How to protect assets from being passed to a beneficiary in a will when they are likely to die soon also I'm going through the process of creating a simple (my first) last will and testament. I'm young with modest assets. I'm married with no children and live in the United States. I'd like to have something in place to make things as seamless as possible in the case of my death. My spouse will be my first beneficiary, but I will also have other family as secondary beneficiaries in the case my spouse and I die at the same time. While creating the will, I was considering the following scenario: my spouse and I are in an accident together. I die immediately, yet they live for some longer period of time (days/months). They eventually die as well. I think the question boils down to: at what point does my will go into effect and pass my assets to them? Does it have to do with their condition (conscious/unconscious, mentally competent/incompetent)? Does this change based on who is the executor of the will? It would seem a bit contrary to my wishes if I were to pass, my assets pass to my spouse, and then shortly to their second beneficiaries instead of mine, especially if it was always unlikely they'd recover. How do wills typically handle this edge case?
Wills typically handle this by specifying a survivorship period. Such a clause may say, in effect, "I leave all my assets to my spouse, provided they survive me by at least 30 days, and otherwise to beneficiaries X,Y,Z." That way, if your spouse dies shortly after you, your assets go to X,Y,Z, rather than going to your spouse and then to their beneficiaries. Another issue this avoids: suppose you are in an accident together, and by the time rescuers arrive, you are both dead. Without a survivorship period requirement, courts might have to try to determine whether one of you survived a few seconds longer than the other, in order to decide whose beneficiaries get the assets. That could be difficult and error-prone, not to mention gruesome and upsetting to loved ones. But with such a requirement, it's not necessary. The linked article notes that in many jurisdictions, if you don't specify a survivorship period, there may be a statutory period that applies automatically.
What would be an appropriate legal classification? A trust. How could this entity be structured so it could manage multiple estates? As a trust. Could this entity choose to keep, say, 30% for internal use e.g. resuscitation research? If that’s what it says in the trust deed, yes. How could this entity be made "recession-bulletproof," such that it could survive collapse of civilization? It can’t. Could it be given autonomy under the direction of a single person, or even sovereignty along the lines of a Mars colony? A trust is managed by its trustee(s) for the benefit of the beneficiaries. A trustee can be an individual or a corporation and there can be one or more of them. It couldn’t be given sovereignty - only nation states are sovereign. Could it be immune from legal jeopardy if it chose to accept clients who volunteer to be frozen before they die? No. What might happen to the estates if the economy is radically altered, e.g. a scarcity-free system where money is obsolete? Beats me - you’re the science fiction writer, you make it up.
Whether or not the estate has an obligation to pay the mortgage is really dependent on the terms of the estate plan and the solvency of the estate. The fact that someone is on the deed to a property (whether a deed of gift or a transfer on death instrument) that automatically passes upon death of the original owner to a relative has little or nothing, really, to do with the estate plan. While it may have been part of the person's ultimate plan for the disposal of their assets in life and at death, that is different than being part of the actual estate plan, which deals with the disposition of assets upon death, setting out the wishes of the deceased as it pertains to all property. There are lots of people who end up in this position, even though the original person on the deed did not intend to purchase or leave the other any property. It happens a lot when say a child does not have adequate credit to secure a mortgage to buy a home, but has the money to pay a mortgage. So, in that scenario usually a parent or grandparent will put the mortgage in their name (the other will live there and pay the mortgage) and then in the event the "helper" dies, they have it pass to the other at death, either thru a "TOD" or a "joint tenancy", so that in the event they die intestate, or if the will is challenged, there will be no question who owns the house...the equity in it, anyway. It (the instrument) is its own separate entity, not subject to the will except to the extent the deceased makes it subject (I'm getting to that part). Like a life insurance policy, that pays on death but is not subject to any terms of the will, it can stand alone since deed is its own instrument, separate from any wills or trusts. Under federal law, the mortgage must be allowed to remain in effect without changes when it passes from one person to another because of a death. This negates any due-on-sale clause in the mortgage. Who pays for the remainder of what is owed, however, generally depends on the deceased's will. The will might stipulate, for example, that the heir receive the home, free and clear, with the estate to pay all monies due. In this case, the executor will either use liquid assets, or sell other non-liquid assets in the estate to pay off the mortgage. Other times, it will say that the heir get the equity, plus X amount of dollars, which the heir can put toward the home's mortgage or not. If the will is silent on the issue, it is the responsibility of the heir/person to whom the property transfers (they needn't even be an heir) to pay the mortgage upon its normal term due, or sell the property to satisfy the debt. In the event the property is worth less than the remaining mortgage, the bank will usually take the house in "deed in lieu of foreclosure" rather than seek overage from the estate.
The personal representative is empowered by law (esp. §3311) to undertake actions on behalf of the deceased, and enjoys certain legal immunities against personal liability for their actions. The personal representative can do things that a random person off the street can't do. Until you are appointed by the Register of Wills as personal representative, you aren't a personal representative. There are provisions for limited disposition of the estate without letters of testamentary such as paying employees of the deceased, paying the funeral home, but not in general any &quot;non-emergency&quot; distribution / disposal. Even with appointment as PR, one has a fiduciary obligation to equitably distribute the estate. That means that the PR has to respect the interests of both of the heirs. If the PR decides that some object is trash and throws it out, they could be liable to an heir who has an interest in the object. Of course, the heir with that interest may have to take the PR to court, so normally people just talk this out. As an intermediate step, an heir's attorney can write a letter to the PR advising them of the legal ramifications of breaching their fiduciary duty.
The requirements for a valid will vary from jurisdiction to jurisdiction. In most U.S. states there is a two part test. One part is determined based upon the face of the document, the other is based upon extrinsic evidence. Formal Requirements To be formally valid without a hearing unless an interested party requests one in most U.S. states on its face (i.e. to be a &quot;self-proving will&quot;) a will must: Be in writing. Be signed by the person making the will who is at least eighteen years of age. Be signed by at least two witnesses who do not have conflicts of interest, who are attesting that the person making the will was competent and that they saw him or her sign it. The signatures of the witnesses must be notarized. If their statements are not notarized, usually at least one witness must testify in a hearing or with a later affidavit. The language of the will must indicate an intent to make a binding disposition of property in the estate of the person making it when they die, and other rights related to their estate and their death. Various exceptions to these requirements exist in most state (e.g. a &quot;holographic will&quot; is valid if it is in writing, indicates the necessary intent, is signed, and has its material provision substantially in the hand writing of the person writing it). Some states allow oral wills called &quot;nuncupative wills&quot; in very specific circumstances usually limited to soldiers or sailors in circumstances of actual battle or imminent mayhem likely to result in death, with the proper witnesses. A will is like a dollar bill, a copy is not as good as the original document. If the original document cannot be found it is presumed that the will was revoked by physical destruction of the will, in the absence of evidence to the contrary submitted at a hearing to a judge. Extrinsic Requirements Any interested party can contest a will that appears valid on its face under the standards describe above on several grounds. Two of these relate to the condition of the person signing the will at the time it was signed. The notarized witness statements create a presumption that these two conditions were met. But, that presumption can be overcome with other evidence from witnesses and/or documents or other kinds of evidence. These conditions are: The document was procured from the person making it with duress or undue influence, even if the person making it did have &quot;testamentary capacity.&quot; The person making it lacked testamentary capacity which is also a two part test. The first part is that the person making it knows who their family and the &quot;natural objects of their bounty are&quot;, knows in general terms what they own, and knows what a will is intended to do and is capable of understanding the general outlines of what it does. This basically rules out people with severe dementia. The second part is that if the person is not suffering from dementia but is suffering from hallucinations, that the hallucinations have not influenced the nature of the provisions contained in the will. In practice, &quot;undue influence&quot; is the predominant ground for contesting wills that are formally valid on their face because testamentary capacity is a very low standard. A will can also be contested on the grounds involving extrinsic evidence that: A later validly executed document revoked the will, or The document is a forgery. If any of the issues related to extrinsic evidence are disputed, both the party contesting the will, and the party defending it, has a right to have that issue resolved in a jury trial, although often the right to a jury trial in a case like this is waived by the parties. This is determined by making a reasonable inquiry before submitting the will and examining the physical document and the place where it was when it was discovered, closely. The inquiry should be very searching if the terms of the will are surprising, and can be fairly lax if the terms of the will are what was widely expected. There is generally a notice given to all interested parties when a will is submitted to a court with probate jurisdiction to be given effect that contains a deadline to raise a contest along these lines. A will that is not submitted to a court with probate jurisdiction usually has no force or effect until that happen in most U.S. jurisdictions. Public Policy Even if the will is valid in general, some terms of the will may be invalid as a matter of public policy, or modified by statue, in certain circumstances. These exceptions can usually be determined on the face of the document or with minimal additional information (although &quot;your mileage may vary&quot; and cases where, for example, the cause of death or date of death is uncertain can be difficult). For example, the following limitations are common: A term in a will conditioning a gift at death on marrying or not marrying a particular person is void in most, if not all, U.S. states. Under certain circumstances a will is required to leave certain minimum amounts to a surviving spouse and/or minor dependent children. If a will appears to omit a child of the person making it by accident, it is modified in particular ways mandated by statute. Will provisions making gifts at death or giving responsibilities to someone who murdered the person who wrote the will are void. Some states invalidate provisions in favor of an ex-spouse upon divorce, unless a post-divorce document reaffirms those inheritances. Certain kinds of words are given defined statutory meanings unless the express language of a will says otherwise, such as &quot;by representation&quot;, or &quot;if he survives me&quot;, that are not necessarily intuitive or in line with every day use of language. It is usually necessary to review the probate court and case law in the state where the decedent was domiciled at death to determine if these limitations apply, ideally with a probate or estate administration lawyer.
Short Answer Usually, a divorce decree doesn't leave former spouses as co-owners of the former marital residence, but sometimes this happens anyway. To oversimplify, if the divorce decree leaves a couple a co-owners, either of them can usually force the sale of the property and a division of the proceeds left after paying off the mortgage, in a special kind of lawsuit called a partition action. The rights of mortgage lenders and lienholders against both former spouses cannot be changed without paying off the loan in most cases. If a spouse who lives there isn't able to pay off the old loan and refinance it in their name alone, this usually means that the house will be sold to a third party with the net proceeds of the sale split. The net proceeds from the sale of the house are divided in proportion to their ownership interests in the co-owned property that can sometimes be tricky to calculate. Often the ability of either party to force a sale of the house in a partition action leads the parties to reach a settlement in the shadow of the possible outcome. Long Answer Caveats This answer sets forth the general rules that apply the vast majority of the time. There are some rare and obscure exceptions to these rules that can apply buried in dark corners of Texas law, and this answer doesn't not comprehensively ferret out every single such exception to the general rules. This answer also doesn't discuss ways in which outcomes that shouldn't be allowed by these rules can be made possible by one party or another's procedural mistakes in the court system, which is fact specific and can arise in certain situations. What Is A Divorce Decree? The only way a divorce case can end is for the divorce to be called off (either by mutual agreement or because one or both of the divorcing spouses die before the case is over), or for a divorce decree to be entered by the court, ending the marriage and establishing the rights of the parties after the divorce with respect to each other and their property. A divorce decree can be entered either by mutual agreement of the spouses in a divorce case, but if they can't agree, the judge in the divorce case will impose a divorce decree dividing property and handling other issues in the divorce as the divorce judge sees fit consistent with Texas law. Either way, it isn't official until it is signed by the judge. Sometimes a divorce decree will be very short, but will incorporate by reference one or more other documents like a mutually agreed separation agreement, or a parenting plan, or a schedule of who gets what property in the divorce. The Role of A Divorce Decree Almost anything can be done by mutual agreement (although all decisions related to children must be approved by the judge with a finding that the agreement is in the best interests of the children). A judge has far more limitations on what the judge can do in a divorce decree to establish the post-divorce property rights of the ex-spouses, but the judge still has great discretion in how the judge may make those decisions. Usually, the ownership of a house is handled in a way that leaves only one spouse owning the house in connection with a divorce proceeding. For example, ex-husband may be ordered to transfer the house to ex-wife, and ex-wife may be ordered to transfer her pension to ex-husband in exchange, if that is what the divorce decree says. One of the grounds for appealing a judge's divorce decree decision to a higher court is that the judge didn't adequately separate the spouses financially. But that doesn't mean that a divorce decree can never leave ex-spouses as co-owners of property. Once the divorce case is over, if nothing in the divorce decree separates ownership of the house, then the ex-husband and ex-wife have the same rights with respect to each other that a house co-owned by two people who were never married would have (unless the divorce decree states otherwise). Some divorce decrees, however, prohibit the sale or transfer of the house without the mutual consent of the former husband and former wife (for former husband and former husband, or former wife and former wife, in a same sex marriage), either indefinitely, or for some time period defined in the divorce decree. In rare cases, the divorcing spouses could agree to do something that leaves neither of them owning their house, like agreeing to sell it, or agreeing to give it to charity, or putting it in the trust for their children. The Rights Of Unmarried Co-Owners Of Property When A Divorce Decree Doesn't Provide Otherwise A lawsuit to terminate co-ownership of real estate without the consent of all of the owners of the real estate is called a partition action. In the case of a house that cannot feasibly be divided in kind the way that, for example, farmland could be, what a partition action does is force the house to be sold, with the proceeds divided. Conceivably, one spouse or the other could be both one of the two sellers, and one of the buyers at the partition sale if the spouse that is both selling and buying is the highest bidder in a sale that is open to the general public. In this case, the partition sale is functionally equivalent to cashing out the equity of a spouse who is not the highest bidder at a partition sale. Frequently, given the inevitability of an ultimate partition sale in these cases, the parties will instead reach a mutual agreement to either have one party cash out the other for an agreed valuation of the house and allocation of the equity in the house. Alternatively, another common form of settlement is that the co-owners will agree to sell the house for an agreed price to a third-party and then to divide the net proceeds either according to a pre-agreed formula or in litigation over net proceeds from the agreed sale held in a court controlled bank pending a judicial determination of each spouse's share of the proceeds. Partition actions aren't the most expensive kind of court case, but usually, at least one of the parties needs to have a lawyer for it to go smoothly and the legal fees aren't usually negligible either. Critically, the fact that &quot;mom pays mortgage and lives in the house&quot; doesn't matter much in a partition action after the divorce is over. Paying the mortgage and living in the house are frequently considered to cancel out, rather than changing the share of the equity to which each former spouse is entitled. An ex-wife cannot just get an ex-husband off of the title without being the highest bidder at a partition sale. If ex-husband is the highest bidder, he will stay on the title and she will be off the title and will have to move out or pay him rent. If the third-party is the highest bidden, she will have to move out or pay rent to the third-party, and neither of them will be on the title anymore. The Rights Of Mortgage And Lien Creditors The fact that both ex-spouses are responsible to the mortgage company (and any lienholders who have rights identical to mortgage companies for the purposes of this question) if they were both on the mortgage before the divorce can't be changed without the mortgage lenders consent (which is almost never given), unless the mortgage is paid off in full and (if necessary) refinanced. If there is a partition sale, the mortgage debt must be paid off before either spouse gets any of the proceeds from the partition sale. The Impact of Community Property Laws In Texas One complicating factor in this analysis is that Texas is a community property state. So, to determine what share of the equity in a house belongs to each spouse (if any) you have to apply community property rules that are deceptively simply, but are quite complicated to apply in practice. The general rule of community property in Texas is that property acquired before the marriage or by gift or inheritance by a single spouse, or allocated to a spouse in divorce decree, is separate property. All other property of the couple of community property. Any property for which separate property status can't be proven, or for which there is too much co-mingling of community and separate property, is community property. A spouse is entitled to 100% of the that spouse's separate property, and in addition, to 50% of the community property of the couple, upon divorce. Also, at death, a decedent can't leave the surviving spouse's separate property to someone else, can't leave the 50% of the property that is community property immediately prior to death, that is owned by the surviving spouse, to anyone other than the surviving spouse, without the surviving spouse's consent. Ideally, the divorce decree will spell out what percentage of each piece of land or other property that is owned by each former spouse once they are divorced. But, sometimes a divorce decree entered by mutual agreement, or by a judge, is sloppy and doesn't make that point clear. If the divorce decree doesn't clarify what percentage of the property is owed by each ex-spouse, this has to be cleared up later when the house is sold in a partition action, if there is no mutual agreement to the contrary. A valid pre-nuptial agreement, or a valid post-nuptial agreement, however, can modify the community property rules of Texas that would otherwise apply. The application of community property rules is also particularly complicated in cases where the couple spends part of their marriage in Texas, and part of their marriage either in a state that is not a community property state or that has very different community property laws on some key issues. The Impact Of Post-Divorce Economic Activity Related To The House Also, the amounts spent by the co-owners of the house after the divorce, and the question of whether one of the co-owner has been excluded from the co-owned house by the other, could change the share of each co-owner in the equity in the house after the divorce. The exact rules for how these adjustments are made are complicated, and are often subject to a judge's discretionary decision about this issue should be resolved in a partition action. Footnote Re Gender All of the rules discussed above, even if I haven't worded my explanations that way, are gender neutral. The rules are the same for ex-husbands as they are for ex-wives (and vice versa) in opposite sex marriages, for ex-husbands in same sex marriages, and for ex-wives in same sex marriages.
In most places I imagine the issue would go before a probate judge who would attempt to determine the validity of each presented will, and if both were valid, then they would attempt to reconcile the disparities to the best of their ability. Broadly speaking, the process would look like this (I'm using UK law as an example): You die An individual is chosen to handle your affairs (executor or administrator [or possibly both depending on jurisdiction]) They choose a will to go off of (these steps could be reversed if the wills named different administrators, in which case each administrator would file for the grant of representation and consequently involve the probate judge earlier) Someone challenges and suggests using the other will (probably because they feel they're not getting what's theirs) A probate judge is involved The probate judge decides Appeals would be made to Court of Appeals and then to the Supreme Court That being said, every jurisdiction is different, and this is more of a template answer for English common law (and derivative courts), than an attempt to describe in detail any specific jurisdiction's procedures.
It doesn't work, just like transferring the copyright to a young person to make it last longer doesn't work. In places where the length of copyright depends on the death of someone, it always depends on the death of the author. You can transfer copyright, but you can't change who is the author. If I write a book, and some copyright law says the copyright ends 70 years after the death of the author, then it ends 70 years after my death. It doesn't matter who owns the copyright. PS. That dead person has heirs. If there are no relatives alive, then the government of their country will inherit everything (in most countries, there might be exceptions). Your plan fails for that reason as well. PS. See "Just a guy's" answer for another, completely different, reason why this scheme doesn't work.