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The term "testacy" refers to a situation where a person dies with a valid will in place. In most jurisdictions, a person has the right to determine how he or she wishes his or her assets to be distributed upon death. The legal process that accomplishes this goal is testacy. The precise rules for what constitutes a valid will and how a will is handled upon the death of the decedent will vary by jurisdiction.
Within the United States, the rules for testacy will vary somewhat from one state to another. In general, in order for a last will and testament to be valid, the testator, or person who created the will, must be over the age of 18, of sound mind and not subject to undue influence or fraud in the making of the will. In addition, most jurisdictions require a valid will to be properly witnessed. In some jurisdictions, at least one witness must be someone who is not a beneficiary under the terms of the will. If an heir, beneficiary, or other interested person questions the validity of the will, he or she may often contest the will. If a court declares the will invalid, then the rules of intestate succession will determine who inherits.
Testacy provides a legal mechanism for determining who will receive the assets of a decedent's estate upon his or her death; however, in most jurisdictions the will must pass through a legal process known as probate before the assets can be passed down to the beneficiaries. Probate requires the assets of the estate to be inventoried, creditors paid, and then distribution to the beneficiaries under the will. In some jurisdictions, there is a mechanism by which small estates can be distributed without the costly and lengthy probate process through a small estate administration or other similar procedure.
An heir is someone who is entitled to inherit under the laws of intestate succession. A beneficiary is someone who inherits through a will. An heir may also be a beneficiary, but does not have to be.
The opposite of testacy, is intestacy. When a person dies without a will, the assets of the estate are distributed through the laws of intestate succession. Each jurisdiction decides its own intestate succession rules, which will include distributing the assets to the legal heirs of the decedent. Any assets that are not distributed through intestate succession escheat, or revert, to the state in most jurisdictions.