Giving Flashcards
a particular item or property in an estate transferred to beneficiary on owner’s death. Specifics must be provided. (house, jewelry, etc.)
Specific gifts
items that does not refer to specific item. (all my personal possessions
Non-specific gifts
everything left in estate after all debts, bills and taxes have been paid and specific and non specific gifts have been distributed
Residuary gifts
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
Gifts to children
Gifts left to charity in will are free from inheritance tax.
Gifts to charities
The person who forms the trust and supplies the assets
Grantor
The person named in the trust to administer the trust according to the terms and state trust law
Trustee
The person for whose benefit the trust property is held by the trustee
Beneficiary
must have a valid legal purpose
Intent from grantor
asses subject to the trust
Property
A trust in which you assign the management of your assets to a trustee while your living
Living Trust
Living trust that can be dissolved; can be modified at anytime.
Revocable living trust
A living trust that cannot be changed, although it van provide income to the grantor
Irrevocable Trust
- Ensures the estate is distributed as desired
- Beneficiaries (heirs), the persons specified in will receives a part of an estate
- To prevent the courts from assigning an administrator who may not carry out your wishes.
Purpose of a Will
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.
A Living Will
spoken testaments given before witnesses. Not widely recognized from a legal perspective
Oral Will
formally prepared document signed in the presence of witnesses.
Testamentary Will
written without the presence of witness. Rarely hold up in court.
Holographic Will
- 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
Elements of a Will
the assets of a deceased person after all debts are paid. It is used to determine how your wealth will be allocated on or before death
Estate
Without a surviving spouse, a large estate is subject to…
Estate Taxes
an agreement that determines how a person’s property is to be managed and distributed during lifetime and upon death
a Trust
the legal process that declares a will valid and ensures the orderly distribution of assets
Probate
- May need a guardianship
- Medical wishes may not be carried out
- State Law via a public probate process decides who receives your assets and in what proportions
- Court decides who raises your minor children
- Heirs may unnecessarily incur estate taxes
Consequences of No Estate Planning
In the event there is no will, what will happen?
The court appoints an administrator to make a decision on how the property is to be distributed
How do you avoid probate?
Estate planning
What is the maximum amount for a gift to stay tax-free?
$10,000
This is a document that specifies changes in an existing will must be prepared to make minor revisions
A codicil
What two types of will are most likely to be held up in court?
A testimony will and a living will
What two types of will are least likely to held up in court?
A oral and holographic will
a legal document designating the transfer of property and assets upon a person’s death
A will
- Create a spending plan
- Evaluate needs, wants and values
- Assess your time
- Plan for expenses, such as Christmas gifts
- Avoid using credit for giving
Ways to prepare for giving
What is the difference between and living-revocable trust and a will?
A will designates were your assets will go upon death. A living revocable trust appoints a trustee who makes financial decisions on your behalf if you become incapacitated (either through illness or other means)
When should I think about getting a will?
Anytime, but if you do buy a house or any real estate you should get a will if you don’t already have one
Who can write a will?
It can be written by any person of legal age and being of sound mind and memory
Who Can Help with Estate Planning?
- Attorneys: can provide you insights for titling documents, wills, etc…
- Accountants: can help you determine net worth, see tax advantages
- Certified Financial Planners: can help you diversify investments, protect assets
What is Estate Planning?
A clear and complete plan of what should happen upon your death
