Final answer:
Disposition of property in the context of estate planning refers to A) 'The distribution of residual assets after specific gifts have been made.' Intestate laws dictate asset distribution if no will is present. Trusts are used to manage and transfer assets privately.
Step-by-step explanation:
The student's question pertains to the aspect of disposition of property when referring to a will or trust. The most accurate option from the provided choices is A) 'The distribution of residual assets after specific gifts have been made.' This involves the remaining assets after explicitly listed or specific gifts in the will or trust are distributed to the beneficiaries. The process deals with what is left of the estate once all specific bequests, debts, taxes, and administrative expenses have been paid.
When someone passes away without a will, a situation known as intestate, state laws dictate how their assets will be distributed. The intestacy laws take a hierarchical approach, typically funneling assets first to spouses, then children, parents, siblings, and so on. The court's involvement in the distribution of assets is necessary to manage the process according to state law.
Another important estate planning tool is a trust, which privately transfers assets to heirs outside of probate court. Trustees manage and execute the terms of a trust as per the instructions of the deceased, often making the trust irrevocable upon death.