Ryan Magaziner Exam 3 Notes Today: 1. Intestacy laws 2. Types of wills 3. Executors 4. Types of gifts Intestacy Laws: • Tell you what to do if you die without a will. They are strictly a Plan B. If you do not like what these laws would say, leave behind a Will. More than half the people die without a Will. • It tells you what you do with your estate/assets. States have different ideas on what an average person would probably want. Two Models (Diablo Example) 120k 4 kids of the guy who died and then like 6 grandkids. • Per Stirpes o Goes to older person in each branch of the family. So not necessarily given to the younger people in their branch. • Per Capita o “Level 1” is the exactly the same. You take the amount that grandkids got and you redistribute it across grandkids evenly. Two Basic kinds of Wills 1. Holographic a. Old fashioned handwritten Wills. b. Written in your own handwriting entirely. Nothing can be typed. c. Reasonably clear, what you meant, then they do not have to be witnessed. d. You can write them on any type of paper etc. 2. Attested Will a. Witnessed. a.i. Watch the person sign it etc. b. These are stronger Wills because you have people can testify etc. Executors • The person in charged of handling your estate. • Becomes the dead person because there needs to be someone who can sign for them. o In charge of paying for debts. o Homestedexemption: (protection) Home can have any value • No cap on value of home
10 acres of land that house sits on. Rural area is 200 acres. $30,000 of stuff in the house. o Everything else pretty much is fair game on paying debts. If you cant pay them off, they end up not being paid. Uncollectable bad debt. Sometimes credit card companies will call because they see they are about to eat some money, so they call other family members saying that they have an obligation to pay, but they do not. There is no obligation to pay. Estate Taxes: • Living people do not pay estate taxes, estates pay estates taxes. • About 99.2% of people do not pay anything. • Most people pay nothing because of three exemptions o 100% spouse. o 100% charity o next 5.12 million o anything left, taxed at 35%. o On Jan 1 2013, there is supposed to be change to these rules. If nothing new happens, itll go back to Clinton times instead of Bush times which is now. • Some new rules would be 55% and instead of 5.12 it would be 1 million. o Republicans want to get rid of this and Democrats want to keep these taxes. o House will be controlled probably by house and if they get the small majority of senate and president of republican, teachers expects to keep it the way its now or abolish these taxes. • Federal Gift and Estate Tax o You can give up to 13,000 a year without any tax and as many people. You can only give it to that one person but then your wife could give another 13 to that same person.
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