Will Substitutes

Question 1

What are the Main Will Substitutes?

Answer 1

1) Life Insurance — Most widely used will substitute. Life insurance is a contract; thus, the disposition of the policy’s proceeds is governed by the terms of the contract.

2) Joint Tenancies or Tenancies by the Entirety

3) Inter Vivos Trusts — Trusts created during the settlor’s lifetime

4) Bank Arrangements

• Totten Trusts: A “Totten trust” is a deposit of money in the depositor’s own bank account in trust for another person. The majority rule is that such a transfer creates a valid revocable trust, even though the depositor retains complete control over the account during her lifetime and the transfer is complete only upon her death.
• Joint or Survivor Accounts: A bank account deposit in the name of two or more persons “with right of survivorship” is generally effective to give the survivor the absolute right to all of the money.

5) Payable on Death Designations: Bank accounts and corporate securities may be held in “payable on death” form, so the property passes to the designated person upon the owner’s death

6) Deeds — Deeds that only become effective upon the grantor’s death may be a valid nontestamentary transfer by construing the deed as a present transfer of a future interest, subject to a life estate in the grantor.

7) Contracts

8) Inter Vivos Gifts — including gifts causa mortis (gifts made in contemplation of death)