CFP Flashcards
Money Scripts
Avoid Vigilant Worship Status
Contract Requirements (Insurance)
CLOAC
Consideration
(both receive value)
Legal
(transaction not illegal)
Offer/Acceptance
(2 parties,1 offer,1 accept)
Competent parties
(Intoxication/Minors)
Law of Agency (Insurance)
Express
written
Implied
ads, office sign, etc (actual)
Apparent
terminated agent still active
with company material they
didn’t confiscate
Exceptions to Registering as an Investment Advisor
BING
Banks
(don’t provide invest advice)
Incidental
Law,Acct,Teach,noncommish
Newspaper
Bona Fide
Govt
(only advises on treasury)
Securities Act 1934
SEC NOT ‘33
Created the SEC and regulated SECondary Markets
FOMC Open Market Operations
Repos are Easy Money
Elements of Insurance
LASH
Losses
Measurable and Defined
Accidental
Fortuitous events caused loss
Survivable
Non-Catastrophic to Insurers
Homogenous
Units of Risk
Reduce Risk
R TARD
Retain
Low Frequency, Low Losses
Transfer
Low Frequency, High Losses
Avoid
High Frequency, High Losses
Reduce
Diversify
Parts of Insurance Contract
DICED
Declaration
Facts: Whom & what covered
Definitions
Explanation: Key terms
Insuring Agreements
Basic promises of insurer
Conditions
Spells out
Exclusions
Types of Nuisances
SAVANT
Strict Liability
Liability for Product
Absolute Liability
Worker Comp
Vicarious Liability
Respondeat Superior
Principal liable for agent(s)
Attractive Nuisance
No fence on pool
Negligence per se
per statute
T
Because SAVAN is not a word
Types of Defenses
Contributory
Unsafe, drunk, jaywalker
Assumptive
Assume risk in skiing, etc
Last Clear Chance
Negligent: oppty to avoid
Comparative
80% on Party A / 20% on B
PP Coverage Exclusions
RAM
Renters
Their stuff or in place that is
regularly held for rental
Animals
Pets, fish, etc
Motorized Vehicles
Coverage needs endorsement
Broad Perils
FARF
Freezing
Artificial Electricity Generation
Rupture of systems
Falling Objects
Homeowner Policy
Exclusions
OPENNWIF
Powerful Earthly Laws Intentionally Neglect Nuclear War Floods
Power failure, Earthquake, Laws & regulations, Intentional acts, Neglect, Nuclear hazard, acts of war, flooding
Formula for Replacement Cots Coverage
“Co-Insurance Formula”
Required Coverage
= Replacement Cost x
CoInsurance %*
*(80% Res'l & 90% Comm'l)
Claim Payment
= ($ Carried/$ Covered) x
($ Loss - $Deductible)
Covered ppl in PAP
Insured, anyone riding with Insured, and family with insured if hit while walking.
Friends NOT covered if walking
Umbrella ?
Almost always a good answer
Covers catastrophic loss over other policy limits
Professional Acts EXCLUDED
Medicare Exclusions
foot care, eyes, hearing,
Emergency medical outside US
KEOGH Contribution
Sole Prop & Partnerships
Take 1/2 the self emp tax as ded
shortcut
15% contrib: $ Contrib x 12.12%
25% contrib: $ Contrib x 18.59%
IRA Deductible?
Neither have a QP: Yes
or only a 457: Yes
1 Active / 1 Non
Yes Non can if
combined AGI < 230 -240
Both Active
Yes if agi < 77-87, 123-143
“active” contrib to DC, benefits accrued in DC
Boot Calcs
Realized Gain, Recognized Gain, Substitute Basis
Realized = FMV Decided-Adj Basis
Recognized=lessor: Realized G & boot
If no boot, gainbis zero
Substitute basis= FMV of acquired -
(Realized G-Recognized G)
Self Employment Income parts
1099 pt work
BOD fees
Sched C declared income
GP K1
Contribution $ for HCE
3 stepper
Base % + Disparity % = excess %
Base % x SS Thresh = Base $
(Top$ - SS Thresh)(excess %) =
Excess $
Base $ + Excess $ = contribution $
