1.answers Estate Planning Process And Goals

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1. The three central focuses of estate planning are

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the accumulation, conservation, and distribution of an estate.

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2. Two methods by which an estate or parts of an estate are transferred during the owner's lifetime

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sale and by gift

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Two methods by which an estate or parts of an estate are transferred at the owner's death

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probate and by will substitute.

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estate transfer:

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the act by which property interests that are part of the estate of one person are conveyed to another person; this may occur either during the person's lifetime or at the person's death

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donor and donee

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the parties to a gift; respectively, the person who makes a gift and the person to whom a gift is made

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will substitute

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the term for several methods that transfer a person's estate at death outside of probate, because those methods (survivorship, contract, living trust provision, etc.) are recognized as superseding that person's will and the intestate succession laws

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right of survivorship

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the legally enforceable claim of the survivor of a deceased person to the property of the deceased; a distinguishing characteristic of joint tenancy and tenancy by the entirety; a widely recognized form of will substitute

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beneficiary designation

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a contractual provision usually found in insurance policies, annuities, pension plans, and IRAs, etc., that indicates the person who is entitled to receive the proceeds upon another person's death; a widely recognized form of will substitute

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probate:

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the legal process of administering that portion of a decedent's estate that is disposed of by either the decedent's will or the state laws of intestate succession

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testacy (testate)

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the condition that results from a person's dying after having made and left a valid will; also used to describe a person who dies and leaves a valid will

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intestacy (intestate):

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the condition that results from a person's dying without leaving a valid will; also used to describe a person who dies without leaving a valid will; can also occur when a person has a valid will that does not dispose of all of the testor's probate property; this latter situation is known as partial intestacy

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intestate succession

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state statutes governing the distribution of probate property at death that is not distributed by the decedent's valid will, if any

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6. Explain the key difference between the terms in each of the following pairs:

testacy (testate) and intestacy (intestate

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The former is the condition of dying with a valid will, while the latter is the condition of dying without a valid will (or with a will that fails to dispose of all probate property).

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survivorship and succession

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Both indicate a method by which a person receives property from a decedent; however, the former is by operation of law and outside probate, while the latter is through probate

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will and will substitute

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Both are methods by which assets are transferred upon a person's death; however, assets transferred by the former must go through probate, while assets transferred by the latter do not

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donor and donee

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These represent the two parties to a gift; the former is the person who makes the gift, and the latter is the person who receives and accepts the gift.

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7. Identify the consequences of dying without a will or will substitutes that control the disposition of the decedent's property

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If a person dies without a will or will substitutes controlling the distribution of his or her assets at death, the state intestate succession statute will apply. Therefore, the property may not be distributed according to the decedent's wishes, especially if the person the decedent wanted to benefit is not a relative. Furthermore, if there are no relatives of the decedent with the degree of relationship specified by the intestate succession statute, the property will escheat to the state

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Descriptions:

estate:

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the rights, titles, or interests that a person, living or deceased, has in any property

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real property (realty

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land and whatever is growing on or affixed to it (i.e., real estate

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tangible personal property (personalty)

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anything that can be owned that is not land or an interest in land, is touchable, and derives its value from its physical existence (e.g., furniture, art, collectibles, etc.)

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tangible personal property (personalty)

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anything that can be owned that is not land or an interest in land, is touchable, and derives its value from its physical existence (e.g., furniture, art, collectibles, etc.)

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intangible personal property (personalty)

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anything that can be owned that is not land or an interest in land, is not touchable, and derives its value from that which it represents or the rights that it confers (e.g., promissory note, shares of stock, bonds, etc.)

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present interest

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an interest in which the right of use, enjoyment, and/or possession of property is immediate and unrestricted

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future interest:

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an interest in which the right of use, enjoyment, and/or possession of property is postponed until some future time or until the occurrence of some specified event

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estate planning:

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the process of planning for the accumulation, conservation, and distribution of an estate to most efficiently and effectively accomplish tax and nontax objectives

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vested interest

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a property interest that is certain to occur because it is not contingent on any future event other than the mere passage of time

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10. Explain the key similarities and differences between the terms in each of the following pairs:

real property and personal property

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The former refers to land and improvements on the land, while the latter refers to any other type of property.