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Explain the difference between probate and non-probate assets. Why might it be a good idea to avoid having all your assets subject to the probate process? What are some ways a person could keep assets out of the probate process?
Probate assets are all forms of the property in a descendant’s estate that require proceedings
to distribute said assets to the proper beneficiaries. Non-probate assets do not require any probate proceedings to pass the assets to the beneficiaries. These assets are generally not subject to the claims of the descendants’ creditors, spouse, or children. To avoid having assets subject to the probate process hold property in a trust, have joint ownership of said property, and make accounts payable on death. And managing the probate process allows the property to be passed to the beneficiaries more efficiently and cuts the cost of probate.
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Related Questions
Which of the following methods will NOT achieve the client's goal of distributing property at death to the desired persons?
A)Intestacy
B)A trust
C)A will
D)A will substitute
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Estate planning is the process by which an individual may determine how his or her assets will be systematically transferred
both before and after death to achieve certain goals. The least compelling motive of this process is to
C
A.
B.
C.
D.
Ensure that the owner's intentions are honored.
Prevent the forced sale of important assets.
Act in accordance with the public policy against excessive accumulation of wealth.
Avoid taxes.
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Give typing answer with explanation and conclusion
Come into being when the trustor dies. They do not prevent assets from going into probate.
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What is the purpose of the laws of distribution? Choose the correct.a. To guide the distribution of personal property when an individual dies without a will.b. To verify the legality of a will, especially an oral will.c. To guide the distribution of real property when an individual dies without a will.d. To outline the functions of the executor of an estate.
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Which of the following is not a true statement?a. Testate refers to a person having a valid will.b. The laws of descent convey personal property if an individual dies without a valid will.c. Intestate refers to a person having no valid will.d. A specific legacy is a gift of personal property that is specifically identified.
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Which of the following is Which of the following is not a true statement?
Testate refers to a person having a valid will.
The laws of descent convey personal property if an individual dies without a valid will.
Intestate refers to a person having no valid will.
A specific legacy is a gift of personal property that is specifically identified.
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Which of the following is not a goal of probate laws? Choose the correct.a. To gather and preserve all of the decedent’s property.b. To ensure that each individual produces a valid will.c. To discover the decedent’s intent for property held at death and then to follow those wishes.d. To carry out an orderly and fair settlement of all debts and distribution of property.
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If after paying debts and expenses, the estate principal is not adequate to satisfy the various legacies, the legacies are satisfied to whatever extent possible through the:
a.
probate process.
b.
a property devise.
c.
abatement process.
d.
legacy process.
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If a person dies without leaving a valid will, how is the distribution of property regulated?
arrow_forward
What is the purpose of the laws of distribution?
To guide the distribution of personal property when an individual dies without a will.
To verify the legality of a will, especially an oral will.
To guide the distribution of real property when an individual dies without a will.
To outline the functions of the executor of an estate.
arrow_forward
How does a devise differ from a legacy?
A devise is a gift of money and a legacy is a nonmonetary gift.
A devise is a gift to an individual and a legacy is a gift to a charity or other organization.
A devise is a gift of real property and a legacy is a gift of personal property.
A devise is a gift made prior to death and a legacy is a gift made at death.
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Why are claims against an estate put into an order of priority? Choose the correct.a. To help the executor determine the due date for each claim.b. To determine which claims are to be paid if funds are insufficient to pay all claims.c. To assist in determining which specific assets are to be used to satisfy these claims.d. To list the claims in order of age so that the oldest can be paid first.
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What is the correct answer to the problem? Identify the gross estate of the decedent and show the solution.
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Why are claims against an estate put into an order of priority?
To help the executor determine the due date for each claim.
To determine which claims are to be paid if funds are insufficient to pay all claims.
To assist in determining which specific assets are to be used to satisfy these claims.
To list the claims in order of age so that the oldest can be paid first.
arrow_forward
How does a devise differ from a legacy? Choose the correct.a. A devise is a gift of money and a legacy is a nonmonetary gift.b. A devise is a gift to an individual and a legacy is a gift to a charity or other organization. c. A devise is a gift of real property and a legacy is a gift of personal property.d. A devise is a gift made prior to death and a legacy is a gift made at death.
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What is the objective of the process of abatement? Choose the correct.a. To give legal structure to the reductions that must be made if an estate has insufficient assets to satisfy all legacies.b. To ensure that all property distributions take place in a timely manner.c. To provide adequate compensation for the estate executor and any appraisers or other experts that must be hired.d. To ensure that all legacies are distributed to the appropriate party as specified by the decedent’s will or state laws.
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Are deeds the only acceptable way to legally transfers a property? Why or not?
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What is the objective of the process of abatement?
To give legal structure to the reductions that must be made if an estate has insufficient assets to satisfy all legacies.
To ensure that all property distributions take place in a timely manner.
To provide adequate compensation for the estate executor and any appraisers or other experts that must be hired.
To ensure that all legacies are distributed to the appropriate party as specified by the decedent’s will or state laws.
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Which one of the following NOT a correct matching of a concept associated with liquidity planning with its description?
A)
Forced liquidation—estate shrinkage that occurs when the decedent’s personal representative must sell estate assets, usually at less than market value, to make up for a cash deficiency
B)
Estate debts—the money that the decedent’s personal representative must spend to pay the decedent’s lifetime obligations that had not been paid at the time of the decedent’s death
C)
Estate liquidity—the decrease in the value of a decedent’s estate from the time of the decedent’s death until the time of the ultimate distribution to the decedent’s devisees, legatees, and heirs
D)
Estate administrative expenses—the money that the decedent’s personal representative must spend to collect the decedent’s assets; pay claims of the estate; and distribute the remaining assets to the decedent’s devisees, legatees, or heirs
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If you don't have a will when you die, the state will take steps to see that your assets are distributed as you might have wished.
a) True
b) False
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Why might real estate be omitted from an inventory of estate property? Choose the correct.a. Real estate is subject to a separate inheritance tax.b. State laws prohibit real property from being conveyed by an estate.c. State laws require a separate listing of all real estate.d. In some states, depending on the ownership, real estate is considered to be conveyed directly to a beneficiary at the time of death.
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True or False: The executor is not responsible for managing the deceased's debts and ensuring they are paid from the estate. True False
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Outline the anti-avoidance provisions as they relate to the transfer of property to a child, a trust, or a connected person
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Which of the following items is not charged against the income of an estate?
a.
Ordinary repairs to income-producing property
b.
Expenses incurred to protect income flow
c.
Loss on the sale of an estate asset
d.
All of the above are charged against the income
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Related Questions
- Which of the following methods will NOT achieve the client's goal of distributing property at death to the desired persons? A)Intestacy B)A trust C)A will D)A will substitutearrow_forwardEstate planning is the process by which an individual may determine how his or her assets will be systematically transferred both before and after death to achieve certain goals. The least compelling motive of this process is to C A. B. C. D. Ensure that the owner's intentions are honored. Prevent the forced sale of important assets. Act in accordance with the public policy against excessive accumulation of wealth. Avoid taxes.arrow_forwardGive typing answer with explanation and conclusion Come into being when the trustor dies. They do not prevent assets from going into probate.arrow_forward
- What is the purpose of the laws of distribution? Choose the correct.a. To guide the distribution of personal property when an individual dies without a will.b. To verify the legality of a will, especially an oral will.c. To guide the distribution of real property when an individual dies without a will.d. To outline the functions of the executor of an estate.arrow_forwardWhich of the following is not a true statement?a. Testate refers to a person having a valid will.b. The laws of descent convey personal property if an individual dies without a valid will.c. Intestate refers to a person having no valid will.d. A specific legacy is a gift of personal property that is specifically identified.arrow_forwardWhich of the following is Which of the following is not a true statement? Testate refers to a person having a valid will. The laws of descent convey personal property if an individual dies without a valid will. Intestate refers to a person having no valid will. A specific legacy is a gift of personal property that is specifically identified.arrow_forward
- Which of the following is not a goal of probate laws? Choose the correct.a. To gather and preserve all of the decedent’s property.b. To ensure that each individual produces a valid will.c. To discover the decedent’s intent for property held at death and then to follow those wishes.d. To carry out an orderly and fair settlement of all debts and distribution of property.arrow_forwardIf after paying debts and expenses, the estate principal is not adequate to satisfy the various legacies, the legacies are satisfied to whatever extent possible through the: a. probate process. b. a property devise. c. abatement process. d. legacy process.arrow_forwardIf a person dies without leaving a valid will, how is the distribution of property regulated?arrow_forward
- What is the purpose of the laws of distribution? To guide the distribution of personal property when an individual dies without a will. To verify the legality of a will, especially an oral will. To guide the distribution of real property when an individual dies without a will. To outline the functions of the executor of an estate.arrow_forwardHow does a devise differ from a legacy? A devise is a gift of money and a legacy is a nonmonetary gift. A devise is a gift to an individual and a legacy is a gift to a charity or other organization. A devise is a gift of real property and a legacy is a gift of personal property. A devise is a gift made prior to death and a legacy is a gift made at death.arrow_forwardWhy are claims against an estate put into an order of priority? Choose the correct.a. To help the executor determine the due date for each claim.b. To determine which claims are to be paid if funds are insufficient to pay all claims.c. To assist in determining which specific assets are to be used to satisfy these claims.d. To list the claims in order of age so that the oldest can be paid first.arrow_forward
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