Chapter 1: Intro to Estate Planning Flashcards
What is an efficient transfer?
A transfer in which costs of the transfer are minimized consistent with the greatest assurance of effectiveness.
What is an effective transfer?
A transfer of a person’s assets to the person or charitable institution intended by that person.
Definition of Estate Planning
The process of accumulation, management, conservation, and transfer of wealth considering legal, tax, and personal objectives.
Heir
One who inherits under state law.
Legatee
One who inherits under the will.
What is the probate process?
The legal proceeding that serves to prove the validity of existing wills, supervise the orderly distribution of decedents assets to the heirs, and protect creditors by insuring that valid debts of the estate are paid
What are transfer costs?
Includes the gift and estate taxes and the costs of avoiding taxes, such as the cost of documents, planning, trusts, and other professional fees
What is unauthorized practice of law?
The proffering of legal advice or services by one who is not a licensed attorney
Who are part of the estate planning team?
Attorney, CPA, life insurance consultant, and financial planner
What did the TRA 2010 do?
Extended the EGTRRA 2001 through December 31, 2012
What are the goals and objectives of estate planning?
Fulfill clients property transfer wishes Minimize transfer taxes Minimize transfer costs Maximize net assets to heirs Provide needed liquidity at death Fulfill clients healthcare decisions
What are the risks in failing to plan and estate?
Clients property transfer wishes go unfulfilled
Transfer taxes are expensive
Transfer costs are excessive
Clients family not properly provided for financially
Insufficient liquidity to cover clients debt, taxes, and costs at death
What are some common transfer objectives?
Transfer property as desired and minimize estate and transfer taxes to maximize the assets received by heirs
Avoid the probate process
Use lifetime transfers- gifts
Meet liquidity needs at death
Plan for children
Plan for the incapacity of the transferor
Provide for the needs of the transferors surviving spouse
Fulfill the transferors charitable intentions
