Estate Planning Flashcards2
Estate Planning
The process of accumulation, management, conservation, and transfer of wealth considering legal, tax and personal objectives.
Effective Transfer
Occurs when a person’s assets are transferred to the personal institution intended by that person.
Efficient Transfer
Occurs when transfer costs are minimized consistent with the greatest assurance of effectiveness.
Probate Process
The legal process of changing title to the decedent’s assets from the decedent to the heirs and legatees.
Estate Planning Goals
1.) Fulfill the client’s property transfer wishes; 2.) Minimize transfer taxes; 3.) Minimize transfer costs; 4.) Maximize net assets to heirs; 5.) Provide needed liquidity at death; and 6.) Fulfill the client’s healthcare decisions.
Heirs
Those who inherit property under state law.
Legatees
Those who inherit property through a will.
Risks in Failing to Plan an Estate
1.) The client’s property transfer wishes go unfulfilled; 2.) Transfer taxes are excessive; 3.) Transfer costs are excessive; 4.) The client’s family may not be provided for financially; and 5.) Insufficient liquidity to cover client’s debts, taxes and co
The six basic steps of the estate planning process
1.) Establish the client/planner relationship; 2.) Gather client information and establish client’s transfer goals; 3.) Determine client’s financial status; 4.) Develop a comprehensive plan to transfer property consistent with information and goals; 5.) I
Unauthorized Practice of Law
The proffering of legal advice or services by one who is not a licensed attorney.
The Basic Documents of an Estate Plan
Wills; Side Letters of Instruction; Power of attorney; Durable power of attorney for health care; Living wills or advance medical directions; and do not resuscitate orders.
Will
A legal document hat give an individual the opportunity to control the distribution of property at death and avoid state intestacy laws.
Testator
Will-maker.
Testate
A status where the deceased passed away with a will.
Intestate
A status where the deceased passed away without a will.
Domicile
The state where a person lived at the time of death.
Situs
The state where (real) property is actually located.
Ancillary Probate
A probate process in a state other than the state of domicile.
Uniform Probate Code
A model set of rules that serves as a guideline for many states’ probate laws.
Administrator
An estate representative appointed by the probate court.
Executor
An estate representative appointed by the decedent through the will.
Requirements to execute a valid will
The will must be in writing and it must be signed at its logical end by the testator.
Statutory Will
A will drawn up by an attorney that complies with state statutes for wills and witness requirements.
Holographic Will
A will handwritten by the testator that includes the material provisions of a will. Must be signed and dated by the testator.