Terms 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
Residuary Gifts
everything left in estate aftrer 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
Gifts to charities
gifts left to charity in will are free from inheritance tax
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
assets subject to the trust
living trust
trust in which you assign the management of your assets to a trustee while you are living
Recovable living trust
living trust that can be dissolved
Irrevocable living trust
living trust that cannot be changed, although it can provide income to the grantor
Will/testament
a legal document by a person, the testator, that names one or more persons , executor, to manage his/her estate and provides for the distribution of property upon death
A living 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, only effect in the event where you cannot express 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
estate planning
a clear and complete plan of what should happen upon your death
trade off
giving up one thing for another
guardianship
requires a legal document called a will
attoreneys
provide you insights for titling documents, wills, etc
accountants
help you determine net worth and see tax advantages
certified financial planners
help you diversify investments and protect assets
estate
the assets of a deceased person after all debts are paid
What are the primary functions of estate?
peace of mind, maintain control, protect assets, avoid probate
What type of consequences would you have if you didn’t do estate planning?
may need guardianship, medical wishes might not be carried out, state law decides who receives your assets and the proportions, etc
gradually increased tax free limit while reducing a maximum rate
Tax Relief Act of 2001
What is a positive outcome of estate planning?
provides for loved ones after you are gone, and leaves a legacy to family
How old do you have to be to do estate planning when your a teen?
you have to be 18 years old
What determines the care of children under 18?
Guardianship
Who can help with planning?
family, financial institutions, attorneys, etc.
What is the first step to estate planning?
honest conversation
Financial statements lead to…
earning, and eventually saving and investing
What is the purpose of a will?
to ensure the estate is distributed and desired
these files provide a copy of the will, a list of assets and liabilities, and pay debts and sells necessary assets
executor
Can a trust be revocable?
yes, at any time
Gifts by will include:
specific gifts, non specific gifts, residuary gifts, etc
healthy giving
giving out of excess in you rlife
unhealthy giving
when giving is a method of gaining power over another
