Giving Flashcards
Giving out of excess in your life
Healthy Giving
Does not enhance the well being of both the receiver and the giver
Unhealthy Giving
Use money management tools
Prepare for Giving
Statement of Financial Position, Income and Expense Statement, Spending Plan
Money Management Tools
Asses overall financial position to evaluate pros and cons of giving; creates a plan for special giving events
Financial Statements
Choose a career that helps you meet your goals; be grateful to those that help improve your human capital
Earning
Emergency savings should be established prior to giving
Savings & Investing
Ensure you have planned for unaccounted life events
Risk Management
Particular item or property in an estate transferred to beneficiary on owner’s death
Specific Gifts
Does not refer to specific item
Non-Specific Gifts
Everything left in estate after all debts, bills, and taxes have been paid and specific & nonspecific 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
Provide for the future financial security of your family and others.
Giving through a will or trust can …
Person who forms the trust and supplies the assets
Grantor
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 the Grantor
Assets subject to the trust
Property
Revoked; court
A trust can be revocable, _________ or modified at any time or irrevocable unless by special permission of ______ to terminate it.
Trust in which you assign the management of your assets to a trustee while you are living
Living Trust
Living trust that can be dissolved
Revocable Living Trust
Living trust that cannot be changed, although it can provide income to the grantor
Irrevocable Living Trust
Legal document by a person, the testator, that names one or more persons, executor, to manage his or her estate & provides for the distribution of property upon death
Will/Testament
Ensures estate is distributed as desired
The person specified in will receives a part of the estate
Prevents court from assigning you an unwanted administrator
Purposes 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; document only effective in the event you are unable to express your wishes yourself
Living Will
Spoken testaments given before witnesses
Oral Will
Formally prepared document signed in the presence of witnesses
Testamentary Will
Written without the presence of witness
Holographic Will
Name and place of residence, description of assets, names of spouse, children and other beneficiaries, alternate beneficiaries, specific gifts
Elements of a Will
Executor files forms in probate court, provides a copy of the will, a list of the assets, and liabilities of deceased, pays debts and sells necessary assets (can open bank acct for this).
Executing the Will
Legal process that declares a will valid and ensures the orderly distribution of assets
Probate
A clear and complete plan of what should happen upon your death
Estate Planning
Provide for loved ones after your passing, strengthen family relationships by giving them a designated path to follow, reduces time, effort and costs for survivors, leaves a legacy
Positive Outcomes of Estate Planning
Giving up one thing for another
Trade-Off
Must be 18 (most states), letters are not legal documents, letter > conversation because they have longer presence
Estate Planning for Teens
Letter of Last Instruction
Estate Planning for Minors
Requires a legal document called a will
Guardianship
Determines guardians, money flow otherwise determined by court
Will
Titling; will
Attorneys can provide you insights for ________ documents, _____, etc.
Worth; net
Accountants can help you determine net _____, see ___ advantages
Investments; assets
Certified financial planners can help you diversify ____________ and _______ assets
Assets of a deceased person after all the debts are paid; planning of how your wealth will be allocated on or before your death.
Estate
Peace of mind, maintain control, protect all assets (estate taxes, creditors, special needs), avoid probate
Estate- Primary Functions
May need a guardianship, medical wishes may not be carried out, State law decides where your assets go, minor children is court’s decision, heirs may incur your estate taxes
Consequences of No Planning
Spouse
Without a surviving _______, a large estate is subject to estate taxes.
Assets
Value of estate is the value of all ______ minus funeral and administrative expenses.
2001; Gradually increase tax free limit while reducing a maximum tax rate
Tax Relief Act of 2001
Testator; divided
A testamentary trust allows the ________ to control how property will be ________.
Living will, executor, decedent, beneficiary, testator, fiduciary
Terms Dealing with Estate
