Estate Planning for the CP Exam

Estate planning is a significant content area on the NALA Certified Paralegal exam. Paralegals in estate planning practices draft wills and trust documents, assist with probate proceedings, and help clients plan for the distribution of their assets. This guide covers the key concepts you need to master.

Types of Wills

A will is a legal document that directs how a person's property should be distributed after death. The person making the will is called the testator (or testatrix). Several types of wills exist:

Attested (Formal) Will: A written will signed by the testator in the presence of witnesses (typically two). This is the most common and legally secure type of will.
Holographic Will: A will written entirely in the testator's handwriting, signed by the testator, but not witnessed. Recognized in about half of U.S. states.
Nuncupative (Oral) Will: A will spoken aloud, usually in the presence of witnesses. Very few states recognize these, and they are typically limited to personal property of small value or deathbed situations.
Self-Proving Will: An attested will accompanied by an affidavit signed by the witnesses, which eliminates the need for witnesses to testify in court during probate

Requirements for a Valid Will

For a will to be valid, the testator must:

Have Testamentary Capacity: The testator must be of legal age (18 in most states) and of sound mind. Sound mind means the testator understands (1) the nature and extent of their property, (2) the natural objects of their bounty (who would normally inherit), (3) the nature of the testamentary act, and (4) how these elements relate to form a plan for disposition.
Act with Testamentary Intent: The testator must intend the document to be their will
Comply with Formalities: The will must be in writing, signed by the testator, and witnessed as required by state law
Be Free from Undue Influence: The will must reflect the testator's own wishes, not those imposed by someone in a position of trust or authority

Codicils and Revocation

A codicil is a supplement to an existing will that modifies, adds to, or revokes provisions of the will. A codicil must be executed with the same formalities as a will.

A will may be revoked by:

Subsequent Will or Codicil: A later will that expressly revokes the earlier will, or that is inconsistent with it
Physical Act: Burning, tearing, canceling, or destroying the will with the intent to revoke
Operation of Law: Marriage, divorce, or the birth of a child may revoke or partially revoke a will in some states

Intestate Succession

When a person dies without a valid will (intestate), their property is distributed according to the state's intestacy statute. While specific rules vary by state, the general pattern is:

Surviving Spouse: Typically receives a significant share, often the entire estate if there are no children, or a portion of the estate if there are children
Children: Share equally in the estate or the portion not going to the surviving spouse
Parents: Inherit if there is no surviving spouse or children
Siblings: Inherit if there are no surviving spouse, children, or parents
Extended Family: More distant relatives inherit in a defined order if closer relatives do not survive
Escheat: If no heirs can be found, the property goes to the state

Key concepts in intestacy include per stirpes distribution (descendants take the share of their predeceased ancestor) and per capita distribution (all members of a generation share equally).

Trusts

A trust is a fiduciary arrangement in which one party (the trustee) holds property for the benefit of another (the beneficiary). Key trust concepts include:

Settlor/Grantor: The person who creates the trust
Trustee: The person or entity that manages the trust property according to the trust terms
Beneficiary: The person or entity for whose benefit the trust is managed
Trust Corpus/Res: The property held in trust

Types of Trusts

Revocable Living Trust: Created during the settlor's lifetime and can be modified or revoked at any time. Avoids probate but does not provide tax benefits. Property passes to beneficiaries outside the probate process.
Irrevocable Trust: Cannot be modified or revoked once created (with limited exceptions). May provide estate tax benefits because the property is removed from the settlor's estate.
Testamentary Trust: Created by a will and takes effect upon the testator's death. Subject to probate.
Special Needs Trust: Designed to provide for a disabled beneficiary without disqualifying them from government benefits
Spendthrift Trust: Prevents beneficiaries from assigning their interest and protects trust assets from the beneficiaries' creditors

The Probate Process

Probate is the court-supervised process of administering a decedent's estate. The basic steps include:

Filing the will with the probate court
Appointing the personal representative (executor if named in the will, administrator if not)
Notifying creditors and beneficiaries
Inventorying and appraising estate assets
Paying debts, taxes, and administrative expenses
Distributing remaining assets to beneficiaries
Filing a final accounting with the court

Study Estate Planning for the CP Exam

Estate planning questions on the CP exam test your understanding of will requirements, trust structures, and the probate process. Our flashcard system includes dedicated cards for each concept. Sign up free to start studying.

Estate Planning Basics: Wills, Trusts, and Intestacy