Section 101 Unit 10 Flashcards Preview

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Flashcards in Section 101 Unit 10 Deck (20):
1

Property Settlement

Is considered to be a nontaxable exchange between the divorcing spouses.

2

Qualified Domestic Relations Orders

Should be used to divide qualified retirement plan assets among spouses at the time of divorce. Example 401K

3

Living Will AKA Advanced Directive

This document is drafted by individuals when in full capacity, giving personal directions to a physician regarding health care in the event of being severely disabled or suffering from a terminal illness

4

Durable Power of Attorney for Health Care AKA Health Proxy

This is a written document executed by one person, known as the principal, authorizing someone else, known as the agent or attorney in fact, to make medical decisions on the principal's behalf.

5

Durable Power of Attorney

Survives the principal's incapacity.

6

Nondurable Power of Attorney

Ceases when the principal's incapacity begins.

7

Revocable Living Trust

One use is appointment of a successor trustee to take over the client's property management in the even that he is no longer able to do so.

8

Durable Power of Attorney for Property

Similar to durable power of attorney for health, but it concerns the incapacitated person's property, rather than personal care.

9

Springing Power of Attorney

Becomes effective only upon the principal's legal incapacity

10

Nonspringing Power of Attorney

Becomes effective upon the date of execution of the power.

11

Palimony Agreement

Similar to a premarital agreement but is for domestic partners.

12

Special Needs Trust SNT

Permits individuals who meet the Social Security disability definition to maintain eligibility for certain public benefits, such as Medicaid, while at the same time preserving private assets to provide for services not available through public programs.

13

Settlement/Litigation Special Needs Trusts

This type of SNT is established with proceeds obtained on behalf of a disabled individual from a personal injury action.

14

Pooled Special Needs Trust

This category of SNT trust uses pooled assets for investment purposes and preserves Medicaid benefits for disabled individuals over age 65 whose own assets are used to fund the trust.

15

Third Party Special Needs Trust

A third party SNT is created by interested third parties to benefit a disabled individual.

16

Family Special Needs Trust

These types of SNT trust are used in traditional estate planning for families with disabled individuals.

17

Structured Settlement

Is a method of compensating a victim for injuries arising, in most cases, as a result of a personal injury lawsuit.

18

Compensatory Damages

Damages arising out of the personal injury lawsuit are considered only to make the injured party whole. Income tax free. Unless it's only a defamation of character then it's taxable.

19

Punitive Damages

Damages arising out of a personal injury lawsuit are intended to punish the tortfeasor for her acts. Taxable. Unless it's a wrongful death suit then it's income tax free.

20

Dependency Exemption

For income tax purposes is awarded to the parent who has custody of the children for the greater part of the calendar year.