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53 Cards in this Set

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This comes into existence when a person dies
"estate of decedent"
has the responsibility of "processing" the estate
personal representative
The PR is this for all disputes including "looting" of house
"arbitrator"
responsibility to act in the best interest of the decedent's wishes
fiduciary responsibility
Is filed in probate court and is a public record
will
PR should never do this with estate funds and personal funds
"commingle"
Understand "Raymond + Vivian" blended family "problem"
Raymond had a will, so Mr. Sanford received an inheritance
"plan" to get the decedent's assets to his/her heirs with the least amount of expense/taxes/problems
estate planning
co-tenants have an undivided interest in the whole property and can sell or gift their interest to someone else during their life time without the permission of the other co-tenant. When the co-tenant dies, his/her interest goes to his/her heirs according to their will or law of intestate succession
tenants in common
co-tenants have an undivided interest in the whole property and can sell or gift their interest to someone else during their life time without the permission of the other co-tenant. When the co-tenant dies, his/her interest goes to the other joint tenant regardless of what their will states or regardless of the law of intestate succession. If a joint tenant sells or gifts their interest, the party receiving the interest is considered a tenant in common with the remaining owner.
joint tenants
this is a "joint tenants" between husband and wife where neither party can sell or gift their interest in the property without the permission of the other party
tenants by the entirety
Jones & Newton each own a one-half interest in certain real property as tenants in common. Jones' interest:

A. Will pass by operation of law to Newton on Jones' death
B. Will pass on Jones' death to Jones' heirs
C. May not be transferred during Jones' lifetime
B. Will pass on Jones' death to Jones' heirs
Jones & Newton each own a one-half interest in certain real property as joint tenants. Jones' interest:

A. Will pass by operation of law to Newton on Jones' death
B. Will pass on Jones' death to Jones' heirs
C. May not be transferred during Jones' lifetime
A. Will pass by operation of law to Newton on Jones' death
Jones & Newton, a married couple, own certain real property as tenants by the entirety. Jones' interest:

A. Will be subject to probate on Jones' death
B. Will pass on Jones' death to Jones's heirs
C. May not be transferred during Jones' lifetime without the permission of Newton, and will pass by operation of law to Newton on Jones' death
C. May not be transferred during Jones' lifetime without the permission of Newton, and will pass by operation of law to Newton on Jones' death
The mother of Jim and his sister Becky dies. Mom left Jim and Becky a house which they now own as joint tenants. Becky did not want this house and she decided, without the permission of brother Jim, to give her interest in the house to her Church ("The Rainbow Followers"). Assume Becky "deeds" her interest to the Church and notifies Jim of the transfer. While Jim is thinking about this he learns, one week later, that Becky has died in a violent rainstorm (ironically there is a beautiful rainbow after the storm). Who now owns the house?

A. Jim owns 100% of the house, and the Church is out of luck since Jim never gave his permission for this transfer.
B. The house is owned by the Church and Jim as joint tenants
C. The house is owned by the Church and Jim as tenants in common
D. The house is owned by Jim and Becky's heirs since Becky cannot give her interest away without Jim's permission
C. The house is owned by the Church and Jim as tenants in common
If you do not have a will, the state of Michigan, has a will for you called?
"law of intestate succession"
A man and woman are married, and have no children, and the man's parents are deceased. If the man dies without a will?
The wife inherits everything
A man and a woman are married, and have no children, and the man's parent(s) are alive. If the man dies without a will?
The wife receives the first $60,000, plus 1/2 of the balance of the estate. The surviving parent(s) receive the other 1/2
A man and woman are married, have a child or children. It does not matter if the parents are alive or not. If the man dies without a will?
The wife receives the first $60,000 plus 1/2 the balance of the estate. The children received the other 1/2
A man and woman are married and there is one child from the man's previous marriage. Assume the man dies without a will?
The wife inherits 1/2 of the estate (without the first $60,000) and the child receives the other 1/2 balance of the estate
by the head
per capita
by representation
per stirpes
"A decedent's will provided that the estate was to divide among the decedent's "heirs", per stirpes and not per capita. If there are two surviving children, and three grandchildren who are the children of a predeceased child at the time the will is probated, how will the estate be divided?

A. 1/2 to each surviving child
B. 1/3 to each surviving child and 1/9 to each grandchild
C. 1/4 to each surviving child and 1/6 to each grandchild
D. 1/5 to each surviving child and grandchild
B. 1/3 to each surviving child and 1/9 to each grandchild
"A decedent's will provided that the estate was to divide among the decedent's "heirs", per capita and not per stirpes. If there are two surviving children, and three grandchildren who are the children of a predeceased child at the time the will is probated, how will the estate be divided?

A. 1/2 to each surviving child
B. 1/3 to each surviving child and 1/9 to each grandchild
C. 1/4 to each surviving child and 1/6 to each grandchild
D. 1/5 to each surviving child and grandchild
D. 1/5 to each surviving child and grandchild
T/F?

You do not have to accept an inheritance.
True
an arrangement where title to property is transferred into a trust by a (1) grantor or settler, and the property is held by the (2) trustee, for the benefit of another, the (3) beneficiary
trust
2 good ways to avoid Probate?
1. Put property in joint name with kids
2. Put property in trust with kids as beneficiary
Generally an estate is liable for which debts owed by the decedent at the time of death?

A. All of the decedent's debts
B. Only debts secured by the decedent's property
C. All debts except "credit card" debt
D. None of the above
A. All of the decedent's debts
When a person dies, the name of the individual who has responsibility for administering and closing the decedent's estate is:

A. Personal Representative
B. Trustee or Fiduciary
C. Settlor or Grantor
D. None of the above
A. Personal Representative
Income taxed to owners, not business and owners: Yes

Limited Liability like a Corporation: No

File paperwork: No
Sole Proprietorship
Income taxed to owners, not business and owners: Yes

Limited Liability like a Corporation: No

File paperwork: No
Partnership
Income taxed to owners, not business and owners: Yes

Limited Liability like a Corporation: No

File Paperwork: Yes
Limited Partnership
Income taxed to owners, not business and owners: No

Limited Liability like a Corporation: Yes

File paperwork: Yes
"C" Corporation
Income taxed to owners, not business and owners: Yes

Limited Liability like a Corporation: Yes

File paperwork: Yes
LLC
"For which of the following reasons would the corporate veil most likely be pierced and the shareholders held personally liable"?

A. The corporation is a personal holding company
B. The corporation was organized because the shareholders wanted to limit their personal liability
C. The corporation and its shareholders do not maintain separate bank accounts and records
D. The corporation's sole shareholder is another domestic corporation
C. The corporation and its shareholders do not maintain separate bank accounts and records
"Which of the following statements is correct regarding a limited partnership?

A. The general partner must have made a capital contribution
B. It can only be created pursuant to a statute providing for the formation of limited partnerships
C. It can be created with limited liability for all partners
D. At least one general partner must also be a limited partner
B. It can only be created pursuant to a statute providing for the formation of limited partnerships
Which of the following rights would be a limited partner not be entitled to assert?

A. To have a formal accounting of partnership affairs whenever the circumstances render it just and reasonable
B. To have reasonable access to the partnership books and to inspect and copy them
C. To have the same rights as a general partner to a dissolution and winding up of the partnership
D. To be elected as a general partner by a majority vote of the limited partners in number and amount
D. To be elected as a general partner by a majority vote of the limited partners in number and amount
4 Reasons why LLC seems to be "popular" today?
1. Owned by "members" who all have limited liability
2. Professionals have unlimited liability for acts of malpractice
3. Can have unlimited members who can be taxed like a "S" corp
4. Combines the non-tax advantages of the corporation with the favorable tax advantages of the partnership
In general, which of the following must be contained in articles of incorporation?

A. The names of states in which the corporation will be doing business
B. The name of the state in which the corporation will maintain its principal place of business
C. The names of the initial officers and their terms of office
D. The classes of stock authorized for issuance
D. The classes of stock authorized for issuance
is responsible for policy decisions for the management of the corporation
board
6 Things that must be in Articles of Incorporation?
1. Name
2. Purpose
3. Resident Agent
4. Incorporators
5. Authorized stock
6. Other "special rules"
Absent a specific provision in its articles of incorporation, a corporation's board of directors has the power to do all of the following, except:

A. Repeal the bylaws
B. Declare dividends
C. Fix compensation of directors
D. Amend the articles of incorporation
D. Amend the articles of incorporation
3 Things that shareholders do?
1. Receive annual dividends if declared by the board of directors
2. Vote/elect directors
3. Not involved with management of corporation
What do shareholders do at annual meeting?
Vote for directors and vote on many major corporate changes. Also, may receive dividends if declared by board of directors
If successful with shareholder derivative action lawsuit?
fees are paid but any proceeds won go to corporation
A corporate stockholder is entitled to which of the following rights:

A. Elect officers
B. Receive annual dividends
C. Approve dissolution
D. Prevent corporate borrowing
C. Approve dissolution
4 Roles of Corporate Officers?
1. Are agents and fiduciaries of the corporation having actual and apparent authority to manage the business
2. May be removed by the board with or without cause
3. Are elected by directors
4. Officers are responsible to carry-out "board policy" and direction
Generally, officers of a corporation

A. May declare dividends or other distributions to shareholders as they deem appropriate
B. May be removed by the board of directors without cause only if the removal is approved by a majority vote of the shareholders
C. Are agents and fiduciaries of the corporation, having actual and apparent authority to manage the business
D. Are elected by the shareholders
C. Are agents and fiduciaries of the corporation, having actual and apparent authority to manage the business
Jeri Fairwell is executive vice-president and treasurer of Wonder Corp. She was named as a party in a shareholder derivative action in connection with certain activities she engaged in as a corporate officer. In the lawsuit, she was held liable for negligence in performance of her duties. Fairwell seeks indemnity from the Corp. The board of directors would like to indemnity her, but the articles of incorporation do not contain any provisions regarding indemnification of officers and directors. Indemnification:

1. Cannot include attorney's fees because Fairwell was found to have been negligent
B. Is not permitted because the articles of incorporation do not so provide.
C. Is permitted only if Fairwell is found not to have been grossly negligent
D. May be permitted by court order although Fairwell was found to be negligent
D. May be permitted by court order although Fairwell was found to be negligent
This applies to managers of information in "publicly" traded corporations, and imposes civil and criminal penalties for violation. The purpose of the law, in part, is to make sure there is complete and full disclosure of all relevant financial information
Sarbanes-Oxley Act of 2002
A consolidation of two corporations usually requires all of the following except:

A. Approval by the board of directors of each corporation
B. Receipt of voting stock by all stockholders of the original corp.
C. An affirmative vote by the holders of a majority of each corporations' voting shares
B. Receipt of voting stock by all stockholders of the original corp.
Which of the following must take place before a corp. may be voluntarily dissolved?

A. Unanimous vote of the shareholders
B. Approval by the officers of a resolution to dissolve
C. Passage by the board of directors of a resolution to dissolve
C. Passage by the board of directors of a resolution to dissolve
Sell goods overseas, must sign these saying you will pay
letters of credit