Fundamentals Of Estate Planning Flashcards
(36 cards)
What are the seven steps of estate planning?
Hint: same as for financial planning: UIADPIM
U-Understand current circumstances. I-Identify goals. A-Analyze their current path. D-Develop alternatives P-Present recommendations. I-Implement recommendations M-Monitor and update as necessary
Who is on the EP team? (5)
Attorney, CPA, Life Insurance Officer, Trust Officer, CFP
If you die with a will that doesn’t dispose of all of your property, can you be said to die intestate?
Yes, or partially intestate.
What is “ancillary probate”?
When you die, your movable property is disposed according to your state of residence.
Property, on the other had, is disposed according to the laws of its state.
What is a holographic will?
What does it need to be valid?
A hand-written will.
It must be signed and dated, but doesn’t need witnesses to be valid in most states.
What is a nuncupative will?
Is it valid?
- An oral will, or a dying declaration.
- Not valid in some states.
- Some states say valid for tangible personalty, but not real property.
- Some states say valid to a limited $ amt.
What is a statutory will?
One written by an attorney.
What is the difference between a reciprocal will and a joint will?
A reciprocal will is two spouses leaving their property to each other.
A joint will is the same, but also binds the surviving party to leave their assets to the person designated in the joint will.
What is legal testamentary capacity?
The required mental competence to write a will.
- Must recollect the property being disposed of in the will.
- Must recognize friends and relatives who have any claim to his assets.
What is a residuary clause (2)?
- disposes of residual assets
- names executor and successor executor and defines their powers.
What must you do to disclaim a bequest?
- Not benefit from the property, nor direct any future interest in the property.
- Disclaim within 9 mos. of death.
- Disclaim in writing.
What is Per Stirpes (by the roots)?
If you leave your estate to your 3 children per stirpes, and one dies before you, your surviving children still get 1/3 ea. And your grandchildren from the deceased child split 1/3.
What is per capita by generation?
Inheriting members of ea. Generation always get the same amount.
What is a codicil?
A supplement to a will, used to modify, amend, or explain it.
What is a side instruction letter?
Gives instruction for funeral and burial.
Gives instruction regarding specific tangible possessions (like household goods)
What are marital portion, homicide statutes, and divorce statutes?
State laws that
- require a spouse to be provided for in a will.
- prevent those convicted of killing the deceased from inheriting.
- prevent a former spouse from inheriting.
What are anti-lapse statutes?
Laws that say if someone in your will has died, you would want their portion of your estate to go to their heirs.
What is power of appointment?
The ability of someone given power of attorney to dispose of the principal’s assets for himself.
If you’ve given someone power of appointment over your assets and they die, what happens to your assets?
They become part of that person’s estate.
What does durable power of attorney mean?
The power does not expire when the principal becomes incapacitated, but does expire at their death.
What is a living will?
A document that says whether you’d like sustaining life care under certain circumstances.
Describe Tenancy In Common (5)
- Property owned on % basis between 2 or more individuals.
- Each can sell their % as they see fit.
- Each has their % included in their gross estate.
- Passes thru probate.
- If it goes to spouse, eligible for unlimited marital deduction.
Describe JTWROS (4)
- Property owned by 2 or more in equal %.
- At death, property is included in GROSS Estate BY ACTUAL CONTRIBUTION RULE but not included in probate estate, because it passes by right of survivorship.
- Each party can sell their interest, and if they do it becomes “fee simple” ownership (sole ownership)
- Property is included in gross estate according to ORIGINAL contribution.
When does the “actual contribution rule” (for inclusion in GROSS estate of JTWROS property) not apply? How is gross estate inclusion applied then?
When the joint tenants are married. If this is the case, they are both deemed to have contributed 50%, and each must include 50% in their GROSS estate.
