Unit 16 50 Facts Flashcards
Healthy Giving
Giving out of excess in your life
Unhealthy Giving
When giving is a method of gaining power over another.
Prepare for giving
Create a spending plan
Evaluate needs, wants and values
Assess your time
Plan for expenses, such as Christmas gifts
Avoid using credit for giving
Statement of Financial Position
Money Management Tools
Income & Expense Statement
Money Management Tools
Spending Plan
Money Management Tools
You are better off in a community than by yourself.
True
You are better off in a community than by yourself.
True
You are responsible for your present self and your future self.
True
Investment helps manage risk and allows you to cope with risk and uncertainty.
True
Gifts to charities
Gifts left to charity in will are free from inheritance tax.
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
Residuary gifts
everything left in estate after all debts, bills and taxes have been paid and specific and non specific gifts have been distributed
Non-specific gifts
does not refer to specific item. (all my personal possessions)
Specific gifts
particular item or property in an estate transferred to beneficiary on owner’s death. Specifics must be provided. (house, jewelery, etc.)
A tax-free gift of up to _____ per year can be given without being subjected to tax for giver or receiver
$10,000
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
A trust can be revocable, revoked or modified at any time or irrevocable, not modified or revoked unless by special permission of court to terminate it.
True
trust
an agreement that determines how a person’s property is to be managed and distributed during lifetime and upon death
Living Trust
Trust in which you assign the management of your assets to a trustee while you are living
Revocable 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
A Will or testament 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. It can also identify a preferred guardian for any surviving children.
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.
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
Executing the Will
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. The executor typically opens a bank account for this purpose.
Probate
a legal process that declares a will valid and ensures the orderly distribution of assets
Consequences of No Planning
May need a guardianship
Medical wishes may not be carried out
State Law via a public probate process decides who receives your assets and in what proportions
Court decides who raises your minor children
Heirs may unnecessarily incur estate taxes
a large estate is subject to estate taxes if ___
There is no surviving spouse
estate
the assets of a deceased person after all debts are paid.
Estate Planning
A clear and complete plan of what should happen upon your death
Living Will
A plan to care for someone who is young or incapacitated and cannot care for themselves
Trade-Offs
A trade-off is giving up one thing for another.
Estate Planning for Teens
Must be 18 in most states
Estate Planning for Teens
Letters are not legal documents
Estate Planning for Teens
Letters are preferred over conversation because they have a longer presence
Who can help with planning?
CPA & CFP
Who can help with planning?
Other professionals as needed
Who can help with planning?
Financial Institutions
Who can help with planning?
Attorneys
Teens are too Young to start
False
The first step to estate planning
an honest conversation
for help with estate planning
Seek out advice of professionals
What is the Final Act of Financial Well being
Estate planning
