finance quiz 1

Will

A legal document that gives you the opportunity to control the distribution of your property at death.

Control distribution of property at death

Estate Plan

A plan for managing and distributing a person's property and making decisions about their care.

Big 3 of Estate Planning

Wills, powers of attorney, and advance medical directives.

Power of Attorney

A legal document that authorizes an agent to act on behalf of another person.

Principal

The person who gives another person power of attorney and gives them authority to act on their behalf.

Grantor of Power

Another term for the principal; the person who gives the power of attorney.

Agent

The person who is authorized to act on behalf of the principal.

Attorney-in-Fact

Another term for an agent who has been given power of attorney.

Living Will

An advance medical directive that states a person's wishes regarding medical care, particularly when they are unable to make decisions themselves

Advance Medical Directive

A document that allows a person to state their medical and end-of-life care preferences in advance.

Durable Power of Attorney

A type of power of attorney specifically identified in your notes as part of estate planning; it remains an important authority even when the principal becomes unable to act for themselves.

General Power of Attorney

A power of attorney that gives an agent broad authority to act on behalf of the principal.

Limited Power of Appointment

A power that allows a person to appoint assets to another person or persons within specified limits.

General Power of Appointment

A power that provides broader authority to appoint or transfer assets to another person.

Springing Power

A power of attorney that becomes effective when a specified condition occurs.

Power of Appointment

The power to appoint or transfer assets from one person to another.

Letters of Testamentary

A short certificate/document related to the authority to administer a person's estate after death.

Per Stirpes

“By the roots”; directs equal shares to each member of a specified tier or class of relatives, with the share of a deceased member divided proportionally among that deceased member's beneficiaries.

Per Capita

“By the head”; directs equal shares among the people living at the relevant time.

Escheat

When unclaimed property or money goes to the state.

Domicile

The place where a person lives, votes, pays taxes, and is considered their permanent home.

Side Letter of Instruction

A document included as part of an estate plan that provides instructions or information to help carry out a person's wishes.

Power of Attorney for Property

A power of attorney that gives an agent authority to handle matters involving a person's property.

Durable Power of Attorney for Health Care

A durable power of attorney concerning healthcare decisions.

Do Not Resuscitate Order (DNR)

A medical order stating that a person does not want CPR or resuscitation if their heart or breathing stops.

Advantages of a Will

A will can transfer property that does not automatically transfer through contract or law, designate a guardian for minor children or dependents, provide for disinheritance, and include provisions intended to minimize tax burdens.

Disinheritance

The act of intentionally preventing someone from receiving property through your estate.

Guardian

A person designated to care for a minor child or dependent

Estate

A person's property and assets, especially those that are dealt with after their death.

Property Distribution

The process of determining who receives a person's property after death.

Testamentary

Relating to a will or matters that take effect after a person's death