A Brief Introduction to Wills and Trusts
- Wills
- A Will is a written document that provides for the distribution of a person's assets after death. Kentucky State Law requires that the Will be signed and that the signing be witnessed by at least two people. Some states require that there be three witnesses. The witnesses must be disinterested parties; that is, they may not be persons named in the Will as heirs or beneficiaries.
- Many states, Kentucky included, allow the Will to be "self proved" at the time it is signed and witnessed. A Will can be self proving, and therefore avoid the necessity of locating one of the witnesses after death to validate the document, if additional language is added in the witness clause and all of the document's signatures are notarized.
- Kentucky State Law allows for the probate of a Will that is not witnessed only if the Will is written totally in the deceased person's own hand writing and signed by the person at the very end of the Will. However, it is generally not advisable to attempt to do a Will in this fashion. There have incidences in which the Court has not admitted a handwritten Will for Probate because the signature was not at the end of the document, or part of the verbiage was written by someone else or it was partially typed.
- Additionally, sometimes items that could be very helpful in the administration of an estate might be omitted from a hand written Will. Kentucky State Law, for example, provides that an estate can only sell real estate if the Will grants authority to the named Executor to sell real estate; otherwise, an Order must be obtained from the Court. This Order can only be obtained after notice has been given to all of the heirs/beneficiaries and a hearing has been held.
- For more information, see also: A Description of the Probate Process
- Trusts
- Trusts are contracts that are entered into between the person creating the Trust (called the Grantor, Settlor, or Trustor) and the person or legal entity that is to carry out the terms of the Trust (called the Trustee). The following are some basic types of Trusts:
- Testamentary Trust - a Trust that is part of a Will. As it is in the Will itself, it does not have any legal effect until the person has died and their Will has been approved for Probate. Just as a Will can be changed by a person up to their death, likewise the Testamentary Trust can be so changed.
- Inter Vivos Trust - also known as a "Living Trust", this is a Trust that is separate and apart from a Will. It is written as its own document. It is effective at the time it is signed. The Grantor/Settlor, however, may choose not to fund, that is put money or assets into the Trust, until a later date or at their death. If assets are properly placed in the Trust, then those assets will not have to go through Probate Court after the death of the Trustor. A Will can also provide that assets in the estate may be transferred to the Trust and administered according to the Trust's terms.
- Revocable Trust - a Trust can be "revocable" or "irrevocable". A Revocable Trust can be amended, changed, or totally dissolved at any time by the Trustor. The benefit of having a Revocable Trust is that the Trustor can make changes as situations change.
- Irrevocable Trust - an Irrevocable Trust, once signed, generally cannot be changed. There are tax planning reasons for using an Irrevocable Trust. However, a person should be cautious in entering into an Irrevocable Trust.