50 Terms Personal Finance Flashcards
Unhealthy Giving
Does not enhance the well-being of both the receiver and giver.
When giving is a method of gaining power over another.
UHG
Grantor
person who forms the trust and supplies the assets
GRA
Trustee
person named in the trust to administer the trust according to the terms and state trust law
TRUST
Beneficiary
the person for whose benefit the trust property is held by the trustee BEN
Intent from grantor
must have a valid legal purpose IFG
property
asses subject to the trust PROP
Specific gifts
particular item or property in an estate transferred to beneficiary on owner’s death. Specifics must be provided SG
Non-specific gifts
does not refer to specific item NSG
Residuary gifts
everything left in estate after all debts, bills and taxes have been paid and specific and non specific gifts have been distributed RG
Gifts to children
executors will keep for safekeeping gifts to children under 18 until they become of age unless will specifies guardian or parents take receipt of gift on child’s behalf GTC
Gifts to charities
Gifts left to charity in will are free from inheritance tax. GCHAR
Living trust
trust in which you assign the management of your assets to a trustee while you are living LT
Revocable Living Trust
living trust that can be dissolved RIT
Irrevocable Living trust
living trust that cannot be changed, although it can provide income to the grantor ILT
A Living Will
a document to make your family aware of the type of care you want to receive if you should become terminally ill, on life support or permanently unconscious. This document is only effective in the event you are unable to express your wishes yourself. ALW
Oral Will
spoken testaments given before witnesses. Not widely recognized from a legal perspective OW
Testamentary Will
formally prepared document signed in the presence of witnesses. TW
Holographic Will
written without the presence of witness. Rarely hold up in court. HW
Will
is a legal document by a person, the testator, that names one or more persons, executor, to manage his or her estate and provides for the distribution of property upon death. It can also identify a preferred guardian for any surviving children. W
Purpose of a Will
Ensures the estate is distributed as desired
Beneficiaries (heirs), the persons specified in will receives a part of an estate
T prevent the courts from assigning an administrator who may not carry out your wishes. POAW
Elements of a Will
A Will is a legal document designating the transfer of property and assets upon a person’s death. A Will can be written by any person of legal age and being of sound mind and memory. It ensures that your assets will be given to family members or a designated beneficiary. If you have no heirs and die without a will, the state can claim the estate. If you have young children, a will can allow you to designate a guardian in the event of your death otherwise, a court can appoint a guardian. EOAW
What is needed in a will
name and place of residence description of assets names of spouse, children and other beneficiaries alternate beneficiaries specific gifts establishment of trust if desired cancellation of debts owed to you name of executor to manage the estate name of guardian for minor children name of alternative guardian your signature witnesses' signatures WINIAW
Executing the Will
The executor files forms in probate court, provides a copy of the will, a list of assets and liabilities of deceased, pays debts and sells necessary assets. The executor typically opens a bank account for this purpose.
Probate is a legal process that declares a will valid and ensures the orderly distribution of assets. ETW
How Long Will You Live
Americans, on average, live to 77.9 years old
What are you most afraid of?
Snakes Creepy Crawlies Scary Spaces Other People Heights
Is a snake really scarier than dying?
No
Why is dying a taboo subject to talk about?
Because death is a very emotional topic
What is Estate Planning
A clear and complete plan of what should happen upon your death
WIEP
Trade-Off
A trade-off is giving up one thing for another TO
Guardianship
requires a legal document called a will G
Estate
the assets of a deceased person after all debts are paid. It is used to determine how your wealth will be allocated on or before death. The Will is used to identify a guardian for surviving children under 18 and to determine how the estate is to be distributed upon death to beneficiaries or heirs. In the event there is no will, the court appoints an administrator to make a decision on how the property is to be distributed. Estate planning is the process of planning or how your wealth will be allocated on or before your death. E
Consequences of No Planning
May need a guardianship
Medical wishes may not be carried out
State Law via a public probate process decides who receives your assests and in what proportions
Court decides who raises your minor children
Heirs may unnecessarily incur estate taxes
CONP
Estate Planning for Teens
Estate Planning for Teens
Letters are not legal documents
Letters are preferred over conversation because they have a longer presence
EPFT
Who can help with planning
Who can help with planning Other professionals as needed You & your family Financial Institutions Attorneys WCHWP
Attorneys
can provide you insights for titling documents, wills
AT
Accountants
can help you determine net worth, see tax advantages
AC
Certified Financial Planners
can help you diversify investments, protect assets
CFP
Terms you may hear while dealing with an estate
Living Will Executor Decedent Beneficiary Testator Fiduciary TYMHWDWAE
Estate planning as a gift
Teens are not too young to start The first step is honest conversation Seek out advice of professionals Final act of financial well-being EPAAG
Giving through a will or trust
can provide for the future financial security of your family and others
A will or living trust can offer
thoughtful charitable gifts as part of a long-range estate and financial plan
A tax-free gift of up to $10,000 per year
can be given without being subjected to tax for giver or receiver
A gift made through a will or living trust can
be prepared by an attorney
Gifts included in wills and living trusts
are flexible, easy to arrange, and may be changed with your life circumstances
What healthy giving do you observe in your community
People giving people stuff
Prepare for giving
Create a spending plan Evaluate needs, wants and values Assess your time Plan for expenses, such as Christmas gifts Avoid using credit for giving
Money Management Tools
Statement of Financial Position
Income & Expense Statement
Spending Plan
MMT
What other factors should be considered when deciding what and how to give to others
If you really want to give up what you are giving
Financial Statements
Assess the overall financial position to evaluate pros & cons of giving
Creates a plan for special events that involve giving
FS
Earning
Choose a career that can help you meet your giving goals
A career choice could be an ultimate form of giving
Be grateful to those that have given to your growth of human capital
EARN
