Chpt. 15 Retirement And Estate Planning

Power Of Attorney

A legal document, authorizes another person to act on your behalf in your absence.

Defined-Contribution

A minimum contribution made by both employer and employee; no particular benefit is promised.

Intestate

A person who dies without having a valid will.

SEP

A retirement plan for small businesses, similar to that for self-employed individuals.

Estate

All a person owns, less debts owed, at the time of the person's death.

Vested

Certain number of years or other condition of employment has passed.

Defined-Benefit

Contract specifies the benefits promised to the employee at normal retirement age.

Probate

Court Process of paying debts and distributing property to heirs.

Estate(2)

Levied by the federal government on the transfer of property at death.

Heirs

People entitled to receive the property or assets from another person who has died.

Testator

Person who makes or draws a will.

401(k)

Plan available through companies that operate for a profit; taxes are deferred until the money contributed is withdrawn.

403(b)

Plan for employees of government or not-for-profit organizations; taxes are deferred until the money contributed is withdrawn.

Estate Planning

Process of planning for the administration and transfer of property during one's lifetime and at one's death.

Reverse Mortgage

Provides homeowner with tax-free income in the form of a loan to be paid back when the property is sold.

Keogh

Self-employed individuals and their employees contribute to.

IRA

Tax-sheltered retirement plan to which working people make annual contributions of up to $5,000 per year.

Codicil

Used to make small changes to an existing will.

Holographic

Will is one written in a person's own handwriting.