Chapter 2: Basic Estate Planning Documents

Question 0

What is an advanced medical directive?

Answer 0

A legal document expressing an individual’s last wishes regarding life sustaining treatment

Question 1

Who is the administrator?

Answer 1

A person, usually a relative of the deceased, appointed by the probate court to oversee the probate process when an executor is not named in the will.

Question 2

Ancilliary probate

Answer 2

A probate process conducted in a state other than the state of the decedents domicile

Question 3

Appointment of executor clause

Answer 3

A clause in a will that identifies the executor and any successor executor. This clause may also define the extent of the executors powers and may grant specific or general powers

Question 4

Attestation clause

Answer 4

Witness clause stating that the testator is of sound mind and that he signed the document in the witness’ presence

Question 5

Attorney in Fact

Answer 5

Agent or power holder of a power of attorney

Question 6

Bequest clause

Answer 6

Directs the distribution of property, whether cash, tangible property, intangible property or real property

Question 7

Codicil

Answer 7

A document that amends a will. A codicil is a prepared subsequent to and separate from the will to modify or explain the will

Question 8

Contingent legatee clause

Answer 8

A clause in a will that names a secondary person to inherit if the original legatee is dead or disclaims the property

Question 9

Declaration clause

Answer 9

A clause in a will which states this is the last will and testament of the testator

Question 10

Disclaimer

Answer 10

An heir or legatee’s refusal to accept a gift or bequest. This disclaimer allows assets to pass to other heirs or legatees without additional transfer tax

Question 11

Domicile

Answer 11

Where one lives and intends to remain. The location of ones home

Question 12

Durable feature

Answer 12

Allows a power of attorney to survive incapacity and/or disability

Question 13

Escheat

Answer 13

The reversion of an heirless, intestate decendents property to the state

Question 14

Executor

Answer 14

Estate representative designated in the will by the decedent. An executor may serve without bond if the bond is waived by the decedent.

Question 15

Felonious homicide statute

Answer 15

Statute that prevents heirs who feloniously participated in the decedents death from inheriting via the will or state testacy laws

Question 16

Forced heirship

Answer 16

A state requirement that a certain portion of the decedents estate be transferred to a spouse and, in some instances, children.

Question 17

Guardianship clause

Answer 17

A clause in a will which allows the testator to identify an individual(s) to raise any minor children.

Question 18

Holographic will

Answer 18

Handwritten will

Question 19

Intestacy

Answer 19

To die without a valid will or to die with a will that does not distribute all property

Question 20

Introductory clause

Answer 20

A clause in a will which identifies the testator.

Question 21

Joint will

Answer 21

One will executed by two or more individuals jointly that transfers their common interest in property.

Question 22

Living will

Answer 22

Legal document expressing an individual’s last wishes regarding life sustaining treatment.

Question 23

Mutual will

Answer 23

Two or more identical wills that leave all assets to the reciprocal party.

Question 24

No-Contest clause

Answer 24

A clause in a will that discourages heirs from contesting the will by substantially decreasing or eliminating bequests to them if they file a formal legal contest to the will.

Question 25

Nuncupative will

Answer 25

Oral will consisting of dying declarations

Question 26

Overqualified

Answer 26

A decedents taxable estate is less than the applicable estate tax credit equivalency, usually the result when too many assets pass to a surviving spouse.

Question 27

Per capita

Answer 27

Sometimes called “by the head” allows the deceased persons heirs to move into the generational slot of the deceased heir and inherit accordingly.

Question 28

Per stirpes

Answer 28

Sometimes called “taking by representation” directs that the deceased persons designated share of an estate is transferred to his heirs

Question 29

Power of Attorney

Answer 29

Legal document that authorizes an agent to act on a principals behalf

Question 30

Power of Attorney for Property

Answer 30

A special power of attorney designed for a specific purpose.

Provides an agent to manage a principals property and finances.

Question 31

Principal

Answer 31

The grantor giver of a power of attorney

Question 32

Reciprocal will

Answer 32

Two or more identical wills that leave all assets to the reciprocal party

Question 33

Residuary clause

Answer 33

A clause in a will which directs the transfer of the balance of any assets not previously bequeathed or distributed.

Question 34

Self proving clause

Answer 34

A clause in a will which involves the notary signing a notarized declaration that he/she witnessed the testator and witnesses sign the will.

Question 35

Side instruction letter

Answer 35

Also known as a personal instruction letter, details the testators wishes regarding the disposition of tangible possessions, the distribution of the decedents body, and funeral arrangements. It is not legally binding but generally followed

Question 36

Simultaneous death clause

Answer 36

A clause in a will that establishes a presumption of which person died first in a simultaneous death situation

Question 37

Situs

Answer 37

The place, generally referring to the state, where property is located.

Question 38

Sound mind

Answer 38

A persons mental capacity

Question 39

Springing power

Answer 39

The agents power “springs” into existence upon some defined event of determination

Question 40

Statutory will

Answer 40

A will meeting state statutes generally drawn up by an attorney and signed in the presence of a witness

Question 41

Survivorship clause

Answer 41

A clause in a will requiring that the legatee survive for a specific period in order to inherit under the will. The bequest will qualify for the marital deduction in the property transfers to the surviving spouse and the time period of the survivorship clause is 6 months or less

Question 42

Sweetheart will

Answer 42

Two wills executed by spouses that leave all assets to the other spouse

Question 43

Tax-Appointment clause

Answer 43

A clause in a will directing which assets will bear he payment of any debts an estate taxes

Question 44

Testate

Answer 44

When a decedent dies with a valid will

Question 45

Testator

Answer 45

Writer of a will

Question 46

Will

Answer 46

A legal document that provides the testator the opportunity to control the distribution or property, appoint an executor and avoid the states intestacy law distribution scheme.

Question 47

What are some advantages of wills?

Answer 47

Select and executor
Transfer assets
Designate a guardian for minor children
Transfer assets to designated charity
Maximize the utilization of marital deduction
Direct that certain people don’t receive inheritance
Implement provisions to minimize estate tax burden
Direct the payment of estate tax

Question 48

What are some limitations of wills?

Answer 48

Potential of a will contest

Certain restrictions in some courts

Assets that transfer automatically or by law supersede the the will

Poorly drafted will may have conflicting transfers or nonexistent property which may cause the will to become invalid

Question 49

How can you revoke a will?

Answer 49

Destroy the will, either by shredding it or burning it

Create a new will specifically revoking the previous will

Question 50

What is a divorce statute?

Answer 50

Statute that invalidates any provisions in a will that leave assets to a former spouse.

Question 51

Anti-Lapse statute

Answer 51

Some states have statutes that will presume that if a close relative, like a child or sibling, is not alive when the testator dies the testator would have wanted bequests to those individuals to pass directly to their heirs

Does not apply to gifts to friends, or distant relatives

Question 52

What is the General Power of Attorney?

Answer 52

Broadest power a person can give another.

They will be able to act in the principals place as though he is the principal.

May be revoked by the principal at any time.

Automatically revoked at principals death.

Question 53

What is the General Power of Appointment?

Answer 53

If the agent dies before the principal and is holding a general power of appointment over assets of the principal, the agent’s gross estate will include the FMV of the principals assets.

Question 54

What is a Limited Power of Attorney?

Answer 54

Gives the agent very specific, detailed powers.

Question 55

Do Not Resuscitate Order (DNRs)

Answer 55

This document declares the principals wish to avoid having CPR preformed in the event that their heart stops beating.

Avoid life sustaining treatment.