Week 1 Reading - Test 1 - Sheet1 Flashcards Preview

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Flashcards in Week 1 Reading - Test 1 - Sheet1 Deck (52):
1

will and associated documentation

estate planning

2

written declaration of a person's intent to distribute property after his or her death

will

3

A will is a method by which (1) may be transferred

1. title to property

4

Wills are executed when (1) but are (2), meaning legally binding only upon the person's death. This means that until death the will is (3), and that property to be bequeathed to a (4) may be sold or given away while the person is alive.

1. the person is alive
2. ambulatory
3. revocable
4. beneficiary

5

One who executes a will

Testator

6

If someone dies without a will, they die (1). This means usually (2) will determine how and to whom all the property she possessed will be distributed.

1. intestate
2. intestate succession

7

If a person has a will, she can determine how (1), which include state, federal and in some states inheritance taxes, will be paid--out of which source. An (2) in a will allocates the tax burden of the beneficiaries in a will. Without it, distribution of taxes is determined by (3).

1. estate taxes
2. apportionment clause
3. state law

8

(1) a person who is appointed to care for and manage the minor person, minor's property, or both. Can be a (2) or a (3). Parents are always the (4) of the child but not necessarily of the (5).

1. guardian
2. guardian of the person (care and custody of child)
3. guardian of the property (care of property until child reaches majority/emancipation)
4. natural guardians
5. property

9

A trust is a legal agreement in which a person called the (1) transfers (2) of property to a (3). The trustee will then manage the property for (4).

1. settlor
2. legal title
3. trustee
4. beneficiaries

10

a trust which is drafted as part of the testator's will and only becomes effective upon the tesator's death. Prevents a live guardian, for example, from having to manage the trust for a deceased's children.

testamentary trust

11

person who administers the deceased's assets and carries out the terms of the will. Gathers assets, pays debts/taxes, distributes property according to wishes.

personal representative/executor (or administrator if appointed by court)

12

3 things real property (realty/real estate) includes

1. land (inc. airspace and area below surface of the land)
2. structures permanently affixed to the land (houses, offices, etc.)
3. objects attached ot the land or buildings (fixtures)

13

3 types of property included in real property

1. immovable property
2. fixed property
3. permanent property

14

objects that were once personal property but have become permanently attached to land or buildings (trees, AC units, ovens, etc.)

fixtures

15

all remaining property that is not realty--can be tangible (computer, painting) or intangible (checks, cash, stocks)

personal property

16

2 types of intangible property that jurisdictions may treat as tangible property

stamps, coins (collectible)

17

a form of intangible property--a persona right you retain when you do not possess the property, but have a right to recover in a lawsuit

chose in action

18

property (1) is owned solely by one person, either an individual perosn or an individual company and no others. Absolute ownership.

severally owned (property "in severalty")

19

two or more persons own property concurrently

joint ownership

20

4 types of joint ownership

1. joint tenancy
2. tenancy in common
3. tenancy by the entirety
4. community property

21

(1) is a form of ownership of property by two or more persons said to be joint tenants. The interest each holds at the inception of the initial possession is characterized by the (2), which are (3), (4), (5) and (6); all four are required for valid joint tenancy.

1. Joint tenancy
2. four unities of title
3. time
4. title
5. interest
6. possession

22

A unique concept of joint tenancy. Upon death of one tenant, his or her interest passes automatically to the surviving joint tenants

right of survivorship

23

Joint tenancy property is often called a (1) because the property automatically passes to the survivors as a (2).

1. non-probate asset
2. matter of law

24

A new tenant replacing a joint tenant with right of survivorship will be a (1) instead, and will not have (2). The other tenants will be (3).

1. tenant in common
2. right of survivorship
3. joint tenants with right of survivorship to each other (as before)

25

occurs when one of the four unities of joint tenancy is not present

tenancy in common

26

form of jointly owned property that requires the fourt unities of joint tenancy plus the unity of marriage. Both spouses are required to mortgage, sell or gift the property, and neither may sever the tenancy without written consent of the other. Not all states recognize this.

tenancy by the entirety

27

Pro of tenancy by the entirety

keep property out of reach of creditors (good for if one spouse has debts/loans)

28

a form of ownership of property between spouses. Generally all property acquired by a husband or a wife during marriage that is not classified as separate property

Community property

29

All property acquired prior to marriage or acquired during marriage by gift, will, inheritance or other means classified as separate by state statute

separate property

30

In a community property state, each spouse owns (1) and property acquired (2) is presumed community property. Upon death, the surviving spouse gets (3), and a spouse may not, under any circumstances, distribute more than (4).

1. half of the marital estate
2. during marriage (subject to proof that it is not part of estate)
3. his half (rest is passed by will/intestacy)
4. his half of the marital estate

31

4 advantages to joint tenancy

1. auto transfer of ownership upon death
2. no probate of that aset (no probate expenses)
3. joint management of property
4. immediate access to the asset by survivors

32

6 disadvantages to joint tenancy

1. disagreement on property management
2. unintended "inheritance" because property is not affected by the will
3. may destroy estate planning of the deceased (other tenants gain property, not beeneficiaries)
4. attachment by joint tenant's creditors
5. not affected by contract
6. potential tax consequences

33

total ownership of property; not subject to restrictions. Unless otherwise stated, all conveyances are presumed to create this

fee simple estate/fee simple absolute/estate in fee

34

While a fee simple estate is total ownership, more than one person may hold a (1) in the property.

1. fee interest

35

4 features of fee simple estate

1. fully transferable during the life of the owner
2. may be transferred by will
3. subject to the claims of creditors (before and after death of owner)
4. If it is not transferred by will, will pass through intestacy to the owner's heirs; subject to the rights of a surviving spouse

36

A (1) is the right of a person, called the (2), to use property until death.

1. life estate
2. life tenant

37

3 features of life estate

1. when owner dies, right to property ceases
2. no distribution via will
3. sale of property=only for life of owner

38

a life estate held for the life of another person

life estate pur autre vie

39

an interest retained by the grantor of a life estate that allows for the return of property to the grantor upon termination of the life estate

reversion/revisionary interest

40

A (1) occurs when a grantor gives a life estate to a life tenant and gives the rest to a future owner, someone other than himself or herself (called the (2)). Commonly used to (3).

1. remainder
2. remainderman
3. transfer property to children (as the remaindermen) so the property can be a non-probate asset ("poor man's will")

41

If a remainderman dies before the person whose life a life estate is based on, the remainder will (1).

1. pass to his estate upon the death of the other, and be distributed by will or by intestacy

42

In a (1), the time in which the tenant will hold the property is specifically designated. This is a form of (2), except the person has actual ownership.

1. tenancy for years
2. leasehold estate

43

All forms of property in a decedent's estate that require a probate court proceeding to distribute them to the proper beneficiaries or heirs. (includes will, intestacy)

1. Probate assets

44

Do not require any court proceedings to pass title from the decedent's estate to the beneficiaries or heirs. Not distributed by will or intestacy. Not subject to claims of decedent's creditors, spouse or children.

Non-probate assets

45

Two benefits of non-probate

1. property passes to beneficiaries more quickly
2. high cost of probate is greatly reduced

46

contract between insurance company and a person who purchases benefits; ins. co. will pay a named beneficiary a sum of money upon his death. Money is paid directly; no need for probate.

life insurance

47

Naming an (1) to a life insurance policy prevents non-probate assets from becoming probate assets

alternate beneficiary (in case original dies first)

48

savings accounts that a depositor (trustee) opens for the benefit of another (the beneficiary). During depositor's life, account may be used by depositor. Upon death, passes to beneficiary, no probate estate.

Pay-on-death account/Totten trust

49

As long as not testamentary, this is not part of a decedent's probate estate because it actually becomes effective during the decedent's lifetime. Any assets made part of it are non-probate assets.

trust

50

Life estates are neither (1) or (2) assets.

1. probate assets (no interest in property beyond death of named person)
2. non-probate assets (no interest remaining with estate)

51

Until there is only one remaining joint tenant with right of survivorship, no (1) is necessary to pass the deceased's interest to another.

1. probate proceeding

52

an enhanced life estate deed in which the holder of the life estate also retains the right to transfer the entire property including any reversionary or remainder interest, by sale or gift, without obtaining the consent of the owner of the revisionary holder or remainder interest (usually required--e.g., have to ask kids' permission to transfer property.) If property is transferred, remainder interest is destroyed. If life estate holder dies first, functions as traditional life estate.

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