Definiton: UWO in a Trust or Will

Probate and UWO Trusts

Last will and testament
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"UWO" or "U/W/O" trust, is an  acronym stands for "under will of." It's an abbreviation used to identify an interest in an asset or property created under the terms of a last will and testament. It might identify a specific bequest of personal property or money or more commonly a testamentary trust that is established under the terms of a last will and testament.

A "U/W/O" notation clearly identifies an ownership interest as being created under the terms of a will as opposed to the terms of a revocable or irrevocable living trust.

It indicates that another document -- the will -- exists, explaining the specifications of the interest.

Examples of "UWO" 

Here are two circumstances under which you might encounter a "UWO" designation. 

  • A trust agreement might read: "Jane Doe Credit Shelter Trust u/w/o John Doe." This refers to the "B" Trust of an AB trust estate plan which has been established for the benefit of Jane Doe under the terms of John Doe's last will and testament. It indicates that the shelter trust exists because of the terms of John's will. 

An AB trust is one formed by spouses to get the most from available federal estate tax exemptions. Each spouse leaves his or her property to an irrevocable trust -- A or B. The assets are not subject to estate tax when the first spouse dies, nor are they taxable when the second spouse dies and ultimately transfers them to other beneficiaries. The property can be used for the benefit of the surviving spouse during her lifetime, but she does not technically own it.

 

  • Another example is "Jane Doe Generation-Skipping Trust u/w/o John Doe." It refers to a trust that is exempt from generation-skipping transfer taxes, established for the benefit of Jane Doe under the terms of John Doe's last will and testament.

A generation-skipping trust transfers assets to grandchildren rather than to the trustmaker's children, another means of avoiding estate taxation.

Both of these trusts involve complicated rules that are best explained by an estate planning attorney, and both are testamentary trusts. 

Testamentary Trusts 

A testamentary trust is created when the testator -- the person making the will -- directs within his will that wants some or all of his property to move into one or more trusts at his death. The trust does not exist until the executor or personal representative of his estate forms it according to the wishes contained in his will. The assets are still subject to probate, which is avoided when a decedent's property is placed within a living trust without this intermediate step. Probate is required to transfer the property from the decedent's ownership into the ownership of the trust after his death. 

NOTE: State and local laws change frequently, and the above information may not reflect the most recent changes. Please consult with an attorney for current legal advice. The information contained in this article is not legal advice, and is not a substitute for legal advice.