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Personal Finance Exam 3 > Exam 3 > Flashcards

Exam 3 Flashcards

1
Q

gifting

A

can gift up to 16,000 dollar per person per year to anybody you choose to give a gift to

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2
Q

Estate Planning

A
  • idea of how I want my assets to be distributed after I have passed on, is a legal process, it is required
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3
Q

Codicil

A

how to make changes to our wills, minor changes no major changes

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4
Q

beneficiary

A

the person who benefits from your death

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5
Q

executor

A

individual who is carrying out the way that the will is written

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6
Q

administrator

A

used if there is not a will

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7
Q

Heir

A

your biological child that is entitled to money from your estate

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8
Q

guardian

A

if you have children under the age of 18 you need to identify who is going to take care of your children that is this
-you have to say if you want to write someone out of your will

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9
Q

Power of attorney medical

A

able to make medical decisions with and for the individual

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10
Q

power of attorney financial

A

able to pay the bills and maintain the financial side with or without them, can write out checks

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11
Q

Advanced Directive

A

another name for a living will, legal document, what your intentions are, executor has to carry this out

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12
Q

Living will

A

not legally filed, what you intend have happen to you

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13
Q

letter of last instruction

A

says what you want to have happen at the funeral

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14
Q

estate tax

A

paid to the government based on the value of the entire estate before it is closed, the estate attorney pays this money up front

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15
Q

inheritance tax

A

what the individual has to pay based on the inheritance usually 4% and goes up but travels from spouse-to-spouse tax free – most of time the estate will take care of this for you

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16
Q

probate

A

process of being reported with the court, it is public, you do not have a will, lengthens the time to close an estate

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17
Q

interstate

A

if you die without a legal will

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18
Q

simple will

A

half goes to spouse and half to kids – how they are written

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19
Q

Traditional Marital share

A

50-50

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20
Q

Formal will

A

go to attorney signed notarized and finialed

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21
Q

holographic will

A

video, or own handwriting

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22
Q

statutory will

A

legal zoom fill in the blanks

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23
Q

revokable trust

A

changes can be made

24
Q

irrevocable trust

A

cannot make changes ever

25
Q

403b

A

health services and nonprofits

26
Q

401k

A

by coporations

27
Q

401k

A

by corporations

28
Q

pensions

A

given to you in terms of education or union type jobs, different from retirement plans, everyone puts in the same dollar amount

29
Q

IRA

A

once you hit 59 and a half you can start pulling money from it, all about minimum required distribution

30
Q

tax deffered

A

401k, putting in money and pay taxes on it when you pull the money out

31
Q

tax exempt

A

put in money after already paying taxes and grows then takes money out does not have to pay taxes on it

32
Q

vested

A

goes toward 401k, remain with that same cooperation for 4 to 5 years, once you have met it any matching that they do is now considered your money

33
Q

annuity

A

regular monthly payments

34
Q

age retirement

A

65

35
Q

SS(FICA)

A

collect at 62 but get reduced benefit until 65, 70 get extra benefit

36
Q

incontestability clause

A

comes into play with estate planning, says within the first two years of taking out a policy with suicide or a crime then there will not be a payout

37
Q

Firm Life insurance

A

Life insurance is a contract between an insurer and a policyholder. A life insurance policy guarantees the insurer pays a sum of money to named beneficiaries when the insured policyholder dies, in exchange for the premiums paid by the policyholder during their lifetime. Life insurance is a legally binding contract

38
Q

whole life insurance

A

gives individuals and their families financial security; are also useful for businesses as a contingency plan for the loss of a key employee or partner

39
Q

actuary

A

the individual who calculates risks and give them a dollar value

40
Q

limit order

A

giving a specific dollar amount, a limit in which you are willing to spend, defined number

41
Q

market order

A

buying that share that day for that price at that moment

42
Q

common stock

A

gives you voting rights in shareholder meeting one vote per stock, give up rights to dividends

43
Q

preferred stock

A

guaranteed dividends, not able to vote the dividend is taxed

44
Q

proxy

A

will vote on share holders’ behalf will submit vote

45
Q

dividends

A

the dividend amount is either a stated amount of money for each share or preferred stock or a percentage of the par value, can be cumulative, is taxable as income on your tax return

46
Q

voting

A

when holding shares in a common stock the shareholder can vote in meetings

47
Q

closed end

A

no longer taking in new investors, can only get a share if a current investor sells off their shares

48
Q

open end

A

takes in new investors

49
Q

mutual fund

A

it is professionally managed, great for new holders

50
Q

IPO

A

initial public offering, when company comes to market for the first time it occurs on the primary market only selected to be able to buy them, money goes directly to the company

51
Q

primary market

A

IPOs occur

52
Q

secondary market

A

day two of trading New York stock exchange and Nasdaq- has 4 letters in their ticker symbol

53
Q

ticker symbol

A

how you identify a stock 3 or 4 letters could be less than 3

54
Q

components of a bond

A

principle or par value of $1,000 dollar

55
Q

coupon

A

interest rate, money you will pay twice a year

Personal Finance Exam 3 (1 decks)

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