Term
|
Definition
The necessities, comforts,
and luxuries enjoyed or
desired by an individual
or family. |
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Term
average propensity
to consume |
|
Definition
The percentage of each
dollar of income, on
average, that a person
spends for current needs
rather than savings. |
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Term
|
Definition
The percentage of each
dollar of income, on
average, that a person
spends for current needs
rather than savings. |
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Term
|
Definition
Intangible assets, such
as savings accounts and
securities, that are acquired
for some promised future
return. |
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Term
|
Definition
Physical assets, such as real
estate and automobiles,
that can be held for either
consumption or investment
purposes. |
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Term
| According to the book, what is the median net worth for self-employed households? |
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Definition
|
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Term
| four main stages of an economic cycle |
|
Definition
Expansion
Recession
Depression
Recovery |
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Term
|
Definition
A state of the economy
in which the general price
level is increasing. |
|
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Term
| What is the formula for calculating Net Worth for an individual? |
|
Definition
| assets - debts = net worth |
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Term
|
Definition
| Money will always be worth less in the future |
|
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Term
|
Definition
| number of years to double the money = 72 / annual compound interest rate |
|
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Term
|
Definition
A fixed sum of money that
occurs annually. |
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Term
|
Definition
| the net worth is less than zero |
|
|
Term
| If you have money deposited at a federally insured institution, you have protection up to what dollar amount? |
|
Definition
$100,000,
which was temporarily increased to $250,000 |
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Term
|
Definition
is the definition of estate planning according to the book? The process of
developing a plan to administer and distribute your assets after death in a manner
consistent with your wishes and the needs of your survivors, while minimizing
taxes |
|
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Term
5 common estate-planning problems and the major cause or indicator of
each? |
|
Definition
Excessive Transfer costs - Taxes and estate administrative expenses
higher than necessary.
Lack of liquidity - Insufficient cash; not enough assets that are quickly
and inexpensively convertible to cash within a short period of time to
meet tax demands and other costs.
Improper disposition of assets - Beneficiaries receive the wrong asset, orthe proper asset in the wrong manner or at the wrong time.
Inadequate income at retirement Capital insufficient or not readily
convertible to income-producing status.
Inadequate income, if disabled H igh medical costs; capital insufficient
or not readily convertible to income-producing status; difficulty in
reducing living standards. |
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Term
| What is the difference between a gross estate and a probate estate? |
|
Definition
in a gross estate, all the property will be taxed upon your death – in a probate
estate all property can be transferred to another person. |
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Term
|
Definition
The situation that exists when a person dies without a valid
will |
|
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Term
|
Definition
| The person who makes a will that provides for the disposition of property at his or her death |
|
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Term
| Who is a personal representative? |
|
Definition
| The person who guides the disposition of the estate |
|
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Term
| Name the three main components to a valid will. |
|
Definition
• Provide a plan for distributing the testator’s assets according to his or her
wishes, the beneficiaries’ needs, and federal and state dispositive and tax laws
• Consider the changes in family circumstances that might occur after its
execution
• Be concise and complete in describing the testator’s desires |
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Term
|
Definition
| A document that legally modifies a will without revoking it. |
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