Chapter 15 Personal Finance

Annuity

A contract purchased from an insurance company that provides for a sum of money to be paid to a person at regular intervals for a certain number of years for life

Living Will

A document in which you state whether you want to be kept alive by artificial means if you become terminally ill and unable to make such a decision

Codicil

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

Power of Authority

A legal document that authorizes someone to act on your behalf

Guardian

A person who accepts responsibility of providing children with personal care after their parents' death and managing the parents estate for the children until they reach a certain age

Beneficiary

A person you've named to receive a portion of your estate after your death

Assisted-living Facility (ALF)

A residence complex that pro-videos personal and medical services for the elderly

Individual Retirement Account (IRA)

A special account in which the person sets aside a portion of income for retirement

401 (k) Plan

Also known as a salary-reduction plan, you set aside a portion of your each paycheck to be deducted from your gross pay and placed in a special account

Keogh Plan

An H.R.10 plan or a self-employed retirement plan, is a retirement plan specially designed for self-employed people and their employees

Trust

An arrangement in which a designated person known as a trustee manages assets for the benefit of someone else

Estate

Consiats of everything you own

Executor

Someone who is willing and able to perform the task involved in carrying out your will

Defined-contribution Plan

Sometimes called an account plan, consist of an individual account for each employee to which the employer contributes a specific amount annually

Defined-benefit Plan

Specifies the benefits you'll receive at retirement age, based on your total earnings and years on the job

Will

The legal document that specifies how you want your property to be distributed after your death

Probate

The legal procedure of proving a valid will

Heirs

The people who will have the legal right to your assets when you die

Vesting

The point at which you become eligible to receive the employer's pension plan contribution s that you've gained, even if you leave the company before retiring

Estate Planning

The process of creating a detailed plan managing your assets so that you can make the most of them while you're alive and ensure that they're distributed wisely after you

Intestate

Your legal state of residence that will step in and control the distribution of your estate without regard or a valid will for any wishes you may have had