Exam 3

Question 1

gifting

Answer 1

can gift up to 16,000 dollar per person per year to anybody you choose to give a gift to

Question 2

Estate Planning

Answer 2

• idea of how I want my assets to be distributed after I have passed on, is a legal process, it is required

Question 3

Codicil

Answer 3

how to make changes to our wills, minor changes no major changes

Question 4

beneficiary

Answer 4

the person who benefits from your death

Question 5

executor

Answer 5

individual who is carrying out the way that the will is written

Question 6

administrator

Answer 6

used if there is not a will

Question 7

Heir

Answer 7

your biological child that is entitled to money from your estate

Question 8

guardian

Answer 8

if you have children under the age of 18 you need to identify who is going to take care of your children that is this
-you have to say if you want to write someone out of your will

Question 9

Power of attorney medical

Answer 9

able to make medical decisions with and for the individual

Question 10

power of attorney financial

Answer 10

able to pay the bills and maintain the financial side with or without them, can write out checks

Question 11

Advanced Directive

Answer 11

another name for a living will, legal document, what your intentions are, executor has to carry this out

Question 12

Living will

Answer 12

not legally filed, what you intend have happen to you

Question 13

letter of last instruction

Answer 13

says what you want to have happen at the funeral

Question 14

estate tax

Answer 14

paid to the government based on the value of the entire estate before it is closed, the estate attorney pays this money up front

Question 15

inheritance tax

Answer 15

what the individual has to pay based on the inheritance usually 4% and goes up but travels from spouse-to-spouse tax free – most of time the estate will take care of this for you

Question 16

probate

Answer 16

process of being reported with the court, it is public, you do not have a will, lengthens the time to close an estate

Question 17

interstate

Answer 17

if you die without a legal will

Question 18

simple will

Answer 18

half goes to spouse and half to kids – how they are written

Question 19

Traditional Marital share

Answer 19

50-50

Question 20

Formal will

Answer 20

go to attorney signed notarized and finialed

Question 21

holographic will

Answer 21

video, or own handwriting

Question 22

statutory will

Answer 22

legal zoom fill in the blanks

Question 23

revokable trust

Answer 23

changes can be made

Question 24

irrevocable trust

Answer 24

cannot make changes ever

Question 25

403b

Answer 25

health services and nonprofits

Question 26

401k

Answer 26

by coporations

Question 27

401k

Answer 27

by corporations

Question 28

pensions

Answer 28

given to you in terms of education or union type jobs, different from retirement plans, everyone puts in the same dollar amount

Question 29

IRA

Answer 29

once you hit 59 and a half you can start pulling money from it, all about minimum required distribution

Question 30

tax deffered

Answer 30

401k, putting in money and pay taxes on it when you pull the money out

Question 31

tax exempt

Answer 31

put in money after already paying taxes and grows then takes money out does not have to pay taxes on it

Question 32

vested

Answer 32

goes toward 401k, remain with that same cooperation for 4 to 5 years, once you have met it any matching that they do is now considered your money

Question 33

annuity

Answer 33

regular monthly payments

Question 34

age retirement

Answer 34

65

Question 35

SS(FICA)

Answer 35

collect at 62 but get reduced benefit until 65, 70 get extra benefit

Question 36

incontestability clause

Answer 36

comes into play with estate planning, says within the first two years of taking out a policy with suicide or a crime then there will not be a payout

Question 37

Firm Life insurance

Answer 37

Life insurance is a contract between an insurer and a policyholder. A life insurance policy guarantees the insurer pays a sum of money to named beneficiaries when the insured policyholder dies, in exchange for the premiums paid by the policyholder during their lifetime. Life insurance is a legally binding contract

Question 38

whole life insurance

Answer 38

gives individuals and their families financial security; are also useful for businesses as a contingency plan for the loss of a key employee or partner

Question 39

actuary

Answer 39

the individual who calculates risks and give them a dollar value

Question 40

limit order

Answer 40

giving a specific dollar amount, a limit in which you are willing to spend, defined number

Question 41

market order

Answer 41

buying that share that day for that price at that moment

Question 42

common stock

Answer 42

gives you voting rights in shareholder meeting one vote per stock, give up rights to dividends

Question 43

preferred stock

Answer 43

guaranteed dividends, not able to vote the dividend is taxed

Question 44

proxy

Answer 44

will vote on share holders’ behalf will submit vote

Question 45

dividends

Answer 45

the dividend amount is either a stated amount of money for each share or preferred stock or a percentage of the par value, can be cumulative, is taxable as income on your tax return

Question 46

voting

Answer 46

when holding shares in a common stock the shareholder can vote in meetings

Question 47

closed end

Answer 47

no longer taking in new investors, can only get a share if a current investor sells off their shares

Question 48

open end

Answer 48

takes in new investors

Question 49

mutual fund

Answer 49

it is professionally managed, great for new holders

Question 50

IPO

Answer 50

initial public offering, when company comes to market for the first time it occurs on the primary market only selected to be able to buy them, money goes directly to the company

Question 51

primary market

Answer 51

IPOs occur

Question 52

secondary market

Answer 52

day two of trading New York stock exchange and Nasdaq- has 4 letters in their ticker symbol

Question 53

ticker symbol

Answer 53

how you identify a stock 3 or 4 letters could be less than 3

Question 54

components of a bond

Answer 54

principle or par value of $1,000 dollar

Question 55

coupon

Answer 55

interest rate, money you will pay twice a year