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Personal Finance_ Estate Planning > Estate Planning > Flashcards

Estate Planning Flashcards

1
Q

Specific gifts

A

particular item or property in an estate transferred to beneficiary on owner’s death. Specifics must be provided

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2
Q

Non-specific gifts

A

does not refer to specific item

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3
Q

Residuary gifts

A

everything left in estate after all debts, bills and taxes have been paid and specific and non specific gifts have been distributed

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4
Q

Gifts to children

A

executors will keep for safekeeping gifts to children under 18 until they become of age unless will specifies guardian or parents take receipt of gift on child’s behalf

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5
Q

Gifts to charities

A

Gifts left to charity in will are free from inheritance tax.

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6
Q

grantor

A

person who forms the trust and supplies the assets

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7
Q

trustee

A

person named in the trust to administer the trust according to the terms and state trust law

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8
Q

beneficiary

A

the person for whose benefit the trust property is held by the trustee

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9
Q

intent from grantor

A

must have a valid legal purpose

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10
Q

property

A

assets subject to the trust

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11
Q

A trust can be revocable

A

you can change the trust depending on things you get that add to your net

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12
Q

testamentary trust

A

is created in a will by a testator who bequeaths his/her property to beneficiaries

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13
Q

Living trust

A

a trust in which you assign the management of your assets to a trustee while you are living

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14
Q

irrevocable trust

A

a living trust that cannot be changed although it can provide income to the grantor

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15
Q

A Living Will

A

a document to make your family aware of the type of care you want to receive if you should become terminally ill, on life support or permanently unconscious. This document is only effective in the event you are unable to express your wishes yourself.

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16
Q

Oral Will

A

spoken testaments given before witnesses. Not widely recognized from a legal perspective

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17
Q

Testamentary Will

A

formally prepared document signed in the presence of witnesses.

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18
Q

Holographic Will

A

written without the presence of witness. Rarely hold up in court.

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19
Q

Executing the Will:

A

The executor files forms in probate court, provides a copy of the will, a list of assets and liabilities of deceased, pays debts and sells necessary assets. The executor typically opens a bank account for this purpose.

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20
Q

Elements of a Will:

A 
name and place of residence
description of assets
names of spouse, children and other beneficiaries
alternate beneficiaries
specific gifts
establishment of trust if desired
cancellation of debts owed to you
name of executor to manage the estate
name of guardian for minor children
name of alternative guardian
your signature
witnesses' signatures
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21
Q

Purpose of a Will:

A

Ensures the estate is distributed as desired

22
Q

estate

A

the assets of a deceased person after all debts are paid

23
Q

Consequences of No Planning

A

Medical wishes may not be carried out

24
Q

Estate Taxes

A

Without a surviving spouse, a large estate is subject to estate taxes.

25
Q

Determining estate taxes:

A

In 2001, estates with values over $675,000 are subject to federal taxes of 37% to 50%.

26
Q

Estate - Primary Functions

A

Peace of Mind

27
Q

Consequences of No Planning 1

A

Heirs may unnecessarily incur estate taxes

28
Q

Consequences of No Planning 2

A

May need a guardianship

29
Q

Consequences of No Planning 3

A

Medical wishes may not be carried out

30
Q

Consequences of No Planning 4

A

State Law via a public probate process decides who receives your assets and in what proportions

31
Q

Consequences of No Planning 5

A

Court decides who raises your minor children

32
Q

Estate planning

A

is the process of planning or how your wealth will be allocated on or before your death.

33
Q

identify a guardian

A

surviving children under 18 and to determine how the estate is to be distributed upon death to beneficiaries or heirs

34
Q

average living age

A

Americans, on average, live to 77.9 years old

35
Q

choose want you want

A

A clear and complete plan of what should happen upon your death

36
Q

living will

A

A plan to care for someone who is young or incapacitated and cannot care for themselves

37
Q

after you die

A

Provide for loved ones.

38
Q

Teen Estate Planning

A

letters are legal documents

much be 18 in most states

39
Q

who can help?

A

attorneys, friends, and family

40
Q

accountants

A

can help you determine your net worth

41
Q

Attorneys

A

titling documents and wills

42
Q

A letter of last instruction

A

a longer way of lasting what your wishes are and parents can know what you want without it being an official document.

43
Q

Values

A

how much something is worth to someone.

44
Q

trust

A

This trust allows the testator to control how the property will be divided.

45
Q

holographic will

A

handwritten will

46
Q

If you cannot agree on guardianship for your child

A

the state will choose for you

47
Q

WHEN SHOULD I THINK ABOUT GETTING A WILL?

A

anytime is great, you don’t know when you are going to die so best to start now.

48
Q

This money passes down to your children.

A

money from your death goes to your children

49
Q

Don’t put your name on your parents’ house!

A

sell the house so that you won’t be spending extra money on it trying to pay property tax.

50
Q

UTMA & UGMA

A

uniform transfers to minor account & uniform gift to minors account

Personal Finance_ Estate Planning (1 decks)

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