Estate Flashcards
What are the Will Clauses?
Residuary Clause (check)
Disclaimer Clause
Codicil(amendment)
Living will
What is Post Mortem?
Post-mortem planning, also known as estate or legacy planning, is a technique that involves managing and distributing a deceased person’s assets and affairs. Planning does not stop with the death of the client
Living will also named as?
Advanced medical directive(need more than this)
What do we need that will allow somebody to make decisions on somebody else’s behalf when they are incapacitated?
Durable power of appointment
What is the characteristics of General power of appointment?
Own, if dies with the power, added to the gross estate power holder unless it is “ascertainable standard” = HEMS
Springing power of attorney
Incapacity= durable power of attorney
Fee Simple
Fee Simple, 100% ownership. 100% in Gross Estate/100% in Probate Estate
Tenants in common
TC share %, fractional share goes into Gross and Probate estate. Can convey piece without other’s permission
JTWROS
2 tenants: spousal/ non spousal tenant;
50/50 ownership;
Can convey piece without other’s permission
Tenancy by Entirety
Married only;
Cannot sever without spouse’s permission; Creditor protection is higher
Community Property
Married only, 50/50 ownership
Full step-up basis at first death
No survivorship, goes into probate.
Avoid probate - By Laws
By law includes JTWROS, Tenancy by Entirety, Trust.
Avoid probate - By Contract
By contract includes Beneficiary designations, retirement, life insurance, annuities, TOD, POD(Payable on Death).
SCIN - Self Canceling Installment Note
Note cancels at seller’s death.
No estate inclusion. Buyer owes no more.
“bet to die”.
Buyer pay a risk premium.
Always have a term.
Secured promise pay – have collateral.
Buyer’s basis = purchase price
Private Annuity
Buyer pays for the seller’s life.
Lifetime income. No term.
No collateral. No security.
Basis of the buyer is accumulated P+I.
FLP - Family Limited Partnership
GP(100%)+ LP(0%) goes into GP(1%)+LP(99%). Gifting arrangement, stay in control, utilizing discounts.
Lack of marketability, minority discount
CRAT
Grantor received fixed payment, remainder goes to charity;
Trust is tax exempt – trust generate income but not taxable;
term up to 20 yrs/life; 10% Rule – Remainder interest ;
Tax deduction to the grantor is PV of the remainder interest(Take the tax deduction by life insurance and name kids as beneficiaries); No new money; fixed payments;