Term
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Definition
| An estate plan is how you set up to administer and distribute your property during your life (gifts) or after your death |
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Term
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Definition
| A will is the legal declaration of a person’s mind as to the disposition of his or her property after death |
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Term
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Definition
-Simple or an “I love you” will leaves everything to your spouse
-Traditional marital share will leaves half to spouse, half to children of your issue or heirs
-Exemption trust will
-Stated dollar amount will
-May be better to use percentages than actual dollar amounts |
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Term
Formats of Wills
Holographic will |
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Definition
Formats of Wills
-Holographic will
-A hand-written will you prepare yourself
-May not be legal in some states |
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Term
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Definition
Formats of Wills
-Formal will
-Can be prepared by an attorney
-Can be typed or on a preprinted form
-Names beneficiaries
-Must be signed & have two witnesses |
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Term
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Definition
Formats of Wills
-Statutory will
-A type of formal will done on a preprinted form
-May be invalid if you change preprinted wording
-May not reflect current law |
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Term
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Definition
Intestate
-Means you die without a will
-The state distributes your assets |
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Term
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Definition
Probate
-Probate court generally validates wills and make sure your debts are paid |
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Term
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Definition
| Find out if an executor (or personal representative as we call it in Florida) is willing to accept this major responsibility |
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Term
| Responsibilities of an Executor |
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Definition
-Take control of assets of the estate
-File an inventory of assets and liabilities with the court
-Sell assets if necessary to pay liabilities |
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Term
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Definition
codicil
A document that modifies provisions in an existing will |
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Term
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Definition
Power of attorney
-Legal document authorizing someone to act on your behalf
-Can be limited or gives a great deal of power, use very carefully |
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Term
| Durable power of attorney for health care (advanced health care directive) |
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Definition
| -If you are unable to make decisions regarding your health care this authorizes someone to do it for you |
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Term
| Letter of Last Instruction |
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Definition
-Not legally enforceable
-Provides heirs with information
-Your funeral preferences
-Location of safe deposit box
-Assets and debts
-Social Security number
-Who gets personal effects |
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Term
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Definition
-Gifts up to $13,000 (2010) are exempt
-Gifts greater than exemption require gift tax return and estate impact (e.g. parents giving their kids title to the house) |
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Term
| The Rich Avoid Estate Tax Via |
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Definition
-Charitable bequests
-Trusts
-Marital exemption (A/B by-pass trusts)
-Family partnerships for appreciated property (land, farms, etc.)
-Insurance trusts |
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Term
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Definition
| trust is a legal arrangement through which a trustee holds assets for your benefit or that of your beneficiaries (before or after death) |
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Term
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Definition
-Marital-deduction trust (A/B trust)
-Living or Inter vivos trust
-Life insurance trust |
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Term
| Estate Taxes – Life Insurance |
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Definition
| Life insurance proceeds are excluded from federal INCOME tax, but ARE included in the taxable estate (a common misunderstanding) unless you have transferred policy outside of the estate |
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Term
| Joint Tenancy with Right of Survivorship |
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Definition
-Two or more own assets
-Title transfers to other owners at death without going through probate
-Overrides any provisions in the will
-NOT a substitute for a will |
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Term
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Definition
-Allowed in 30 states, you each hold real estate in full, neither can transfer while alive without others permission
-Only legally married couples qualify |
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Term
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Definition
-Multiple individuals own a proportionate interest in a property, your share goes into your estate
-Individuals can own different %
-Subject to probate |
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Term
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Definition
-AZ, CA, ID,LA,NM,NV,TX, WA (WS similar)
-Property acquired by a couple during marriage is equally owned
-Separate property excluded |
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