Week 1 Reading - Test 1 - Sheet1

Question 1

will and associated documentation

Answer 1

estate planning

Question 2

written declaration of a person’s intent to distribute property after his or her death

Answer 2

will

Question 3

A will is a method by which (1) may be transferred

Answer 3

1. title to property

Question 4

Wills are executed when (1) but are (2), meaning legally binding only upon the person’s death. This means that until death the will is (3), and that property to be bequeathed to a (4) may be sold or given away while the person is alive.

Answer 4

1. the person is alive
2. ambulatory
3. revocable
4. beneficiary

Question 5

One who executes a will

Answer 5

Testator

Question 6

If someone dies without a will, they die (1). This means usually (2) will determine how and to whom all the property she possessed will be distributed.

Answer 6

1. intestate

2. intestate succession

Question 7

If a person has a will, she can determine how (1), which include state, federal and in some states inheritance taxes, will be paid–out of which source. An (2) in a will allocates the tax burden of the beneficiaries in a will. Without it, distribution of taxes is determined by (3).

Answer 7

1. estate taxes
2. apportionment clause
3. state law

Question 8

(1) a person who is appointed to care for and manage the minor person, minor’s property, or both. Can be a (2) or a (3). Parents are always the (4) of the child but not necessarily of the (5).

Answer 8

1. guardian
2. guardian of the person (care and custody of child)
3. guardian of the property (care of property until child reaches majority/emancipation)
4. natural guardians
5. property

Question 9

A trust is a legal agreement in which a person called the (1) transfers (2) of property to a (3). The trustee will then manage the property for (4).

Answer 9

1. settlor
2. legal title
3. trustee
4. beneficiaries

Question 10

a trust which is drafted as part of the testator’s will and only becomes effective upon the tesator’s death. Prevents a live guardian, for example, from having to manage the trust for a deceased’s children.

Answer 10

testamentary trust

Question 11

person who administers the deceased’s assets and carries out the terms of the will. Gathers assets, pays debts/taxes, distributes property according to wishes.

Answer 11

personal representative/executor (or administrator if appointed by court)

Question 12

3 things real property (realty/real estate) includes

Answer 12

1. land (inc. airspace and area below surface of the land)
2. structures permanently affixed to the land (houses, offices, etc.)
3. objects attached ot the land or buildings (fixtures)

Question 13

3 types of property included in real property

Answer 13

1. immovable property
2. fixed property
3. permanent property

Question 14

objects that were once personal property but have become permanently attached to land or buildings (trees, AC units, ovens, etc.)

Answer 14

fixtures

Question 15

all remaining property that is not realty–can be tangible (computer, painting) or intangible (checks, cash, stocks)

Answer 15

personal property

Question 16

2 types of intangible property that jurisdictions may treat as tangible property

Answer 16

stamps, coins (collectible)

Question 17

a form of intangible property–a persona right you retain when you do not possess the property, but have a right to recover in a lawsuit

Answer 17

chose in action

Question 18

property (1) is owned solely by one person, either an individual perosn or an individual company and no others. Absolute ownership.

Answer 18

severally owned (property “in severalty”)

Question 19

two or more persons own property concurrently

Answer 19

joint ownership

Question 20

4 types of joint ownership

Answer 20

1. joint tenancy
2. tenancy in common
3. tenancy by the entirety
4. community property

Question 21

(1) is a form of ownership of property by two or more persons said to be joint tenants. The interest each holds at the inception of the initial possession is characterized by the (2), which are (3), (4), (5) and (6); all four are required for valid joint tenancy.

Answer 21

1. Joint tenancy
2. four unities of title
3. time
4. title
5. interest
6. possession

Question 22

A unique concept of joint tenancy. Upon death of one tenant, his or her interest passes automatically to the surviving joint tenants

Answer 22

right of survivorship

Question 23

Joint tenancy property is often called a (1) because the property automatically passes to the survivors as a (2).

Answer 23

1. non-probate asset

2. matter of law

Question 24

A new tenant replacing a joint tenant with right of survivorship will be a (1) instead, and will not have (2). The other tenants will be (3).

Answer 24

1. tenant in common
2. right of survivorship
3. joint tenants with right of survivorship to each other (as before)

Question 25

occurs when one of the four unities of joint tenancy is not present

Answer 25

tenancy in common

Question 26

form of jointly owned property that requires the fourt unities of joint tenancy plus the unity of marriage. Both spouses are required to mortgage, sell or gift the property, and neither may sever the tenancy without written consent of the other. Not all states recognize this.

Answer 26

tenancy by the entirety

Question 27

Pro of tenancy by the entirety

Answer 27

keep property out of reach of creditors (good for if one spouse has debts/loans)

Question 28

a form of ownership of property between spouses. Generally all property acquired by a husband or a wife during marriage that is not classified as separate property

Answer 28

Community property

Question 29

All property acquired prior to marriage or acquired during marriage by gift, will, inheritance or other means classified as separate by state statute

Answer 29

separate property

Question 30

In a community property state, each spouse owns (1) and property acquired (2) is presumed community property. Upon death, the surviving spouse gets (3), and a spouse may not, under any circumstances, distribute more than (4).

Answer 30

1. half of the marital estate
2. during marriage (subject to proof that it is not part of estate)
3. his half (rest is passed by will/intestacy)
4. his half of the marital estate

Question 31

4 advantages to joint tenancy

Answer 31

1. auto transfer of ownership upon death
2. no probate of that aset (no probate expenses)
3. joint management of property
4. immediate access to the asset by survivors

Question 32

6 disadvantages to joint tenancy

Answer 32

1. disagreement on property management
2. unintended “inheritance” because property is not affected by the will
3. may destroy estate planning of the deceased (other tenants gain property, not beeneficiaries)
4. attachment by joint tenant’s creditors
5. not affected by contract
6. potential tax consequences

Question 33

total ownership of property; not subject to restrictions. Unless otherwise stated, all conveyances are presumed to create this

Answer 33

fee simple estate/fee simple absolute/estate in fee

Question 34

While a fee simple estate is total ownership, more than one person may hold a (1) in the property.

Answer 34

1. fee interest

Question 35

4 features of fee simple estate

Answer 35

1. fully transferable during the life of the owner
2. may be transferred by will
3. subject to the claims of creditors (before and after death of owner)
4. If it is not transferred by will, will pass through intestacy to the owner’s heirs; subject to the rights of a surviving spouse

Question 36

A (1) is the right of a person, called the (2), to use property until death.

Answer 36

1. life estate

2. life tenant

Question 37

3 features of life estate

Answer 37

1. when owner dies, right to property ceases
2. no distribution via will
3. sale of property=only for life of owner

Question 38

a life estate held for the life of another person

Answer 38

life estate pur autre vie

Question 39

an interest retained by the grantor of a life estate that allows for the return of property to the grantor upon termination of the life estate

Answer 39

reversion/revisionary interest

Question 40

A (1) occurs when a grantor gives a life estate to a life tenant and gives the rest to a future owner, someone other than himself or herself (called the (2)). Commonly used to (3).

Answer 40

1. remainder
2. remainderman
3. transfer property to children (as the remaindermen) so the property can be a non-probate asset (“poor man’s will”)

Question 41

If a remainderman dies before the person whose life a life estate is based on, the remainder will (1).

Answer 41

1. pass to his estate upon the death of the other, and be distributed by will or by intestacy

Question 42

In a (1), the time in which the tenant will hold the property is specifically designated. This is a form of (2), except the person has actual ownership.

Answer 42

1. tenancy for years

2. leasehold estate

Question 43

All forms of property in a decedent’s estate that require a probate court proceeding to distribute them to the proper beneficiaries or heirs. (includes will, intestacy)

Answer 43

1. Probate assets

Question 44

Do not require any court proceedings to pass title from the decedent’s estate to the beneficiaries or heirs. Not distributed by will or intestacy. Not subject to claims of decedent’s creditors, spouse or children.

Answer 44

Non-probate assets

Question 45

Two benefits of non-probate

Answer 45

1. property passes to beneficiaries more quickly

2. high cost of probate is greatly reduced

Question 46

contract between insurance company and a person who purchases benefits; ins. co. will pay a named beneficiary a sum of money upon his death. Money is paid directly; no need for probate.

Answer 46

life insurance

Question 47

Naming an (1) to a life insurance policy prevents non-probate assets from becoming probate assets

Answer 47

alternate beneficiary (in case original dies first)

Question 48

savings accounts that a depositor (trustee) opens for the benefit of another (the beneficiary). During depositor’s life, account may be used by depositor. Upon death, passes to beneficiary, no probate estate.

Answer 48

Pay-on-death account/Totten trust

Question 49

As long as not testamentary, this is not part of a decedent’s probate estate because it actually becomes effective during the decedent’s lifetime. Any assets made part of it are non-probate assets.

Answer 49

trust

Question 50

Life estates are neither (1) or (2) assets.

Answer 50

1. probate assets (no interest in property beyond death of named person)
2. non-probate assets (no interest remaining with estate)

Question 51

Until there is only one remaining joint tenant with right of survivorship, no (1) is necessary to pass the deceased’s interest to another.

Answer 51

1. probate proceeding

Question 52

an enhanced life estate deed in which the holder of the life estate also retains the right to transfer the entire property including any reversionary or remainder interest, by sale or gift, without obtaining the consent of the owner of the revisionary holder or remainder interest (usually required–e.g., have to ask kids’ permission to transfer property.) If property is transferred, remainder interest is destroyed. If life estate holder dies first, functions as traditional life estate.

Answer 52

Lady Bird Deed