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Texas Board of Legal Specialization Estate Planning Study Cards > Test Studying Deck > Flashcards

Test Studying Deck Flashcards

1
Q

Community Property Tracing

A

When an account include separate property and community property, it is presumed that community funds are withdrawn first. There is an exception for tracing of separate. The lowest balance in the particular account during the tracing. Is the upper limit on the amount of separate property.

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2
Q

Quasi-community property

A

Quasi-community property only arises during a divorce and it is generally the separate property of spouse that was acquired while the spouses were residing in a common law state, but would have been community property had they lived in Texas. A Texas court can only divide community or quasi-community property under its just and equitable division power and can make an unequal division of this property.

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3
Q

Quasi-community property on death

A

Community quasi-community property is not divided on death as it is during divorce. This is not a classification of property for the probate court.

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4
Q

Community debt presumption

A

Debts contracted during the marriage are presumed to be debts of both, and the money borrowed and the property acquired on the credit is presumed to be community property.

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5
Q

General rules of marital property liability the transfer must have

A
  1. The spouses separate property is usually not subject to the debts of the other spouse.
  2. So management community property of one spouse is not liable for any liabilities of the other spouse incurred before marriage and any non-tortious liabilities the other spouse incurred during marriage.
  3. All community property is subject to the tort liability of either spouse incurred during the marriage.
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6
Q

Community and separate property presumptions of mineral interests

A

Bonus payments and royalties received on separate mineral estate property remain separate property. Delay rentals on separate property become community property because they are not payment for the minerals. If a working interest is acquired during marriage, then the interest is community property cannot be changed by the use of separate property develope the lease

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7
Q

Community and separate presumptions of life insurance

A

Proceeds of life insurance paid out or treated as being one half community property of the insurance files and one have to be the property of the noninsurance mouse.When life insurance proceeds are payable to the surviving spouse, then the entire proceeds are treated as the separate property of the spouse receiving the proceeds.

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8
Q

Exempt property for the surviving spouse

A

The homestead exemption exempt personal property does not exceed $100,000, and the family allowance for one year’s maintenance of the surviving spouse and minor children.

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9
Q

Administration of community property with no personal representative.

A

If there is no personal representative, the surviving spouse may sue to recover community property to sell or otherwise dispose of community property and click claims owing on the community estate.

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10
Q

Estate Planning Tools

A

Trusts
Entities
Agreements

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11
Q

Prohibited terms for premarital agreement

A

Cannot violate public policy
Cannot adversely affect child-support
Cannot defraud creditors
May not wave survivors benefits under ERISA

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12
Q

Testamentary capacity requirements

A

Statutory requirements
one. Age 18 or lawfully married or member of the Armed Forces
2. Sound mind
sufficient ability to understand the business in which he is engaged excellent sufficient ability to understand the effect his act and making the will, capacity to know the objects of his bounty, Pacitti to understand the general nature and extent of his property, and memory sufficient to collect the elements of the business to be transacted and hold them long enough to perceive at least their obvious relation to each other and to be able to form a reasonable judgment

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13
Q

Insane delusion

A

A Will or a portion of it may be held invalid under an insane delusion if the testator is laboring under the belief or supposed set of facts that do not exist and no rational person would believe.

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14
Q

Will witnessed by beneficiary of the estate

A

A Will is not invalid because an interested beneficiary witnessed it. The gift to the interested witness will be limited to his intestate share.

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15
Q

Interlineations on a will

A

Alterations or interlineations made on the original will before its execution are controlling, but alterations to the will made after the original execution are not, and the will stands as originally written.

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16
Q

Undue influence test

A

There must be the existence of an influence, the influence must subvert the mind of the testator at the time of execution, and the execution of the document would not have occurred but for the influence

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17
Q

Mistake in the fact

A

Testator is in error regarding identity or contents of the instrument he is executing. If there is confusion in the identity of the document on the part of the testator, it will not be admitted to probate, but evidence may not be admitted to alter the plain meaning of words in the will to provide the bequest was mistaken mistakenly omitted

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18
Q

Latent ambiguity

A

Evidence is admissible to clarify an ambiguity in a will

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19
Q

Mistake in the inducement

A

If the testator is induced to sign the will buy his mistaken belief as to some extrinsic fact. No remedy is available for mistake in the inducement because of the difficulty in determining what the testator would have done in the absence of the mistake.

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20
Q

Revocation of will

A

It will may only be revoked by subsequent writing, physical act, or operation of law. An intent to revoke must exist for a will to be revoked by subsequent writing or physical act

21
Q

Implied partial revocation

A

A will may be revoked in whole or in part by a subsequent inconsistent will even if the subsequent will contains no express language of revocation. If a subsequent will is totally inconsistent with a former will, the former Will is not entitled to probate. Courts will as far as possible attempt to read the two wills together.

22
Q

Physical revocation of wills

A

There must be a physical act by the testator or someone at the testator’s direction and in the testator’s presence, and the intent to revoke. The entire Will must be obliterated with the intent to revoke. Mistaken belief as to the identity of the will is not sufficient (destroying your wife’s will thinking it is your own). it is not possible to partially revoke an attested will, but it is possible to partially revoke a holographic will.

23
Q

Divorce and life insurance proceeds

A

The family code provides that a divorce operates as an automatic revocation with respect to life insurance does proceeds passing to the divorced spouse.

24
Q

Persons who may not be appointed as executor

A

And incapacitated person, a convicted felon, a nonresident individual or corporation it was not filed an appointment of resident agent for service of process, a corporation unauthorized act as a fiduciary in Texas, or a person from the court finds unsuitable. Taking actions that require court approval without first obtaining that approval is sufficient grounds for determination that an applicant is unsuitableas our advanced age physical infirmities mental impairment and adverse inference that might tempt the applicant to be unfaithful

25
Q

Selection of guardian by minor

A

A minor who is at least 12 may choose his own guardian if the court approves the choice and find the choice in the minors best interest

26
Q

Guardian for incapacitated adult

A

The surviving parent of an incapacitated adult may appoint by will or written declaration a guardian of the person of the incapacitated child after his or her death but only if the surviving parent is serving as guardian of the person of the incapacitated child

27
Q

Widows election will

A

If A spouse’s will purports to dispose of property owned by his spouse, the surviving spouse has an election either to assert his or her property rights in lieu of excepting any benefits under the will, or to relinquish any of the survivors rights in properly disposed of by the testator and except benefits given under the will

28
Q

Pretermitted children

A

There must be an after born child, not provided for or mentioned in Will, and some portion of the estate is left to someone other than the parent of the afterborn. If there is no provision for existing children or no existing children, then the after born child gets an intestate share of the portion of the estate not left to the parent of the after born child. If there is a provision for existing children, then the after born child gets a pro rata share of the aggregate amount left to the other children in similar fashion

29
Q

Rights and responsibilities of a life tenant

A

Taxes, maintenance, expenses, and repairs
No requirement by remaindermen to reimburse the life tenant for permanent improvement.
Life tenant has the right to all of the ordinary uses of the property except that he must not commit waste.
Not required to maintain insurance
Must protect the property from forfeiture

30
Q

Ademption

A

Absent A contrary intention expressed in the will, the alienation or disappearance of the subject matter of a specific bequest from the testator’s estate adeems the devise or bequest. Any proceeds received upon the disposition of the property by the testator pass under the residuary clause unless the will provides to the contrary

31
Q

Types of bequests

A

General, specific, demonstrative, residuary

32
Q

Abatement of property

A

Bequests abate in the following order
Property not disposed of by the will but passing by intestacy; personal property of the residuary estate; real property of the residuary estate; general bequests of personal property; general devises of real property; specific bequest of personal property; and specific devices of real property

33
Q

Benefits of a QSST

A

Avoid high trust income tax rates and take full advantage of a full run through beneficiaries graduated tax rate
Have the beneficiary pay tax on reinvested earnings used to grow the S Corporation
I love the beneficiary to sell less Corporation stock to the trust on what appears tax-free basis

34
Q

Married with common children intestate distribution

A

Community property all to surviving spouse
separate real property one third life estate for surviving spouse, remainder two children
other separate property surviving spouse one third in fee, remainder two children

35
Q

Single with children intestate distribution

A

100% in fee to children

36
Q

Gift tax base

A

Current year gifts less medical, educational, charitable, and marital deductions, plus prior taxable gifts

37
Q

Gift tax due

A

Current gift tax rate (40%) times gift tax base less current taxable gifts equals tentative tax. Reduce by available gift tax credit to determine gift tax due. Include GST tax due on direct skips in amount of gift

38
Q

Gross estate

A

2033 Property owned at death
2034 property in which the surviving spouse has dower courtesy or elective share rights
2035 transfers within three years of death
2036 transfers with retained life estate
2037 transfers with retained reversionary interest
2038 revocable transfers
2039 annuities and employee benefits
2040 property passing by right of survivorship
2041 General Power of Appointment
2042 Life Insurance
2043 Partial Consideration
2044 QTIP

39
Q

Married with different children intestate distribution

A

Surviving spouse retains community property interest, decedents community property interest to children
separate real property 1/3 life estate to surviving spouse, remainder to children
separate other property 1/3 in fee to surviving spouse remainder to children

40
Q

Married without children intestate distribution

A

All community property to surviving spouse
separate real property one half in fee to surviving spouse, one half divided among parents (one quarter moiety to each living parent; otherwise to siblings)
other separate property all to separate surviving spouse

41
Q

Estate Tax Calculation

A

Gross Estate
§2031 all property in which decedent had an interest
§2032 alternate valuation
§2032A alternate valuation for farm property
§2033 value of the gross estate shall include the value of all property to the extent of the interest therein of the decedent at the time of his death.
§2034 Dower or curtesy interests.
§2035 Adjustments for certain gifts made within 3 years of decedent’s death.
§2036 Transfers with retained life estate.
§2037 Transfers taking effect at death.
§2038 Revocable transfers.
§2039 Annuities.
§2040 Joint interests.
§2041 Powers of appointment.
§2042 Proceeds of life insurance.
§2043 Transfers for insufficient consideration.
§2044 Certain property for which marital deduction was previously allowed.
§2045 Prior interests.
§2046 Disclaimers.

Less Deductions 
§ 2053 Administration Expenses
§ 2054 Deduction for Casualty Losses
§ 2055 Charitable Deduction (Charitable Foundation)
§ 2056 Marital Deduction
§ 2056A QDOT
§ 2057 Family Business Interest

Equals Taxable Estate

Add back § 2001(b) Previous Adjusted Taxable Gifts

Equals Tentative Estate Tax Base

Calculate Tentative Estate Tax

Estate Tax Credits 
§ 2010 Unified Estate Tax Credit
§ 2011 Credit for State Death Taxes
§ 2012 Credit for Gift Taxes
§ 2013 Credit for Taxes on Prior Transfers
§ 2014 Credit for Foreign Death Taxes
Equals Federal Estate Tax
42
Q

Gross Estate

A

§2031 all property in which decedent had an interest
§2032 alternate valuation
§2032A alternate valuation for farm property
§2033 value of the gross estate shall include the value of all property to the extent of the interest therein of the decedent at the time of his death.
§2034 Dower or curtesy interests.
§2035 Adjustments for certain gifts made within 3 years of decedent’s death.
§2036 Transfers with retained life estate.
§2037 Transfers taking effect at death.
§2038 Revocable transfers.
§2039 Annuities.
§2040 Joint interests.
§2041 Powers of appointment.
§2042 Proceeds of life insurance.
§2043 Transfers for insufficient consideration.
§2044 Certain property for which marital deduction was previously allowed.
§2045 Prior interests.
§2046 Disclaimers.

43
Q

Estate Tax Deductions

A 
§ 2053 Administration Expenses
§ 2054 Deduction for Casualty Losses
§ 2055 Charitable Deduction (Charitable Foundation)
§ 2056 Marital Deduction
§ 2056A QDOT
§ 2057 Family Business Interest
44
Q

Estate Tax Credits

A 
§ 2010 Unified Estate Tax Credit
§ 2011 Credit for State Death Taxes
§ 2012 Credit for Gift Taxes
§ 2013 Credit for Taxes on Prior Transfers
§ 2014 Credit for Foreign Death Taxes
45
Q

Estate Tax Formula

A 
Gross Estate ( §2031 to §2046)
Less Deductions (§ 2053 to § 2057)

Equals Taxable Estate

Add back § 2001(b) Previous Adjusted Taxable Gifts

Equals Tentative Estate Tax Base

Calculate Tentative Estate Tax

Estate Tax Credits (§ 2010 to § 2014)

Equals Federal Estate Tax

46
Q

Gift Tax Calculation

A

Calculate the fair market value of all gifts, which is the price that a willing buyer and a willing seller would agree upon.

Subtract the following

  • Marital Deduction
  • Charitable Deductions
  • Annual Exclusion Available for each Donee
  • Unlimited Annual Exclusion for Payments to Providers of Educational or Medical Services for the Donee

Equals Taxable Gifts for current year.

Add Taxable Gifts from Prior Years
(Taxable gifts from prior years must be added because the gift tax is cumulative—the tax rate depends on the total value of gifts given over the donor’s lifetime.)

Equals Total Gift Value

Tentative Gift Tax = Total Gift Value × 40%,. the Applicable Tax Rate

Subtract the following
- Gift Taxes Paid or Deemed Paid
- Unified Tax Credit
Equals Total Tax Due

47
Q

Gift Tax Formula

A

FMV of all gifts

Subtract Deductions

  • Marital Deduction
  • Charitable Deductions
  • Annual Exclusion
  • Exclusion for Educational or Medical

Equals Taxable Gifts for current year.

Add Taxable Gifts from Prior Years

Equals Total Gift Value

Tentative Gift Tax = Total Gift Value × 40%,. the Applicable Tax Rate

Subtract the following

  • Gift Taxes Paid or Deemed Paid
  • Unified Tax Credit

Equals Total Tax Due

48
Q

Grantor Trust Code Provisions

A

§671 Trust income, deductions, and credits attributable to grantors and others as substantial owners.
§672 Definitions and rules.
§673 Reversionary interests.
§674 Power to control beneficial enjoyment.
§675 Administrative powers.
§676 Power to revoke.
§677 Income for benefit of grantor.
§678 Person other than grantor treated as substantial owner.
§679 Foreign trusts having one or more United States beneficiaries.

Texas Board of Legal Specialization Estate Planning Study Cards (2 decks)

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