Weekly Assignment 1

Chaitanya Choudhary
FIN405
Dr. Howard Lee

Estate-
A person's rights, titles, or interests in property, whether they are present or absent, are
referred to as their estate. The rights, titles, or interests that control how and to whom
property will transfer at death are known as ned. Property could transfer to the wrong person
or in the incorrect way if sufficient planning isn't done. Furthermore, in the absence of a will,
privately held assets will be distributed in accordance with state regulations of intestacy.
Every adult who has reached the age of 18 should have an estate plan.

Having an estate plan can help ensure that, regardless of the nature of a person's assets,
their wishes will be carried out exactly how they intended. For instance, if a person was
concerned about the impact their death would have on their children or loved ones, an estate
plan can include provisions for continuing financial support for them.

State laws of intestacy-

In the absence of a will, privately held assets will be distributed in accordance with state
regulations of intestacy. In most states, the surviving spouse of a deceased individual will
inherit all or substantially all of the estate unless there is a prenuptial agreement. In some
jurisdictions, children of an individual born out of wedlock may be able to inherit as well.

In general, and for intestate (without a will) estates in the United States, assets are
distributed with respect to property owned by the decedent during his or her lifetime being
split 50/50 between his or her spouse and his or her descendants.

For example- John, my Uncle dies in 2014 leaving a will that leaves his entire estate to son
James. If John did not have any children or left a will, then his wife (for whom he was
separated) would have inherited everything.

Most states have different statutes of distribution depending on whether the decedent left a
spouse or descendants. If no spouse and no descendants then the estate is distributed to
parents, brothers and sisters, grandparents, nephews and nieces.

Trusts-
Trusts are essential estate planning tools because they can provide financial security and
manage assets in the event that the grantor—the person who created the trust—becomes
mentally unable. The courts will appoint a guardian or conservator to handle these types of
decisions on behalf of an incompetent person in the absence of legal documents like a
power of attorney.

Smith is 78 years old and has created a living trust with his 36-year-old son as the successor
trustee. John is in the early stages of Alzheimer's disease and no longer trusts himself to
make essential financial decisions.
An attorney advises Smith to re-sign all of his accounts over to his son, but there is no form
or paperwork for this situation and he refuses. His attorney recommends that he create a
Financial Power of Attorney document.

Grantor- The person who can provide continuity of income and sset management in the
event of trust formation.The Grantor is typically someone outside the trust, however there
are times where it might be an inside person as well.

My parents are my grantors and will be able to provide continuity of income and set
management in the event that I become my father's trustee.

Fiduciary-
A fiduciary has a duty to put the interests of a beneficiary ahead of his own.They have the
power to carry out particular tasks or special acts on behalf of others.
Fiduciaries can carry out instructions given by a principal to manage that person's property
or affairs, depending on the type of fiduciary chosen and the scope of his authority.

Fiduciaries have a duty to act in the best interests of the beneficiaries they represent.
Fiduciaries who oversee property interests must take all reasonable precautions to maintain
and safeguard the property and must choose wise investments with the intention of raising
the property's worth. In both civil and criminal courts, fiduciaries can be sued for breach of
fiduciary responsibility.

For instance, attorneys have a fiduciary obligation to look out for the interests of their clients.
Similar to patients, doctors have a responsibility to look out for and act for their best
interests.

Principal- The person who gives instructions to carry out or manage that person’s property
or affairs to fiduciary.

For Example- My relative gave his lawyer instructions to manage and carry out his property
affairs, so here my relative is a Principal and the lawyer is a fiduciary.

Executor-
An executor is a person entrusted with the responsibility of acting as the testator's personal
representative. A decedent's obligations and taxes must be settled, the estate's assets must
be gathered and valued, and assets must be distributed to the beneficiaries specified in the
will. An executor must be ready to serve for the full duration of the probate procedure, which
can take anywhere between nine months and two or three years.

The executor of a will should be someone who is attentive to the beneficiaries' emotional
and financial requirements, such as a close relative or another caring person.
It is desirable to have a trusted family member fill this position, but only if they are qualified
to execute the duties of estate administration. A person should be aware of which specialist
to contact for assistance if family members lack the requisite qualifications. Executors who
are family members must operate impartially and refrain from taking activities that provide
them a clear advantage over other estate beneficiaries.
Maya (19) and her mother Sunita (50), Mary asked Maya to become her executor. But
because Maya was too young and wasn't financially stable, she refused to take this
responsibility. Therefore, Sunita appointed a bank as an executor instead. The court
interpreted this request as a provision in which Sunita had entrusted the bank with the
responsibility of carrying out estate administration on her account.

Trustee-
Trusts serve a variety of purposes and frequently give their beneficiaries assets or income.
The trustee, who is a fiduciary, is the owner of the trust assets and is responsible for
managing them for the benefit of the beneficiaries in accordance with the terms laid out in
the trust document. A grantor selects a trustee, who may be an individual or a corporation.
Co-trustees are individuals who act as joint trustees with an institutional trustee, such as a
bank or trust firm. One or more family members are an example of co-trustees.
A benefit of having a corporate trustee is that, unlike individual trustees, it can serve for
many generations. Corporate trustees can also provide expert accounting, tax planning,
business consulting, and investment management services that individual trustees may need
not be capable of providing.

If I were a client with complicated investments and substantial real estate holdings, I would
pick a corporate trustee over an individual trustee. If I were wealthy, I would create a
revocable living trust so that I wouldn't have to deal with probate issues after my death. I
would use a corporate trustee to protect my assets from court authority.

Domicile-
The place where a person is legally residing. The permanent residence is also here. This
relates to elements that may influence the choice of an estate planning strategy. The law of
the client's state of residence is one of the variables (permanent residence).

A person can never be without a domicile because it is one of the identifying characteristics
typically utilized in common law legal systems, and everyone acquires one at birth. Domicile
can generally be broken down into three categories: domicile of origin, domicile of choice,
and domicile through operation of law (also known as domicile of dependency). A court
adopts its own rules and definition of domicile when determining an individual's residence.