Estate Planning

Question 1

Probate process

Answer 1

the legal proceedings through which the decedent’s assets that are not automatically transferred to heirs by contract or law are retitled in the name of the heirs.

• proves the validity of a will
• supervises orderly distribution of assets to heirs
• ensures creditors are paid

Question 2

5 Goals of estate planning

Answer 2

1. fulfill client’s property transfer wishes
2. minimize transfer taxes and costs
3. maximize net assets to heirs
4. provide needed liquidity at death
5. fulfill client’s healthcare decisions

Question 3

heirs vs legatees vs devisee

Answer 3

heirs: receive property under state intestacy laws
legatees: receive property under a will
devisee: person who inherits REAL property under the will

Question 4

Intestate / Intestacy

Answer 4

To die without a valid will

Question 5

Codicil

Answer 5

Amendment or supplement to a will. Can be used to dispose of new property.

Question 6

Testator

Answer 6

writer of a will

Question 7

No-Contest clause

Answer 7

Discourages heirs from contesting a will by significantly decreasing or eliminating bequests to them if they file a formal legal contest to the will

Question 8

Inter Vivos Trust

Answer 8

Trust created during grantor’s lifetime

Question 9

Grantor

Answer 9

Person who creates and initially funds a trust

Question 10

3 Types of property / definition

Answer 10

1. Real Property - realty and things permanently attached to it (buildings, trees, fixtures)
2. Tangible Personal Property - anything that is not realty but has physical substance
3. Intangible Personal Property - no real and no physical substance (stocks, bonds, patents, copyrights…)

Question 11

3 Disadvantages of probate

Answer 11

1. Time: average 6-24 months
2. Cost: 5-10% sometime up to 20% of estate
3. Privacy: open court all files public record