personal finance Flashcards
Specific Gifts
particular item or property in an estate transferred to beneficiary on owner’s death.
Non Specific Gifts
does not refer to specific item. (all my personal possessions)
Residuary gifts
everything left in estate after all debts, bills and taxes have been paid and specific and non specific gifts have been distributed
Gifts to children
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 charities
Gifts left to charity in will are free from inheritance tax
What does a will do?
provide for the future financial security of your family and others.
Gifts in willls are….
flexible, easy to arrange, and may be changed with your life circumstances
Does a living will have anything to do with where your assets go?
no
What is a living will?
It is a medical document that tells doctors and family members what kind of care you want if you become incapacitated and cannot express wishes.
How does a living revocable trust make getting money to beneficiaries faster?
This makes it easier to get money to your beneficiaries without going through probate court, which can take between 6 months and two years.
Grantor
person who forms the trust and supplies the assets
Trustee
person named in the trust to administer the trust according to the terms and state trust law
beneficiary
the person for whose benefit the trust property is held by the trustee
intent from grantor
must have a valid legal purpose
property
asses subject to the trust
Can a trust be revocable?
yes
Who creates the testamentary?
Created in the will of the testator.
What does the testamentary trust do?
This trust allows the testator to control how the property will be divided.
Living trust
trust in which you assign the management of your assets to a trustee while you are living.
Irrevocable living trust
living trust that cannot be changed, although it can provide income to the grantor.
Revocable Living Trust
Living trust that can be dissolved.
What are the purposes of a will?
- 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.
Oral Will
spoken testaments given before witnesses. Not widely recognized from a legal perspective
Testamentary Will
formally prepared document signed in the presence of witnesses.
Holographic Will
written without the presence of witness. Rarely hold up in court.
What are the elements of a 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
What is a probate?
Probate is a legal process that declares a will valid and ensures the orderly distribution of assets.
What is Estate Planning?
A clear and complete plan of what should happen upon your death
Trade-off
A trade-off is giving up one thing for another.
Guardianship
requires a legal document called a will.
Will
is a legal document by a person, the testator, that names one or more persons, executor, to manage his or her estate and provides for the distribution of property upon death.
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
Estate
An estate is the assets of a deceased person after all debts are paid.
Codicil
a document that specifies changes in an existing will must be prepared to make minor revisions.
Who can write a will?
A Will can be written by any person of legal age and being of sound mind and memory.
How can the state claim your estate?
If you have no heirs and die without a will, the state can claim the estate.
Can a guardian be assigned in a will?
yes
Who prepares the gifts and money?
Attorney
What happens to your money if you have insurance trust?
It goes into the trust, not the estate.
What happens if you don’t get the incapacity clause with living revocable trust?
the government and lawyers could be getting the money that should be going to your loved ones.
What is better, living revocable trust or a holographic will?
living revocable trust
If you cannot agree on guardianship for your child what happens?
If you cannot agree on guardianship for your child, you will be leaving that decision to the state.
How long can probate court take?
between 6 months and two years.
What can estate planning do?
strengthen family
relationships, leave a legacy of care and good will, and
reduce the frustration, worry, some utlity and monetary cost incurred by survivors who struggle to settle an estate.
Can a child under the age of 18 create a will?
not in most states
A letter of last instruction
would be
preferred as a means of communication because writing has a
longer lasting presence and would have more weight in a conflict
Beneficiaries are also known as..
heirs
Why would the executor open the bank account?
The executor files forms in probate court, provides a copy of the will, a list of assets and liabilities of deceased, pays debts and sells necessary assets.
