U.S. Estate Administration Terminology Quiz

Answer: Inter vivos and Totten trusts

An inter vivos trust is a trust that is created by a person during their lifetime and is in operation immediately after it is created rather than after their death. A Totten trust is a bank deposit/account of a person's money that is in one person's name (the trustee) for the benefit of another person.

Other examples of probate property include Social Security, money damages from civil lawsuits, promissory notes, and income from the sale of a business.

Answer: Tenancy in Common

Tenancy in common is different from joint tenancy in that there are multiple owners who have interest in real or personal property, but when one of the people dies, their interest in the property can be given to another person in their will or passed to an heir (if there is no will).

Answer: escheat

Each state handles the escheat process slightly different, but generally the decedent's real property is distributed to the state where the individual is domiciled. For example, states like Maryland and Wisconsin distribute the proceeds from the real property sale to the public school/education funds of the state or county where the decedent resided.

Answer: collateral relatives/heirs

Affinity is a relationship by marriage, so spouses, in-laws, and stepchildren are considered relationships of affinity. If a person has their spouse and their in-laws in their will and then they get divorced and die before they have a chance to change their will, most likely, all gifts to those individuals in the will are considered void.

Answer: ancillary

Many may question why it is important that a decedent's real property be probated in the state where it is located. There are several benefits to having the administration process done in a state, as filing fees and taxes are frequently paid by the decedent's estate to the state involved in the probate process.

Answer: holographic; nuncupative

An ambulatory will describes all wills, in that it means that it is a will that can be changed through the testator's (decedent's) lifetime. While several states may allow a holographic will, the vast majority of U.S. states do not allow nuncupative wills because they are very hard to prove. Generally, nuncupative wills are only allowed under one (or many) of the following circumstances: imminent peril of death, mariners at sea, armed forces members in armed conflict, or if someone was in their last illness before death.

Answer: per stirpes distribution

Per capita distribution requires that all of the decedent's property be distributed equally to all of the recipient heirs. For example, if a person dies with 3 children, each child would receive 1/3 of the estate. If one of the three children died before the decedent and they had 2 children of their own, then each person would receive 1/5 of the estate. The quantity of each person's estate is affected to ensure that it is distributed "by the heads" or equally.

In per stirpes distribution, all of the property shares distributed to the heirs do not need to be equal and no one share is affected by the distribution of the others. Therefore if the same situation above existed with per stirpes distribution, the decedent's 2 children would still receive 1/3 of the estate and the deceased child's children would each receive 1/6 of the estate.

Answer: must be notarized by a notary public

Generally, a valid will must be signed and dated by the testator, attested (witnessed) by at least 2 witnesses (who also sign the will), and it must also be written, either typed or handwritten, if that is allowed in your state. All testators creating a will must be at least 18 years old and have to be of sound mind, also referred to as having 'testamentary capacity.' A will is only required to be notarized if it is a 'self-proving' will, which means that there is an affidavit at the end of the will that is notarized, and thus 'proves' the will as being valid and would not require probate.

Answer: strawman

An executor/executrix is a person appointed by the decedent, in their will, to execute a decedent's estate, whereas an administrator/administratrix is a person appointed by the court to administer a decedent's estate if they died without a will. The remainderman is a person entitled to a future fee simple estate after a life estate expires.

Answer: fee simple/fee simple absolute

A freehold estate involves a person's right to the title of a specific piece of land/real property for an undetermined period of time. The two most predominant types of estates included as freehold estates are a fee simple/fee simple absolute estate and a life estate. On the contrary, a leasehold estate involves an estate whereby the rights of ownership are divided between multiple individuals and the duration of their ownership is for a set period of time.