Exam #2: Chapters 5-10, 13-17

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taxable estate

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148 Terms

1

taxable estate

property subject to death taxes, whether or not within the probate estate; in estate tax computation, the value of the gross estate reduced by estate tax deductions

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2

probate estate

property of a decedent the distribution of which is determined by the terms of a will or the intestate succession statutes; property passing through probate administration, whether or not subject to death taxes

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3

expenses

the required costs incurred by the administrator in carrying out the terms of an estate

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4

nonprobate transfers

a transfer, effective at death, by a transferor domiciled in Indiana and who immediately before death had unrestricted power over the property and its use

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5

probate delay

the extended period of time it takes to settle an estate, resulting in a significant hindrance to the distribution of assets to rightful heirs and beneficiaries

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6

inter vivos gift

a gift made during life (inter vivos = between the living)

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7

donor

a person transferring property

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8

donee

a person receiving property

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9

constructive delivery

the donor of property transfers to the donee the means of obtaining the property rather than actual property

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10

symbolic delivery

the donor gives the donee something that represents the property rather than the actual property

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11

deed of gift

a written instrument that evidences donative intent, names the donee, and describes the property

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12

gift causa mortis

a gift made in contemplation of death

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13

future interest

an ownership interest in property in which enjoyment takes effect on the occurrence of a designated event

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14

remainder

an ownership interest in property that takes effect on the termination of a preceding estate, typically a life estate

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15

vested remainder

a remainder interest in property giving an unconditional right to obtain possession as soon as the preceding estate terminates

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16

contingent remainder

a remainder interest in property giving the right to obtain the possession of property only if a condition precedent is satisfied

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17

executory interest

a future interest in property other than a remainder interest

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18

power of appointment

the right to designate the new owner of property

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19

general power of appointment

a power of appointment in which the donor specifies no limitations on those who may be appointees

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20

special power of appointment

a power of appointment in which the donor specifies the individuals or groups who may be appointees, except the donee, the donee’s creditors, the donee’s estate, and creditors of the donee’s estate

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21

joint tenancy

concurrent property ownership in which two or more persons (joint tenants) own equal undivided fractional shares of property with right of survivorship; on death, a joint tenant’s share passes to the remaining joint tenants by operation of law

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22

survivorship

the right to succeed to property on a joint tenant’s death by operation of law

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23

tenancy by the entirety

a form of joint tenancy between spouses

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24

tenancy in common

concurrent property ownership in which two or more persons (cotenants) own equal or unequal undivided fractional shares of the property; on death, a cotenant’s share passes by testate or intestate succession

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25

community property marital property system

a system in which one-half of each spouse’s income vests in the other spouse

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26

types of multiple-party accounts

joint account, agency or convenience account, payable-on-death account, trust account

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27

joint account

an account payable on request of one or two or more account holders

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28

agency account

a joint account without survivorship rights

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29

payable-on-death account

an account payable to a designated person on the death of all original depositors

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30

trust account

an account held for a beneficiary as a revocable trust; also called Totten trust, savings account trust, and tentative trust

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31

insurable interest

a legal interest (e.g., in the life or health of another) supporting the right to insure that interest

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32

life insurance proceeds

no income tax on recipient of proceeds

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33

term life insurance

insurance proceeds are paid if the insured dies during a designated term

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34

whole life insurance

insurance proceeds are paid when the insured dies at any time

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35

universal life insurance

whole life insurance in which the cash value receives a competitive rate of return

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36

endowment life insurance

whole life insurance in which premiums stop at a younger age and the cash value equals the face value at that time

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37

split dollar life insurance

life insurance in which the insured and the insured’s employer both contribute to premiums and the employer receives a share of the proceeds

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38

payment methods

lump sum, installments, interest or deposit

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39

second-to-die policy

life insurance on two lives payable only when the second person dies

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40

first-to-die policy

life insurance on two lives payable when the first person dies

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41

annuity

a contract between an annuity provider and a purchaser in which, on payment of a lump sum, the provider agrees to make periodic payments to an annuitant for life of for a fixed term

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42

commercial annuity

an annuity purchased from a company in the business of selling annuities (e.g., an insurance company)

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43

private annuity

an annuity purchased from a private individual (e.g., a family member)

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44

joint life annuity

an annuity in which payments are made until the first of two annuitants dies

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45

joint and survivorship annuity

an annuity in which payments are made until both of two annuitants die

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46

straight annuity

an annuity in which payments are equal

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47

variable annuity

an annuity in which the amount of each payment depends on the investment success of the annuity provider

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48

qualified plan

an employee benefit plan that meets federal requirements for favorable tax treatment

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49

savings statute

a statute that validates a will not meeting the requirements of state law

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50

emancipated minor

a minor legally freed from parental control and treated as an adult

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51

animus testandi

an intent that an instrument serves as the testator’s will; testamentary intent

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52

extrinsic evidence

evidence outside a document itself

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53

holographic will

a will handwritten by the testator

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54

noncupative will

an oral will

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55

attested will

a will signed by witnesses

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56

animus signandi

a present intent to authenticate a document by signing it

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57

signature per alium

a signature by another; a proxy signature

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58

animus attestandi

the intent of witnesses to give a document testamentary validity

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59

publishing a will

a statement by the testator to witnesses that the document is his or her will

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60

interested witness

a witness who will benefit if the testator’s will is valid

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61

purging statute

a statute providing that a gift to an interested witness is void

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62

attestation clause

a clause in a will reciting that the testator duly executed the will

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63

self-proving affidavit

a statement by a testator and witnesses affirming under oath that the requirements for valid execution of the will have been satisfied

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64

natural objects of bounty

spouse, children, parents, grandchildren, siblings

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65

non-holographic material

  • Intent approach

  • Surplusage approach

  • Materials provision approach

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66

proxy signature

  • Signed in the testator’s presence

  • Signed at the testator’s direction

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67

testamentary capacity

  • Testator comprehends action being taken and effect

  • Testator knows nature and extent of his or her property

  • Testator recognizes natural objects of his or her bounty

  • Testator has elements in mind long enough to make reasoned judgement

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68

ademption by extinction

the failure of specific gift because the property is not in the testator’s estate at death

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69

ademption by satisfication

the failure of a specific gift because the property has been transferred to the beneficiary before death

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70

ademption pro tanto

a partial ademption where part of the gift is not in the testator’s estate

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71

appreciation

an increase in value

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72

bequest

a testamentary gift of personal property

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73

charitable gift

a gift to a qualifying entity for social benefit

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74

demonstrative gift

a general testamentary gift to be paid from a designated source

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75

depreciation

a decrease in value

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76

devise

a testamentary gift of real property

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77

ejusdem generis

the rule of construction that a general term following a list of specific items is to be interpreted to include only items of the same kind or class as the listed items; “of the same class”

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78

encumbrance

a charge or claim against property

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79

exoneration

payment of debts against a specific testamentary gift so that the beneficiary takes the gift free and clear of any encumbrances

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80

general gift

a testamentary gift not described in sufficient detail to be a specific gift

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81

identity theory of ademption

a gift is adeemed if the exact item is not in the testator’s estate

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82

intent theory of ademption

a gift may be saved from ademption by tracing or other circumstances

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83

legacy

a gift of money in a will; a type of bequest

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84

order of abatement

  1. Intestate property

  2. Residuary gifts

  3. General gifts

  4. Demonstrative gifts

  5. Specific gifts

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85

private gift

a gift to an individual for personal enjoyment

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86

residuary gift

a testamentary gift of property remaining after specific, general, and demonstrative gifts are satisfied

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87

specific gift

a testamentary gift described in sufficient detail to identify the exact asset intended

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88

tax apportionment

death taxes apportioned to individual gifts rather than charged against a residuary gift

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89

testamentary gifts

a gift that is derived from, founded on, or appointed by a testament or will

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90

antenuptial agreement

an agreement between spouses signed before marriage

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91

anti-lapse statute

a statute that provides for substitute beneficiaries to prevent a lapsed gift

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92

cy pres

a doctrine of equitable approximation authorizing a court to substitute a charitable beneficiary or purpose for a testamentary charitable gift that is impossible or impractical to fulfill

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93

elective share

a surviving spouse’s statutory right to a portion of the deceased spouse’s estate in lieu of the benefits, if any, provided in the will; also called forced share

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94

forced share

a surviving spouse’s statutory right to a portion of the deceased spouse’s estate in lieu of the benefits, if any, provided in the will; also called elective share

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95

lapsed gift

an intended gift that does not take effect because the beneficiary has predeceased the testator or is treated as having done so

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96

postnuptial agreement

an agreement between spouses signed during marriage

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97

pretermitted child

a child unintentionally omitted from a will

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98

quasi-community property

property acquired in a non-community property state that would have been community property if acquired in a community property state

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99

survival statute

a statute specifying a minimum period by which a beneficiary must outlive the testator to take a testamentary gift

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100

ambulatory instrument

an instrument that is not legally effective until death (ambulatory = walking around)

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