Chapter 11-Titling & Services Flashcards
Joint tenants with rights of survivorship
1) Each owner has ___ interest in the account
2) Each owner can transact business without ____
3) If 1 owner dies, the dead’s share transfers to __.
1) equal and undivided
2) the other’s consent
3) remaining survivor(s) without probate
Tenants in common
1) co-owners are not required to hold ___
2) when 1 owner dies, their share gets disposed of according to ____
3) is not ____
1) equal interests
2) his/her estate plan
3) widely used
Community property (c/p) accounts are available to ___ who are residents of one of fewer than __ community property states.
An advantage of c/p account is when 1 spouse dies, the entire account receives ___
married couples; 10
a 100% step up in basis
Totten or payable on death (POD) trusts have __, but are ___.
no tax benefits; very simple
Living revocable trusts preserve ___
2nd unified credit.
The unified tax credit is a term encompassing two or more tax exemptions that taxpayers can use in combination to transfer substantial amounts of assets to heirs without ___. They are particularly valuable to business owners who intend to pass ownership of their companies to ___.
triggering the need to pay gift, estate, or transfer taxes.
heirs or trusted employees.
Charitable trusts are ___, and have current ___ plus ___deductions.
fairly complex; income tax deduction; estate tax
Living irrevocable trusts are ___, and allow ___ to be held outside the estate.
fairly simple; life insurance
For a married couple, the most frequently used trust is ___ (also known as an __).
Upon death of the 1st spouse, the trust is divided into 2 parts: part A-the person ____ and part B-the person ___.
marital deduction trust; AB trust
above ground; below ground
JTWROS is a common way to register fund accounts. Many couples feel secure using it without having a ___ or ___.
IBF thinks couples should not do this because you need a trust or will for ___ like both spouses ___.
Living trusts do not reduce ____ but can reduce ___.
trust or will
special circumstances; dying together
income tax liability; estate taxes
JTWROS property would pass to the surviving joint tenant when an owner dies, even if ___.
the deceased had a valid trust or will.
For account owners with ___ intent, a Transfer on Death (TOD) account is an effective estate planning tool that avoids problems associated with ___.
TOD avoids ___ and supersedes any will or trust ___.
donative; JTWROS
probate; account beneficiary conflict
Mutual funds provide shareholders with these 5 common documents:
1) ___ statements
2) ___ statements
3) Form ___; mailed in late ___
4) Form ___; mailed late __; determines your taxable ____
5) Form ___;mailed in ___; shows distributions from ____
1) confirmation
2) account activity
3) 1099-DIV; January
4) 1099-B; January; gains & losses
5) 1099-R; January; retirement accounts such as IRAs & pensions
Other forms:
Form 1099 Qs are mailed in ___ and include ___
Form 1099-INTs are mailed in ___ and include ___
late January; distributions from educational accounts
late January; income from dividends from muni bond funds & any private-activity bond interest
A Systematic Withdrawal Plan (SWP) provides an investor with a ____ basis.
specific stream of income on a regular
