Question 1

The Uniform Probate Code has been adopted in all states.

Accepted Answer

A) True 
 B)False  False

Question 2

Parents may not disinherit their minor children without good reason.

Accepted Answer

A) True 
 B)False  False

Question 3

Abraham has just purchased his first car.His bank,First State Bank,loaned him the money to buy the car and has required him to purchase insurance to protect the car as the collateral for the loan.Which basic types of coverage should Abraham buy to satisfy the bank requirement and to best protect himself from the risks of operating an automobile?

Accepted Answer

A) collision coverage only 
B) collision and comprehensive coverage only 
C) collision, uninsured motorist, and comprehensive coverage 
D) collision, uninsured motorist, comprehensive, and liability coverage 
A) collision coverage only 
B) collision and comprehensive coverage only 
C) collision, uninsured motorist, and comprehensive coverage 
D) collision, uninsured motorist, comprehensive, and liability coverage D

Question 4

Reva prepares and signs a document that she intends to be her will.If she has not followed the legal technicalities of her state regarding executing a will,the court may not enforce the will.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true about wills?

Accepted Answer

A) A will can be amended to change specific terms by execution of a codicil. 
B) The testatrix cannot disinherit her minor children without stating a reason in the will. 
C) If the will meets the legal technicalities, the surviving spouse cannot override it. 
D) Once a will is written, it cannot be changed. 
A) A will can be amended to change specific terms by execution of a codicil. 
B) The testatrix cannot disinherit her minor children without stating a reason in the will. 
C) If the will meets the legal technicalities, the surviving spouse cannot override it. 
D) Once a will is written, it cannot be changed.

Question 6

Property of a person who dies without a will is distributed according to intestacy laws.

Accepted Answer

A) True 
 B)False

Question 7

Insurance policies often contain a covenant of good faith and fair dealing.Even if the clause is not in the policy,often courts will imply it.Explain the covenant of good faith and fair dealing and provide an example illustrating when an insurance company might breach this covenant.

Accepted Answer

This covenant requires the insurance com

Question 8

Insurance obtained by a limited partnership on the life of the general partner would be

Accepted Answer

A) double indemnity insurance, because both the limited partnership and the general partner are insured. 
B) key person life insurance, because the general partner is a key person, contributing a great deal to making the business successful. 
C) a co-insurance policy because both the limited partnership and the general partner are insured. 
D) whole life or straight life insurance which builds a cash value. 
A) double indemnity insurance, because both the limited partnership and the general partner are insured. 
B) key person life insurance, because the general partner is a key person, contributing a great deal to making the business successful. 
C) a co-insurance policy because both the limited partnership and the general partner are insured. 
D) whole life or straight life insurance which builds a cash value.

Question 9

An executor who is related to the testator is not entitled to compensation.

Accepted Answer

A) True 
 B)False

Question 10

Myron had two children,Cheryl and Pete,who predeceased him.Cheryl had three children and Pete had one child.Myron had a will.Which of the following is true?

Accepted Answer

A) If Myron's will indicates that the issue are to inherit per stirpes, Pete's child will receive one half of Myron's estate. 
B) If Myron's will indicates that the issue are to inherit per stirpes, Pete's child will receive one fourth of Myron's estate. 
C) If Myron's will indicates that the issue are to inherit per capita, Pete's child will receive one half of Myron's estate. 
D) If Myron's will indicates the issue are to inherit per capita, each of Cheryl's children will receive one sixth of Myron's estate. 
A) If Myron's will indicates that the issue are to inherit per stirpes, Pete's child will receive one half of Myron's estate. 
B) If Myron's will indicates that the issue are to inherit per stirpes, Pete's child will receive one fourth of Myron's estate. 
C) If Myron's will indicates that the issue are to inherit per capita, Pete's child will receive one half of Myron's estate. 
D) If Myron's will indicates the issue are to inherit per capita, each of Cheryl's children will receive one sixth of Myron's estate.

Question 11

Pamela applies for a life insurance policy with Forever Young Insurance Company.When completing the application form about past surgeries,Pamela forgot about a past outpatient surgery when she had an infected hang-nail removed and her toe treated.One year after issuing the policy,Pamela died suddenly from a brain aneurysm.Forever Young denies payment under the policy based on misrepresentation.If Pamela's sister,Paula,sues Forever Young,she will most likely

Accepted Answer

A) win, because once an application has been accepted, an insurer may not use a misrepresentation on the application to avoid liability. 
B) win, because Pamela's misrepresentation was not a material fact and did not increase Forever Young's risk in insuring Pamela's life. 
C) lose, because Pamela's application contained a misrepresentation of material fact. 
D) lose, because an insurer can always use any misrepresentation on an application to avoid paying. 
A) win, because once an application has been accepted, an insurer may not use a misrepresentation on the application to avoid liability. 
B) win, because Pamela's misrepresentation was not a material fact and did not increase Forever Young's risk in insuring Pamela's life. 
C) lose, because Pamela's application contained a misrepresentation of material fact. 
D) lose, because an insurer can always use any misrepresentation on an application to avoid paying.

Question 12

Mountain Ridge Bank has been named trustee for a $100,000 trust Fred and Martha Betts established for "the living children of the grantors." List the requirements for establishing a trust.Identify the primary obligation of the trustee and discuss the fiduciary duty of the trustee.

Accepted Answer

There are four requirements for establis

Question 13

Liability policies,such as personal liability,professional malpractice,or business liability insurance,do NOTprotect the insured against

Accepted Answer

A) a personal injury on the insured's property, such as the mail carrier who slips and falls on the owner's sidewalk. 
B) intentional harm caused by the insured. 
C) claims for property damaged by the insured. 
D) someone injured by the insured away from home or business. 
A) a personal injury on the insured's property, such as the mail carrier who slips and falls on the owner's sidewalk. 
B) intentional harm caused by the insured. 
C) claims for property damaged by the insured. 
D) someone injured by the insured away from home or business.

Question 14

The percentage of people dying without a will is approximately

Accepted Answer

A) 5%. 
B) 25%. 
C) 65%. 
D) 90%. 
A) 5%. 
B) 25%. 
C) 65%. 
D) 90%.

Question 15

Dr.Gavornne advises his very ill patients to prepare a living will.The purpose of a living will is to

Accepted Answer

A) make a disposition of property. 
B) express a desire not to have extreme medical treatment that would prolong their lives. 
C) transfer life insurance. 
D) consent to organ donation. 
A) make a disposition of property. 
B) express a desire not to have extreme medical treatment that would prolong their lives. 
C) transfer life insurance. 
D) consent to organ donation.

Question 16

April purchased a life insurance policy on herself.On her death,the proceeds of the insurance were to be paid to her minor child,Ryan.Ryan is the beneficiary.

Accepted Answer

A) True 
 B)False

Question 17

In purchasing life insurance,Kelsey concealed the fact that she has a muscular disease.The insurance company can void the policy if the muscular disease is found to be a material fact.

Accepted Answer

A) True 
 B)False

Question 18

Jose and Juanita are first cousins.Jose lives in San Francisco,California;Juanita lives in Toronto,Canada.The two have met only once in life,and may never meet again.Nonetheless,because they are blood relatives,Juanita has an insurable interest in Jose's life.

Accepted Answer

A) True 
 B)False

Question 19

Sarah has car insurance.While driving her automobile,Sarah negligently ran a red light and hit Vi's car.Which type of coverage will pay for the damage done to Vi's car?

Accepted Answer

A) liability insurance 
B) comprehensive insurance 
C) accident insurance 
D) uninsured motorist insurance 
A) liability insurance 
B) comprehensive insurance 
C) accident insurance 
D) uninsured motorist insurance

Question 20

Which of the following is NOTrequired to create a valid trust?

Accepted Answer

A) Legal age and sound mind of the grantor 
B) Witnesses 
C) A beneficiary(ies) 
D) Property transferred to the trust 
A) Legal age and sound mind of the grantor 
B) Witnesses 
C) A beneficiary(ies) 
D) Property transferred to the trust

Exam 44: Planning for the Future: Estates and Insurance

The Uniform Probate Code has been adopted in all states.

Parents may not disinherit their minor children without good reason.

Reva prepares and signs a document that she intends to be her will.If she has not followed the legal technicalities of her state regarding executing a will,the court may not enforce the will.

Which of the following is true about wills?

Property of a person who dies without a will is distributed according to intestacy laws.

Insurance policies often contain a covenant of good faith and fair dealing.Even if the clause is not in the policy,often courts will imply it.Explain the covenant of good faith and fair dealing and provide an example illustrating when an insurance company might breach this covenant.

Insurance obtained by a limited partnership on the life of the general partner would be

An executor who is related to the testator is not entitled to compensation.

Myron had two children,Cheryl and Pete,who predeceased him.Cheryl had three children and Pete had one child.Myron had a will.Which of the following is true?

Mountain Ridge Bank has been named trustee for a $100,000 trust Fred and Martha Betts established for "the living children of the grantors." List the requirements for establishing a trust.Identify the primary obligation of the trustee and discuss the fiduciary duty of the trustee.

Liability policies,such as personal liability,professional malpractice,or business liability insurance,do NOTprotect the insured against

The percentage of people dying without a will is approximately

Dr.Gavornne advises his very ill patients to prepare a living will.The purpose of a living will is to

April purchased a life insurance policy on herself.On her death,the proceeds of the insurance were to be paid to her minor child,Ryan.Ryan is the beneficiary.

In purchasing life insurance,Kelsey concealed the fact that she has a muscular disease.The insurance company can void the policy if the muscular disease is found to be a material fact.

Jose and Juanita are first cousins.Jose lives in San Francisco,California;Juanita lives in Toronto,Canada.The two have met only once in life,and may never meet again.Nonetheless,because they are blood relatives,Juanita has an insurable interest in Jose's life.

Sarah has car insurance.While driving her automobile,Sarah negligently ran a red light and hit Vi's car.Which type of coverage will pay for the damage done to Vi's car?

Which of the following is NOTrequired to create a valid trust?

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