Question 1

In which of the following does the grantor no longer own the assets of the trust?

Accepted Answer

A)  Revocable living trust 
B)  Irrevocable living trust 
C)  retirement trust 
D)  Durable attorney's trust 
A)  Revocable living trust 
B)  Irrevocable living trust 
C)  retirement trust 
D)  Durable attorney's trust

Question 2

Which of the following statements about the letter of last instruction is false?

Accepted Answer

A)  It describes your preferences for your funeral. 
B)  It indicates whether you wish to be cremated. 
C)  It legally determines your heirs. 
D)  It indicates where your key documents are. 
A)  It describes your preferences for your funeral. 
B)  It indicates whether you wish to be cremated. 
C)  It legally determines your heirs. 
D)  It indicates where your key documents are.

Question 3

A will's key components may include all of the following, except

Accepted Answer

A)  distribution of the estate. 
B)  naming of the executor. 
C)  appointing of a guardian. 
D)  All of these are correct. 
A)  distribution of the estate. 
B)  naming of the executor. 
C)  appointing of a guardian. 
D)  All of these are correct.

Question 4

An executor, also called your ________, is named in your will to carry out your instructions regarding how your assets will be distributed.

Accepted Answer

A)  personal representative 
B)  attorney 
C)  friend 
D)  brother-in-law 
A)  personal representative 
B)  attorney 
C)  friend 
D)  brother-in-law

Question 5

A trust involves the transfer of assets to a third party who manages these assets for a beneficiary.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not required to be an executor of an estate?

Accepted Answer

A)  U.S. citizenship 
B)  Blood relationship to the deceased 
C)  Legal age 
D)  Not a convicted felon 
A)  U.S. citizenship 
B)  Blood relationship to the deceased 
C)  Legal age 
D)  Not a convicted felon

Question 7

In setting goals for estate planning, you should consider all of the following, except

Accepted Answer

A)  creating a will. 
B)  waiting until just the right time to engage in planning. 
C)  establishing a plan for trusts or gifts. 
D)  determining the need for a living will. 
A)  creating a will. 
B)  waiting until just the right time to engage in planning. 
C)  establishing a plan for trusts or gifts. 
D)  determining the need for a living will.

Question 8

Estate taxes may be levied by

Accepted Answer

A)  the federal government only. 
B)  state governments only. 
C)  both federal and state governments. 
D)  foreign governments only. 
A)  the federal government only. 
B)  state governments only. 
C)  both federal and state governments. 
D)  foreign governments only.

Question 9

If you die without a will, you are said to have died

Accepted Answer

A)  intestate. 
B)  unlucky. 
C)  tragically. 
D)  irresponsibly. 
A)  intestate. 
B)  unlucky. 
C)  tragically. 
D)  irresponsibly.

Question 10

A standard family trust is all of the following, except

Accepted Answer

A)  it is established for children in a family. 
B)  it is created by wills. 
C)  it is used to minimize taxes. 
D)  it is a living trust. 
A)  it is established for children in a family. 
B)  it is created by wills. 
C)  it is used to minimize taxes. 
D)  it is a living trust.

Question 11

Minor changes to a will can be made with a simple document called a codicil.

Accepted Answer

A) True 
 B)False

Question 12

To create a will, a person must be of legal age, be mentally competent, and not be subject to undue influence or threats from others.

Accepted Answer

A) True 
 B)False

Question 13

All of the following are true about the executor of a will, except

Accepted Answer

A)  the executor is selected by the creator of the will. 
B)  the executor may be paid for his or her services by the estate. 
C)  the executor is generally paid 5% of the value of the estate for his or her services. 
D)  the executor may elect not to be paid for his or her services. 
A)  the executor is selected by the creator of the will. 
B)  the executor may be paid for his or her services by the estate. 
C)  the executor is generally paid 5% of the value of the estate for his or her services. 
D)  the executor may elect not to be paid for his or her services.

Question 14

You are retired and have built a significant estate valued well over the $5.43 million federal tax-free limit. You have no significant financial responsibilities and live very comfortably on the cash flow from your portfolio. At this point in your financial planning, which of the following have become less important and should be considered for cancellation or reduction?

Accepted Answer

A)  Your bond holdings 
B)  Your term life insurance policy 
C)  Your stock holdings 
D)  Your health insurance policy 
A)  Your bond holdings 
B)  Your term life insurance policy 
C)  Your stock holdings 
D)  Your health insurance policy

Question 15

The recipient of a gift within the allowable amount

Accepted Answer

A)  does not have to report the gift, and it is not subject to taxes. 
B)  does have to report the gift, and it is subject to taxes. 
C)  must pay tax on the gift at the capital gains rate. 
D)  must pay tax on the gift at the ordinary income rate. 
A)  does not have to report the gift, and it is not subject to taxes. 
B)  does have to report the gift, and it is subject to taxes. 
C)  must pay tax on the gift at the capital gains rate. 
D)  must pay tax on the gift at the ordinary income rate.

Question 16

Use the following two columns of items to answer the matching questions below:
-codicil
A)persons specified in a will to receive part of an estate
B)dying without a will
C)a document that specifies changes in an existing will
D)the legal process that declares a will valid and ensures orderly distribution of assets
E)a legal request for how your estate should be distributed upon your death
F)a will suitable for a smaller estate distributed to the spouse
G)the person designated in a will to execute instructions regarding the distribution of your assets

Accepted Answer

The answer of Use the following two columns of items...

Question 17

If your estate is $500,000 over the maximum tax-exempt limit, one way to avoid paying estate tax on the excess would be to

Accepted Answer

A)  hide $500,000 in cash and bury it in the yard, leaving a secret map. 
B)  order the estate to make a $500,000 charitable contribution since the amount contributed would not be subject to estate tax. 
C)  gift the $500,000 to your children after your death but before the estate is settled. 
D)  None of these schemes will avoid the estate tax. 
A)  hide $500,000 in cash and bury it in the yard, leaving a secret map. 
B)  order the estate to make a $500,000 charitable contribution since the amount contributed would not be subject to estate tax. 
C)  gift the $500,000 to your children after your death but before the estate is settled. 
D)  None of these schemes will avoid the estate tax.

Question 18

The amount of an estate that is exempt from federal estate taxes in 2018 is

Accepted Answer

A)  $11.2 million. 
B)  $3.25 million. 
C)  $850,000. 
D)  $10.5 million. 
A)  $11.2 million. 
B)  $3.25 million. 
C)  $850,000. 
D)  $10.5 million.

Question 19

The person designated in a will to execute your instructions regarding the distribution of your assets is called a(n)

Accepted Answer

A)  executor. 
B)  guardian. 
C)  business associate. 
D)  attorney. 
A)  executor. 
B)  guardian. 
C)  business associate. 
D)  attorney.

Question 20

The person who establishes and funds a trust is known as the

Accepted Answer

A)  executor. 
B)  administrator. 
C)  grantor. 
D)  testator. 
A)  executor. 
B)  administrator. 
C)  grantor. 
D)  testator.

In which of the following does the grantor no longer own the assets of the trust?

Which of the following statements about the letter of last instruction is false?

A will's key components may include all of the following, except

An executor, also called your ________, is named in your will to carry out your instructions regarding how your assets will be distributed.

A trust involves the transfer of assets to a third party who manages these assets for a beneficiary.

Which of the following is not required to be an executor of an estate?

In setting goals for estate planning, you should consider all of the following, except

Estate taxes may be levied by

If you die without a will, you are said to have died

A standard family trust is all of the following, except

Minor changes to a will can be made with a simple document called a codicil.

To create a will, a person must be of legal age, be mentally competent, and not be subject to undue influence or threats from others.

All of the following are true about the executor of a will, except

The recipient of a gift within the allowable amount

If your estate is $500,000 over the maximum tax-exempt limit, one way to avoid paying estate tax on the excess would be to

The amount of an estate that is exempt from federal estate taxes in 2018 is

The person designated in a will to execute your instructions regarding the distribution of your assets is called a(n)

The person who establishes and funds a trust is known as the

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Integrating the Components of a Financial Plan

Filters

Exam 20: Estate Planning

In which of the following does the grantor no longer own the assets of the trust?

Which of the following statements about the letter of last instruction is false?

A will's key components may include all of the following, except

An executor, also called your ________, is named in your will to carry out your instructions regarding how your assets will be distributed.

A trust involves the transfer of assets to a third party who manages these assets for a beneficiary.

Which of the following is not required to be an executor of an estate?

In setting goals for estate planning, you should consider all of the following, except

Estate taxes may be levied by

If you die without a will, you are said to have died

A standard family trust is all of the following, except

Minor changes to a will can be made with a simple document called a codicil.

To create a will, a person must be of legal age, be mentally competent, and not be subject to undue influence or threats from others.

All of the following are true about the executor of a will, except

The recipient of a gift within the allowable amount

If your estate is $500,000 over the maximum tax-exempt limit, one way to avoid paying estate tax on the excess would be to

The amount of an estate that is exempt from federal estate taxes in 2018 is

The person designated in a will to execute your instructions regarding the distribution of your assets is called a(n)

The person who establishes and funds a trust is known as the

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Integrating the Components of a Financial Plan

Filters