section 1 - The American College Online Learning Center

13. Transfers at deatha. Wills(2) A good option is to transfer income-producing property to shift income toyounger family members in a lower bracket.(3) Property with built-in loss potential should not be gifted since the capitalloss would be wasted.(4) It is important to get tax advice and determine the gift tax compliance ruleswhenever the client is considering lifetime gifts.(1) The client’s will transfers property to the selected beneficiaries.b. Jointly titled property with rights of survivorship.c. Trusts(1) If the joint property has survivorship provisions, it passes automatically tothe surviving joint owner or owners.(1) Terms of the trust determine how the assets are distributed.d. Beneficiary designations(1) Many types of retirement accounts, financial accounts, employee benefits,and life insurance products will be payable to a designated beneficiary.14. Understanding wills — some terminologya. Testator: The person writing the willb. Executor: Personal representative who will be in charge of settling the estatec. Witnesses: Must witness the signature and date at the end of the will.d. Self-proving: For the will to be made self-proving, there must be an attachment ofan affidavit of the testator and witnesses to a notary that will is being executed.15. Advantages of a valid willa. Designate guardian for minor childrenb. Choice of executor/personal representativec. Waive executor requirement to post bondd. Distribution of property to chosen beneficiariese. Transfer of property to charityf. Take maximum advantage of marital deductiong. Direct source of property to pay estate’s expenses16. Intestate distribution if there is no valid will17. Trustsa. Applies to probate property if there is no valid will (or to specific property if will isinvalid with respect to such property)b. State law imposes its “will” to provide a plan of dispositionc. Planning Point: There are often surprising, unexpected, and unwanted resultsfrom intestacy, so it should be avoided if at all possible.a. The client may have (or may need) trusts for a number of reasons(1) Certainly, any possibility that a minor would receive property would indicatethe use of a trust rather than a guardianship.4.25