Estate Planning Notes Exam 1

Front 1

Marital Property Regime

Back 1

Systems of property ownership between spouses providing for the creation or absence of a marital estate, and if created, what properties are included in the estate, how it is managed, and how it will be divided at end of the marriage

Front 2

Declaration of Separateness

Back 2

Prevents interests, dividends, rents and royalties that flow from separate property after a marriage from becoming community property

Need not be signed by other spouse, but they must receive notice

Front 3

Probate Property

Back 3

Property subject to a will; if no will exists, it passes via state intestacy laws

Front 4

Usufruct

Back 4

Right of enjoyment, enabling a holder to derive profit or benefit from property that either is titled to another person or which is held in common ownership, as long as the property is not damaged or destroyed

Front 5

Forced Heirship

Back 5

Any child under 23 years of age
Any age are permanently incapable of handling estate

-25% of estate if one force heir
-50% of estate if more than one

Each forced heir receives the lesser of an equal proportion of the legitime or what they would have received through intestacy

Front 6

LA Methods of Disinheritance

Back 6

(1) Hand raised to strike or actually strike parent (not just a threat)
(2) Cause grievous injury to parent; cruel treatment
(3) Attempt to kill parent
(4) Wrongfully accusing parent of committing crime which can result in life imprisonment or death
(5) Used act of violence of coercion to prevent in making a will
(6) Minor child married without consent
(7) Child convicted of a crime that can result in life imprisonment or death
(8) Child refuses to speak to parent for a period of at least 2 years

Front 7

Principles of Ethics

Back 7

(1) Integrity
(2) Objectivity
(3) Fairness
(4) Competence
(5) Diligence
(6) Confidentiality

Front 8

Other Principles of Ethics

Back 8

(1) Mentoring
(2) Communicating
(3) Courtesy

Front 9

CFP Ethics Complaint Process

Back 9

(1) Request for Investigation/Determine if Case
(2) Written Notice Sent; 30 days to respond
(3) Second Notice Sent; 20 days to respond
(4) Formal Complaint Filed; 20 days to respond
----If no response, allegations are deemed true; revocation of CFP marks
(6) Hearing Panel
----3 member board; at least 2 CFPs
(7) Commission Decides
(8) Appeals

Front 10

CFP Ethics Punishments

Back 10

(1) Private Written Censure
(2) Public Admonition
(3) Suspension of CFP License up to 5 years
(4) Permanent Revocation of License

Front 11

Step Up Provision

Back 11

Determine cost basis of an inherited asset at the death of the grantor; no capital gains due to asset appreciation if sold immediately upon inheritance

Front 12

Property of a Trust Terms

Back 12

Res, Corpus, Principal

Front 13

Trust Term Components

Back 13

(1) Investment Standards (Prudent Man Default Rule)
(2) Disposition Rules
(3) Spendthrift Provision

Front 14

Inter Vivos

Back 14

Lifetime living trust

Front 15

Advantages/Disadvantages of Living Trusts

Back 15

Private, effectively becomes a will; changeable; avoids probate

Assets must be transferred to trust; may have annual expense

Front 16

Time within which a divorce must occur for a settlement to not be a gift

Back 16

3 years

Front 17

Annual gift tax exclusion; Lifetime Exemption

Back 17

$14,000
$5.25 miilion

Front 18

Constructive Dividend

Back 18

Undeclared dividend by a company that involves the use of corporate assets

Front 19

3 Requirements for Qualified Disclaimer

Back 19

(1) Must be in writing
(2) 9 months after right of the property became yours
(3) Can't control disposition of gift

Front 20

Personal Liability of Debt and Gifts

Back 20

If personally liable, the gift is the full amount

If NOT personally liable, the gift is only the equity amount

Front 21

Gift of Paid Up Insurance

Back 21

Single premium of replacement policy cost

Front 22

Gift of Annual Premium Policy

Back 22

Terminal Reserve + Unearned Premiums (for the last payment)

Front 23

Gift of Immediately (within one year) Transfer of Insurance Policy

Back 23

Premiums paid to insurer

Front 24

Gift of Term Insurance

Back 24

Unused Premium