Flashcards in Section 101 Unit 10 Deck (20):
Is considered to be a nontaxable exchange between the divorcing spouses.
Qualified Domestic Relations Orders
Should be used to divide qualified retirement plan assets among spouses at the time of divorce. Example 401K
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
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.
Durable Power of Attorney
Survives the principal's incapacity.
Nondurable Power of Attorney
Ceases when the principal's incapacity begins.
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.
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.
Springing Power of Attorney
Becomes effective only upon the principal's legal incapacity
Nonspringing Power of Attorney
Becomes effective upon the date of execution of the power.
Similar to a premarital agreement but is for domestic partners.
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.
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.
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.
Third Party Special Needs Trust
A third party SNT is created by interested third parties to benefit a disabled individual.
Family Special Needs Trust
These types of SNT trust are used in traditional estate planning for families with disabled individuals.
Is a method of compensating a victim for injuries arising, in most cases, as a result of a personal injury lawsuit.
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.
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.