Practical Guide to Estate Planning Flashcards
Master General Trust & Estate Theory
What are some of the common reasons that people don’t talk about Estate Planning?
- Natural reluctance to contemplate and plan for their death.
- Belief that they don’t have sufficient assets to justify the time and expense of planning.
- Belief that the law will take care of things in a satisfactory manner.
What are some of the benefits of a Revocable Living Trust (RLT)?
- Probate avoidance (greater privacy and presumably less cost).
- A unified plan of disposition for probate and non-probate property (greater efficiency).
- Disposing of property in a tax-advantaged manner.
- Management and/or distribution of a client’s assets in the event of incapacity or death.
What are some of the benefits of a durable power of attorney? Is a standing or springing generally more preferable and why?
- Allows for the management of the client’s assets without the expense and publicity of a guardianship hearing.
- A standing POA is generally preferred because it avoids the problem of determining when someone is actually incapacitated (and the issue of them regaining capacity. Also, you should already trust the person that is your POA, so it should be okay for them to have the POA when you have capacity.
What is the basic framework that helps an attorney to determine information that needs to be collected?
(1) Who: The personal information about the client and the other important people in the client’s life. (EX: Relationship with family; heirs at law; client’s health; etc.).
(2) What: The property owned by the client.
(3) Where: The client’s wishes about the disposition of his property in the future (EX: kids; stepchildren; non-marital partners; charities; etc.).
What should an attorney do when they are alerted to a client’s real property or business interest?
They should ask to see the actual documents (deeds, appraisals, governing business documents, etc.).
What are some questions to keep in mind when reviewing client assets?
- Is the property likely to become of sufficient value to warrant tax planning for either state or federal estate taxes?
- Is the property difficult to value?
- Is the value appreciating or depreciating?
- Does the property have sentimental value?
- Is the property relatively liquid or illiquid?
- What liabilities does the client have?
Provide a definition of “non-probate property.”
In general, non-probate property is all property directly owned by a person for which there is a legally recognized death beneficiary designation.
Provide a definition for “probate property.”
Probate property is all property directly owned for which there is no legally recognized death beneficiary designation.
Define “probate process.”
The probate process is a court supervised process through which a decedent’s assets are collected, debts of the decedent (including estate tax liabilities) are paid, and the remaining property is distributed according to the terms of the will or the provisions of the intestacy statute.
What is joint tenancy ownership of property?
A joint tenancy is a form of property ownership in which two or more people share undivided ownership of property during their lives, and, upon the death of one of the joint tenants, the ownership interest of the one who dies is extinguished, leaving outright ownership in the survivor.
Can a joint tenant dispose of his joint tenant interest by will? What result if a joint tenant conveys his joint interest to a third party?
No. Conveying the joint interest to a third party will create a tenancy in common.
