29 Estate Planning Flashcards
What is an advance directive (living will)?
A written statement detailing a person’s desires regarding their medical treatment in circumstances in which they are no longer able to express informed consent.
Advance directives guide healthcare decisions when a patient is incapacitated.
Who is a beneficiary?
A person who is granted control over an asset upon the death of its original owner.
Beneficiaries can be individuals or organizations.
What is the role of an executor?
An individual who handles the administration of an estate.
Executors ensure that the deceased’s wishes are carried out according to the will.
Define general durable power of attorney.
A document that gives a caregiver permission in advance to act as the agent of another individual on financial and property issues in the event she is unable to do so.
This document remains effective even if the individual becomes incapacitated.
What does guardianship entail?
The position of being legally responsible for the care of someone who is unable to manage their own affairs.
Guardianship can apply to minors or incapacitated adults.
What is a health care proxy?
A document with which a patient appoints an agent to legally make healthcare decisions on behalf of the patient when he or she is incapable of making and executing the healthcare decisions stipulated in the proxy.
This ensures that healthcare decisions align with the patient’s wishes.
What does intestate mean?
The condition when a person dies without a will.
Dying intestate can lead to state laws determining the distribution of assets.
Define irrevocable life insurance trust (ILIT).
A trust that eliminates the value of the insurance policy proceeds (death benefits) from the client’s taxable estate at the time of death.
ILITs are often used for estate tax planning.
What is probate?
The legal process through which a deceased person’s estate is properly distributed to heirs and designated beneficiaries and any debt owed to creditors is paid off.
Probate can be a lengthy and costly process.
What is a revocable living trust?
A trust that holds property during a person’s lifetime and allows the client to maintain control over her assets but avoid probate or conservatorship issues.
Revocable living trusts can be altered or revoked by the grantor.
What is a will?
A document by which a client can give away her assets at death in the way she wants and is appropriate for her beneficiaries.
Wills must be executed according to state laws to be valid.
