Bus 201 Final Exam

Front 1

This comes into existence when a person dies

Back 1

"estate of decedent"

Front 2

has the responsibility of "processing" the estate

Back 2

personal representative

Front 3

The PR is this for all disputes including "looting" of house

Back 3

"arbitrator"

Front 4

responsibility to act in the best interest of the decedent's wishes

Back 4

fiduciary responsibility

Front 5

Is filed in probate court and is a public record

Back 5

will

Front 6

PR should never do this with estate funds and personal funds

Back 6

"commingle"

Front 7

Understand "Raymond + Vivian" blended family "problem"

Back 7

Raymond had a will, so Mr. Sanford received an inheritance

Front 8

"plan" to get the decedent's assets to his/her heirs with the least amount of expense/taxes/problems

Back 8

estate planning

Front 9

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

Back 9

tenants in common

Front 10

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.

Back 10

joint tenants

Front 11

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

Back 11

tenants by the entirety

Front 12

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

Back 12

B. Will pass on Jones' death to Jones' heirs

Front 13

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

Back 13

A. Will pass by operation of law to Newton on Jones' death

Front 14

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

Back 14

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

Front 15

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

Back 15

C. The house is owned by the Church and Jim as tenants in common

Front 16

If you do not have a will, the state of Michigan, has a will for you called?

Back 16

"law of intestate succession"

Front 17

A man and woman are married, and have no children, and the man's parents are deceased. If the man dies without a will?

Back 17

The wife inherits everything

Front 18

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?

Back 18

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

Front 19

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?

Back 19

The wife receives the first $60,000 plus 1/2 the balance of the estate. The children received the other 1/2

Front 20

A man and woman are married and there is one child from the man's previous marriage. Assume the man dies without a will?

Back 20

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

Front 21

by the head

Back 21

per capita

Front 22

by representation

Back 22

per stirpes

Front 23

"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

Back 23

B. 1/3 to each surviving child and 1/9 to each grandchild

Front 24

"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

Back 24

D. 1/5 to each surviving child and grandchild

Front 25

T/F?

You do not have to accept an inheritance.

Back 25

True

Front 26

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

Back 26

trust

Front 27

2 good ways to avoid Probate?

Back 27

1. Put property in joint name with kids
2. Put property in trust with kids as beneficiary

Front 28

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

Back 28

A. All of the decedent's debts

Front 29

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

Back 29

A. Personal Representative

Front 30

Income taxed to owners, not business and owners: Yes

Limited Liability like a Corporation: No

File paperwork: No

Back 30

Sole Proprietorship

Front 31

Income taxed to owners, not business and owners: Yes

Limited Liability like a Corporation: No

File paperwork: No

Back 31

Partnership

Front 32

Income taxed to owners, not business and owners: Yes

Limited Liability like a Corporation: No

File Paperwork: Yes

Back 32

Limited Partnership

Front 33

Income taxed to owners, not business and owners: No

Limited Liability like a Corporation: Yes

File paperwork: Yes

Back 33

"C" Corporation

Front 34

Income taxed to owners, not business and owners: Yes

Limited Liability like a Corporation: Yes

File paperwork: Yes

Back 34

LLC

Front 35

"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

Back 35

C. The corporation and its shareholders do not maintain separate bank accounts and records

Front 36

"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

Back 36

B. It can only be created pursuant to a statute providing for the formation of limited partnerships

Front 37

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

Back 37

D. To be elected as a general partner by a majority vote of the limited partners in number and amount

Front 38

4 Reasons why LLC seems to be "popular" today?

Back 38

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

Front 39

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

Back 39

D. The classes of stock authorized for issuance

Front 40

is responsible for policy decisions for the management of the corporation

Back 40

board

Front 41

6 Things that must be in Articles of Incorporation?

Back 41

1. Name
2. Purpose
3. Resident Agent
4. Incorporators
5. Authorized stock
6. Other "special rules"

Front 42

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

Back 42

D. Amend the articles of incorporation

Front 43

3 Things that shareholders do?

Back 43

1. Receive annual dividends if declared by the board of directors
2. Vote/elect directors
3. Not involved with management of corporation

Front 44

What do shareholders do at annual meeting?

Back 44

Vote for directors and vote on many major corporate changes. Also, may receive dividends if declared by board of directors

Front 45

If successful with shareholder derivative action lawsuit?

Back 45

fees are paid but any proceeds won go to corporation

Front 46

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

Back 46

C. Approve dissolution

Front 47

4 Roles of Corporate Officers?

Back 47

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

Front 48

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

Back 48

C. Are agents and fiduciaries of the corporation, having actual and apparent authority to manage the business

Front 49

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

Back 49

D. May be permitted by court order although Fairwell was found to be negligent

Front 50

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

Back 50

Sarbanes-Oxley Act of 2002

Front 51

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

Back 51

B. Receipt of voting stock by all stockholders of the original corp.

Front 52

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

Back 52

C. Passage by the board of directors of a resolution to dissolve

Front 53

Sell goods overseas, must sign these saying you will pay

Back 53

letters of credit