Ch 1: An Overview Flashcards Preview

Fundamentals of Estate Planning > Ch 1: An Overview > Flashcards

Flashcards in Ch 1: An Overview Deck (17):

What is “estate planning”?

Develop a plan that will enhance and maintain the financial security and wishes of a client upon his or her death or incapacity.


Estate planning is not just something that occurs upon your death but…

is intertwined with all your other life and financial goals.


What are the four main goals of “Estate Planning”?

1) Distribution
2) Management
3) Accumulation
4) Conservation


What is NOT primary purpose of estate planning?

To avoid taxes!


The Estate Planning Tax Systems is a unified tax system. that includes...

a) ______
b) ______
c) ______
d) ______

a) gift
b) estate
c) GSTT (Generation-skipping Transfer Tax)
d) QDOT (Qualified Domestic Trust)


What are the 6 estate planning process steps?

1) Data-gathering interview
2) Evaluation of existing estate plan
3) Development of estate plan
4) Client review and approval of plan
5) Implementation of plan (execution of documents and property transfers)
6) Periodic review of plan


What are the 2 reasons for not having a will or no having a plan in place?

1) not taking the time to think about who gets what and when.
2) some believe the state's succession statutes will be sufficient.


What happens without a "will"?

1) State Succession Laws determine where property goes
2) If no heirs – property escheats (eg - goes) to State
3) Cannot leave to charity or choose a personal representative


What are reasons a plan can be outdated?

1) Tax law changes or trust law changes
4) Birth and death of family members
5) New assets – digital assets


What are the impediments to estate planning?

a) Failure to Plan
b) Outdated Plan
c) Overlooking issues
d) Expenses and Time
e) Improper tax planning
f) Improper ownership of assets
g) Failure to plan for disability or illness
h) Failure to consider inflation
i) Lack of liquidity
j) Spousal Elective share due to poorly drafted will
k) Psychological factors


a) What is "Code of Hammurabi (1750 B.C.)"?
b) What is "Statute of Wills (1540) "?

a) intestate succession (eg - death with a will) could be altered to favor the eldest son
b) gave people the ability to dispose of property upon death (the property did not women, children, idiots, the insane).


Currently, the state of __________, is the only state in the U.S. that has a system of forced heirship to heirs other than the surviving spouse.



What is the foundation of American estate planning law?

English Common Law... (not civil law)


Who started taxing estates in the US?

US Government


What is "State Inheritance Taxation"?

An inheritance tax is a state tax that you pay when you receive money or property from the estate of a deceased person.


What is "Federal Transfer Taxes"?

The federal estate tax applies to the transfer of property at death.


What type of issues do digital assets present?

Digital assets present a lot of issues for traditional estate planning devices such as a will or trust because the ownership rights and transferability rights have to be determined in a service agreement.