Comm 429: Final Exam: Working Excel

what does it mean to die intestate? who will distribute your estate if you die intestate?

If one dies with a will (intestate), the court will appoint an administrator for the estate according to the laws of your provinces.

What is a preferential share?

refers to the dollar value of estate assets that will be distributed to the surviving spouse before assets are distributed among potential beneficiaries.

what is a trustee

an individual or organization that is responsible for the management of assets held in trust for one or more of the beneficiaries of a will

responsibilities of a guardian for minor children

take care of the children and manage any estate left to the children

what is the residue of an estate? what is the purpose the distribution of residue clause?

Residue refers to the amount remaining in an estate after all financial obligations including the payment of debts, expenses, taxes, and bequests, have been fulfilled. The purpose of the distribution of residue clause is to ensure that all remaining assets of the deceased are accounted for and distributed.

Describe the purpose for the administration of the estate clause.

Every province provides a set of guidelines for how an estate is to be administered by a trustee. If the testator would like to give the trustee more discretion to deal with estate assets, they use the administration of the estate clause to include clear instructions in the will regarding estate administration.

What are rights or things?

rights or things refer to income that was owed to the deceased taxpayer but not paid at the time death, but that would have been included in income had the taxpayer not died. For example, a bond coupon payment that was earned by the taxpayer while alive that had not been paid by the time of death would quality as a “right or thing”

what is joint tenancy with rights of survivorship (JTWROS)? what are its disadvantages?

JTWROS is a form of joint ownership where the death of one joint owner results in an asset being transferred directly to the surviving joint owner, thereby avoiding the deceased’s estate and probate fees.

Disadvantages:

• loss of control in terms of decisions

• deceased’s other beneficiaries may argue over the ownership legitimacy

• can trigger immediate capital gains tax

• creditors and/or the spouse of either joint owner may also have a claim to the assets

what is a living will?

is a legal document created by individuals to specify their preferences if they become mentally or physically disables.

How can a longevity annuity be useful for clients that may have longer than average life expectancies? Are there disadvantages to these products? Discuss.

The longevity annuity, a type of fixed annuity, differs by delaying payments for a set period (e.g., 20 years) after purchase. This structure reduces the annuity's cost, increasing eventual payouts. It addresses biases against insuring against outliving savings, likening it to protective strategies like car or home insurance, not gambling. However, benefits peak toward the end of the term (30-40 years post-purchase), potentially surpassing the desired timeline for some clients.