FIN 419 Ch. 19

Health Care Proxy

AKA durable power of attorney, legal document authorizing someone to act on your behalf in regards to your healthcare

Letter of last instruction

after death wishes, not legally enforceable in some states, provides heirs with information

Prenuptial agreement

agreed upon prior to marriage, often waive a right to receive property under the other's will or under state law, agree on a settlement if you should divorce.

Community property

any property that has been acquired by either spouses during the marriage, but not by gift, bequest or inheritance

Guardian

assumes responsibility for providing the children with personal care and managing the estate for them

Irrevocable trust

cannot change the terms or end the trust, trust becomes a separate entity for tax purposes. Used to reduce estate taxes and avoids probate

Estate Planning

definite plan for the administration and disposition of one's property during one's lifetime and at one's death

Codicil

document that explains, adds or deletes provisions in your existing will

Intestate

dying without a will. State law will determine distribution of assets

Executor

follows the instructions in the will, takes control of assets of the estate, files an inventory with the court, liquidates assets to pay claims, distributes assets based on instructions, makes a final accounting to the court

Social Media Will

helps determine what happens to the online content/identity that you created once you die, can appoint an online executor

Simple Will

leaves everything to your spouse

Traditional marital share will

leaves half to spouse and half to children/heirs. Avoids probate.

Trust

legal arrangement through which a trustee holds your assets for your benefits or that of your beneficiaries

Will

legal declaration of a person's mind as to the disposition of his/her property after death

Exemption trust will

passes to your spouse except for an amount equal to the exemption, which passes into a trust. Trust can provide lifelong income

Formal will

prepared with attorney's assistant. Must sign and have 2 witnesses, neither of whom can be beneficiaries

Joint Ownership

property will automatically pass to your spouse upon your death with no estate tax paid at the first death. Estate tax is paid when the surviving spouse dies

Living Will

provides for your wishes if you become physically or mentally disabled, discuss with family and doctor, sign and date before two witnesses, give copies to those closest to you

Revocable trust

retain the right to end the trust or change its terms during your lifetime. Does not provide shelter from federal or state estate taxes

Stated dollar amount will

states where a specific amount of money should go (ex: scholarship fund)

Statutory will

type of formal will on a pre-printed form. Has rigid provisions, may not meet current laws, and may be invalid if you change provisions

Holographic will

will that you write, date and sign, entirely in your handwriting. May not be recognized in some states