• Presbyterian Church ( U.S.A.) Foundation
• Foundation Publications
• Law of Trusts, Wills, Estates, and Gifts
• Trusts
• Trustee Duties
• Charitable Trusts
• Wills
• Revoking, Renouncing and Amending Wills
• Abatement and Ademption
• Nontraditional Wills
• Probate
• Personal and Real Property — Gifts
• Charitable Deductions
• Gift Restrictions and Encumbrance

Inter vivos, or living trusts are those trusts, established by individuals during their lifetime that take effect prior to their death. Trusts created during the settlor's lifetime may be an irrevocable trust when the settlor has no power to revoke the trust or a revocable trust in which the settlor has retained the power to change or revoke the trust. Settlors wishing to pass a property interest to a trustee and beneficiary at the settlor's death may also do so in a duly executed will. Such trusts are known as testamentary trusts. Testamentary trusts are revocable by the creation of a subsequent will revoking the will in which the trust is created. This revocability is because such a trust is not considered operative until the settlor dies.

There is no requirement that a settlor receive consideration for the creation of a trust. However, a promise to create a trust is governed by the law of contracts. This promise may be enforced against the promisor if the promisor received consideration for making the promise. In evaluating any trust it is necessary to determine whether a trust has actually been created by an individual or whether that individual simply promised to create a trust. If a promise were made, a further investigation should be made to determine whether there was consideration for the promise.

1. To follow the settlor's directions about the administration of the trust and the distribution of the trust income to the beneficiaries.
2. To act with prudence and care in administration of the trust assets.
3. To act with a high degree of loyalty to the interests of the beneficiary or beneficiaries.

Churches are often designated as beneficiaries of trusts rather than as trustees. As beneficiaries, churches are entitled to hold the trustees accountable for their actions and may bring a cause of action against the trustees should the trustees act in a disloyal or careless manner contrary to their duties of care and loyalty to the beneficiaries.

As stated above, trusts may be irrevocable or revocable. In the case of an inter vivos trust, the settlor may retain a power of revocation in the trust. The duration of the trust is determined by the terms of the trust instrument. It can be a specific term of years, the lifetime of a named individual, or whenever the purposes intended by the settlor to be accomplished by the trust are completed. Neither the death of the trustee nor of a beneficiary terminates a trust unless their lifetimes are the measure of the duration of the trust. Where a trust is created to fulfill a specific purpose, the interested parties generally petition the court for a decree of termination of the trust when the purpose of the trust has been fulfilled. A decree of termination also may be obtained should the beneficiary acquire legal title to the trust assets from the trustee or her successors. In any case, the courts look first to the trust instrument to determine that the intentions and desires of the settlor have been followed before granting a termination decree.

If the purposes of a charitable trust cannot be carried out by designation of the funds to the organization named in the trust, perhaps due to the dissolution of that organization or the impossibility of fulfilling the direction, the courts will apply the cy pres doctrine, which calls for fulfillment of the purpose of the settlor of the charitable trust as nearly as possible by designating a similar beneficiary or similar charitable purpose.

Acceptance of trustee responsibilities, assets, and/or income should be undertaken only after thorough examination by legal counsel of all relevant documents. Each trust is unique, and trust restrictions and other legal requirements should be examined carefully with the assistance of a competent legal adviser. Informed decisions about acceptance of trust income or responsibilities require assessment of the benefits of acceptance against the costs of trust administration in accordance with the settlor's wishes.

All jurisdictions have enacted statutes that require compliance with certain f ormalities if a will is to be valid. The purpose of these formalities is to provide clear evidence of the testator's intent, as well as to prevent fraud. The following are the typical required formalities:

1. A valid will must be in writing. The only exceptions are oral wills of personal property made as a dying declaration or oral wills by soldiers and sailors. A memorandum may be incorporated in a will by reference with the existence of the following conditions: (a) it must be written; (b) it must be in existence upon execution of the will; (c) it must be adequately described in the will; (d) it must be described in the will as being in existence. Simply stated, a memorandum can be used to further define and ascertain beneficiaries previously named in the will, but it cannot be used to name beneficiaries not previously named in the will.
2. Wills must be signed by the testator and executed in accordance with local law. Signatures should appear at the end of the will after all provisions.
3. A written will must be attested by witnesses as required by state statute. It is considered sound practice to have one more witness attest a will than the number required by law. The function of the witnesses is to attest to the testator's requisite intent and capacity. It is imperative that the testator sign first and in the physical presence of all of the witnesses; witnesses should subsequently sign in the presence of each other. (Some states allow unsigned, handwritten wills also known as holographic wills. While such wills may be valid within certain states, this practice is not ideal.)

1. Disqualification as witnesses of those witnesses who are beneficiaries under the terms of the will (which could invalidate the will if not enough qualified witnesses attested it); or
2. Voiding the share of the interested witness under the will (or converting the share to that which may have passed to the beneficiary without a will pursuant to state law), thereby making him a disinterested and qualified witness. Any person may be named as executor of the will and may serve as witness. The attorney who drew up the will also may serve as witness. If a church is named as beneficiary, members generally are not considered to be interested so as to be disqualified as a witness. In the interest of caution, however, it is recommended that no witnesses have a connection with the beneficiary institution.

1. Deliberate destruction or alteration of the will; no substitutions or additional bequests are effective without re-execution and re-attestation.
2. A first will may be revoked only to the extent that a second will is inconsistent with the first. A declaration in the second will that all former wills are revoked will serve to revoke all former wills completely. In some jurisdictions, a statement to this effect in a subsequent document, though the document does not meet the requirements of a will, is sufficient to sustain the revocation of a former will.
3. A rule of law also may revoke a will; that is, a marriage generally revokes portions of a will executed prior to the marriage due to the common law provisions for surviving spouses and children.
4. Children born after the execution of a will may revoke the will so far as the after-born child is concerned. Such a child is entitled to receive the portion of the estate to which he or she would be entitled had the testator died without a will.
5. A surviving spouse, according to most statutes, retains the right to renounce the will and elect the option of receiving a statutory interest in a decedent's estate instead of under the will. The right to renounce a will is absolute: upon renunciation, the law determines the share of the estate awarded to the spouse and beneficiaries.
6. Changes in a will may be accomplished by use of written amendments (known as codicils) that may explain, qualify, alter, revoke, delete, or add to certain provisions in a will. For purposes of determining the intent of the testator, codicils and the will are regarded as a single instrument. Codicils must be prepared, executed, and witnessed according to the formalities required for a valid will to be considered valid portions of the will.

Ademption occurs when a testator fails to change a will containing provisions that have been rendered impossible of performance owing to altered circumstances. For example, the testator in a will leaves a piano to A but sells the piano before she dies. Disputes may arise over whether A is entitled to anything in this circumstance. In general, A's interests and the bequest are considered to have been adeemed or canceled by the testator's action.

1. Nuncupative wills are oral declarations made before witnesses without writing and in contemplation of death. If authorized by state law, they will be valid only if made in contemplation of death with intent to make a will.
2. Holographic wills are written in the handwriting of the testator: these wills may not require attestation, providing they are written in strict compliance with statutory provisions covering such wills. These provisions exist in only a few states. This is not an ideal manner to create a will. It is recommended that wills be prepared by legal counsel to ensure they meet statutory provisions and will thereby carry out the testator's intentions.

1. Determination of existence of a will
2. Approval or appointment of an executor or administrator by the court
3. Posting of bond, if required, by the executor or administrator
4. Proof of will in court by witnesses; succeeded by a decree admitting the will into probate
5. Proof of heirship
6. Issuance of letters of administration; filing of estate inventory by executor or administrator
7. Publishing of notices regarding proof of claims, opening of bank accounts for the estate, settlement of financial obligations, that is, collection of assets, payment of debts and taxes, and disbursement of the remainder
8. Settlement of the "widow's share" (that amount determined by state law to be given to the surviving spouse as an alternative, if the spouse so chooses, to the provisions of the will)
9. Winding up receipts on distribution, distribution of assets, approval and filing of final inventory.