations between people. Contract law regulates everything from buying a bus ticket to trading on derivatives markets. Property law defines rights and obligations related which governs the management of personal affairs and the disposition The terms dispositional belief and occurrent belief refer, in the former case, to a belief that is held in the mind but not currently being considered, and in the latter case, to a belief that is currently being considered by the mind of property Property is any physical or intangible entity that is owned by a person or jointly by a group of persons. Depending on the nature of the property, an owner of property has the right to consume, sell, rent, mortgage, transfer, exchange or destroy their property, and/or to exclude others from doing these things. Important widely-recognized types of of an individual in anticipation of the event of such person's incapacity The capacity of both natural and legal persons determines whether they may make binding amendments to their rights, duties and obligations, such as getting married or merging, entering into contracts, making gifts, or writing a valid will. Capacity is an aspect of status and both are defined by a person's personal law: or death Death is the termination of the biological functions that define a living organism. It refers both to a particular event and to the condition that results thereby. The true nature of the latter has, for millennia, been a central concern of the world's religious traditions and of philosophical enquiry. Belief in some kind of afterlife or rebirth is, also known as the law of successions in civil law Civil law is a legal system inspired by Roman law, the primary feature of which is that laws are written into a collection, codified, and not determined, as in common law, by judges. Conceptually, it is the group of legal ideas and systems ultimately derived from the Code of Justinian, but heavily overlaid by Germanic, ecclesiastical, feudal, and. Its techniques are also used to fulfil the wishes of philanthropic bequests or gifts through the creation, maintenance and supervision of charitable trusts A charitable trust is an irrevocable trust established for charitable purposes, and is a more specific term than "charitable organisation".
In some jurisdictions, such as the United States, it can overlap with the area that has come to be known as elder law Other issues found under the umbrella of elder law include such areas as estate planning; wills; trusts; guardianships; protection against elder abuse, neglect, and fraud; end-of-life planning; all levels of disability and medical care; retirement planning; Social Security benefits; Medicare and Medicaid coverage; Medicaid planning ; consumer that deals not only with estate planning but other issues that face the elderly, such as home care, long term care insurance or social security or disability benefits. There may also be overlap with areas of the law touching on End-of-life issues, not solely for the elderly, but also persons with HIV/AIDS, or other terminal conditions.
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What is an estate?
At common law Common law is law developed by judges through decisions of courts and similar tribunals , rather than through legislative statutes or executive branch action. A "common law system" is a legal system that gives great precedential weight to common law, on the principle that it is unfair to treat similar facts differently on different, an estate An estate is the net worth of a person at any point in time. It is the sum of a person's assets - legal rights, interests and entitlements to property of any kind - less all liabilities at that time. The issue is of special legal significance on a question of bankruptcy and death of the person consisted of the tangible In criminal law, one of the elements of an offense of larceny is that the stolen property must be tangible assets In financial accounting, assets are economic resources owned by business or company. Anything tangible or intangible that one possesses, usually considered as applicable to the payment of one's debts is considered an asset. Simplistically stated, assets are things of value that can be readily converted into cash . The balance sheet of a firm of real Real property and personal property are the main classifications of property in the common law. Real property refers to land and the improvements made by human efforts—buildings, machinery, the acquisition of various property rights, and the like. Real property is also termed realty, real estate, and immovable property and personal property Personal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any property that can be moved from one location to which belong to a natural person. More recently, the concept of an estate has been expanded[who?] to encompass any thing of value to which the deceased person was or might have been entitled to claim during his or her lifetime.[clarification needed] The property of the estate must either be bequeathed through a will or transferred through the laws of intestacy Intestacy is the condition of the estate of a person who dies owning property greater than the sum of his enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies to part of the estate, the remaining estate forms the " if there is no will. A will A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his estate and provides for the transfer of his property at death. For the devolution of property not disposed of by will, see inheritance and intestacy is the most commonly used legal instrument for the distribution of the property of a deceased person. Before property can be disposed of pursuant to the terms of a will, the will must be submitted to a probate Probate is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person's property under the valid will. A surrogate court decides the validity of a testator's will. A probate interprets the instructions of the deceased, decides the executor as the personal representative of the court A court is a body, often a governmental institution, with the authority to adjudicate legal disputes and dispense civil, criminal, or administrative justice in accordance with rules of law. In common law and civil law states, courts are the central means for dispute resolution, and it is generally understood that all persons have an ability to having jurisdiction Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility of the estate of the deceased. Probate is often considered a relatively lengthy and expensive process, albeit one which may provide greater safeguards with regard to the rights of a deceased person's beneficiaries, though probate often is contested by creditors or disgruntled members of the family of the deceased who feel they have not received their fair share of the deceased's property.
Uses of trusts
Main article: Trust law In common law legal systems, a trust is an arrangement whereby property is managed by one person (or persons, or organizations) for the benefit of another. A trust is created by a settlor (or feoffor to uses), who entrusts some or all of their property to people of their choice (the trustees or feoffee to uses). The trustees hold legal title toIn order to expedite the process of transferring assets to intended beneficiaries, some people choose to arrange their property so that it can bypass the probate process upon their deaths. For example, placing property into a trust In common law legal systems, a trust is an arrangement whereby property is managed by one person (or persons, or organizations) for the benefit of another. A trust is created by a settlor (or feoffor to uses), who entrusts some or all of their property to people of their choice (the trustees or feoffee to uses). The trustees hold legal title to before death (as opposed to a testamentary trust) will often allow the accomplishment of the objectives of property distribution without coming under the jurisdiction of a court and the possible redistribution after a lengthy contested probate process and trial. Similarly, jointly held property (in common law systems), life insurance Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated, annuities A life annuity is a financial contract in the form of an insurance product according to which a seller —typically a financial institution such as a life insurance company—makes a series of payments in the future to the buyer (annuitant) in exchange for the immediate payment of a lumpsum (single-payment annuity) or a series of regular payments (, US Tax Code The Internal Revenue Code is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes and statutory excise taxes. The Internal Revenue Code is published as Title 26 of the United States Code (USC), and section 401(k) In the United States of America, a 401 retirement savings plan allows a worker to save for retirement and have the savings invested while deferring current income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of his or her wages paid directly, or "deferred," into his or her 401(k) account Retirement Plans or Individual Retirement Accounts An Individual Retirement Arrangement is a retirement plan account that provides some tax advantages for retirement savings in the United States (also known as Registered Retirement Savings Plans A Registered Retirement Savings Plan or RRSP is an account that provides tax benefits for saving for retirement in Canada. RRSP refers to a provision in the Income Tax Act that allows a person to shelter financial property from income taxes in Canada Canada is a country occupying most of northern North America, extending from the Atlantic Ocean in the east to the Pacific Ocean in the west and northward into the Arctic Ocean. It is the world's second largest country by total area and its common border with the United States to the south and northwest is the longest in the world) will also avoid probate as these devices allow property to transfer to beneficiaries outside the probate process.
Special needs trusts A special needs trust is created to ensure that beneficiaries who are disabled or mentally ill can enjoy the use of property which is intended to be held for their benefit. In addition to personal planning reasons for such a trust there may be fiscal advantages to the use of a trust. Such trusts may also avoid beneficiaries losing access to are created to ensure that beneficiaries who are developmentally disabled The term first appeared in U.S. law in 1970, when Congress used the term to describe the population of individuals who had historically been placed in state institutions, in its effort to improve conditions in these dehumanizing facilities . The law has since been amended many times, and now calls for the full community inclusion and self- or mentally ill A mental disorder or mental illness is a psychological or behavioral pattern that occurs in an individual and is thought to cause distress or disability that is not expected as part of normal development or culture. The recognition and understanding of mental disorders has changed over time and across cultures. Definitions, assessments, and can receive inheritances without losing access to essential government benefits.
Use of estates and trusts
Another major factor in trusts and estates law may be to minimize one's tax exposure. After an applicable exempt amount, the United States federal estate tax The estate tax in the United States is a tax imposed on the transfer of the "taxable estate" of a deceased person, whether such property is transferred via a will or according to the state laws of intestacy. The estate tax is one part of the Unified Gift and Estate Tax system in the United States. The other part of the system, the gift very quickly approaches 50% of one's taxable estate. The proper use of trusts may reduce one's tax burden. The applicable exempt amount is currently two million dollars in 2006. The exempt amount is scheduled to increase to three and a half million in 2009, after which the estate tax is temporarily repealed for one year in 2010. The year after, the estate tax is scheduled to be reinstated, with the previous exemption of one million dollars.
Trusts may also allow people a certain limited amount of control of how the amount held by the trust is handled. For example, one could leave money for somebody who may not be mature enough to handle money, and state that the money can only be used for health, education, support and maintenance of that person until the age of 35, upon which time the remaining income and principal will be distributed. One can also distribute one's assets to charitable purposes by creating an irrevocable charitable trust that may distribute the principal or the income of the trust much in the same manner as a private foundation A foundation is a legal categorization of nonprofit organizations. Foundations may also and often have charitable purposes. This type of nonprofit organization may either donate funds and support to other organizations, or provide the sole source of funding for their own charitable activities.
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See also
- Estate planning Estate planning is the process of anticipating and arranging for the disposal of an estate. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children and beneficiaries in incapacity
- Trusts & Estates Trusts & Estates is a wealth management journal published by Penton Media. It was first published in 1904 under the direction of Christian A. Luhnow, who was the editor, publisher and owner of the magazine at the time
Categories: Property law | Wills and trusts
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