Special Situations Flashcards
What is a conservatorship?
It is a fiduciary relationship created by law for the purpose of one person, the fiduciary, to manage the PROPERTY of another, the ward.
Does not receive title of assets
What is a guardianship?
It is a fiduciary relationship created by law for the purpose of one person, the fiduciary, to manage the PERSONAL CARE AND WELL-BEING of another, the ward.
What is a springing POA and what are the associated questions for using it?
Springing, springs into effect upon capacitation. The questions are, what is that measurement of capacitation and who makes that call?
What are the benefits of a RLT for use in planning for incapacitation?
A FUNDED RLT, allows for multiple trustees (spouses, siblings, etc) who manage the assets of the trust as they would if not in trust. Trust is taxed to grantor and included in grantors estate. When incapacitated, that person is removed as trustee and the others continue to manage
How does a contingent trust w/durable POA work?
Upon capacitation, the POA goes into effect and the trust is established. The trust is funded by transferring assets to the trust and the trustee continues to manage. Lots of paperwork at that time.
What is a supplemental needs trust?
A non-self settled trust funded for the needs of another, but not to support the beneficiary, but just for the trustee to provide the beneficiary their supplemental needs. This is to ensure that the beneficiary can still maintain eligibility for government assistance
What does a living will do?
Give clear guidance and direction as to the healthcare wishes of the individual in the case that the individual becomes incapacitated and cannot express those desires
What is important about the DPOA Healthcare?
The agent needs to be a bit more clued-in about healthcare decisions (i.e. using Amber vs Mel)
What is significant about noncitizens and exclusions?
They don’t get them.
Marital exclusion requires two U.S. citizens
What is the super annual exclusion?
$100k, indexed annually, for transfers from a US resident spouse to an alien spouse. Must be present interest and non-terminable
How are non-resident aliens treated for annual exclusion, charitable deductions, and applicable lifetime credits?
Annual excursions: yes
Charitable deductions: unless international treaty exist, only deduct for domestic charities
Lifetime exclusion: no
How is JTWROS treated with a non-resident spouse?
Instead of 50/50 in each estate, the estate of the first to die will include 100% of the asset(s) value unless the surviving alien can prove contribution
How is the marital deduction handled for giving property to a non-resident?
The the use of a qualified domestic trust (QDOT), the unlimited marital deduction can be used and the IRS can tax that trust through the use of a US citizen trustee.
What is a cohabitation agreement?
The same as a prenup, except for unmarried couples who live together. It determines who has what and what happens when the relationship terminates for cause or death
How should a planner think of the challenges surrounding unmarried couples and in some states, same-sex couples w/unions or unrecognized marriages?
As individuals with no spousal rights
