Question 1

The unified rate schedule applies to federal _____ taxes.

Accepted Answer

A) sales and gift 
B) gift and service 
C) gift and estate 
D) infrastructure and estate 
E) estate and professional 
A) sales and gift 
B) gift and service 
C) gift and estate 
D) infrastructure and estate 
E) estate and professional

Question 2

A written and legally enforceable document expressing how a person's property should be distributed upon his or her death is known as a(n):

Accepted Answer

A) will. 
B) ethical paper. 
C) memorandum. 
D) letter of last instructions. 
E) power of attorney. 
A) will. 
B) ethical paper. 
C) memorandum. 
D) letter of last instructions. 
E) power of attorney.

Question 3

A _____ is applied to reduce estate tax when a large amount of real estate is for sale in one area.

Accepted Answer

A) marketability discount 
B) minority discount 
C) blockage discount 
D) property discount 
E) land discount 
A) marketability discount 
B) minority discount 
C) blockage discount 
D) property discount 
E) land discount

Question 4

A credit shelter trust produced the same effect as the portability rule.

Accepted Answer

A) True 
 B)False

Question 5

The unified tax credit can be applied against the:

Accepted Answer

A) total income of the beneficiary of a will. 
B) tentative tax on the estate tax base. 
C) adjusted gross estate. 
D) total estate taxes. 
E) gross estate. 
A) total income of the beneficiary of a will. 
B) tentative tax on the estate tax base. 
C) adjusted gross estate. 
D) total estate taxes. 
E) gross estate.

Question 6

Joint ownership of assets is an effective substitute for a will.

Accepted Answer

A) True 
 B)False

Question 7

The applicable exclusion amount from estate tax for 2018 was:

Accepted Answer

A) $2,410,000. 
B) $3,780,000. 
C) $5,430,000. 
D) $7,820,000. 
E) $11,180,000. 
A) $2,410,000. 
B) $3,780,000. 
C) $5,430,000. 
D) $7,820,000. 
E) $11,180,000.

Question 8

To minimize the transfer tax on the transfer of a life insurance policy, individuals must transfer it to their siblings.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an advantage of giving gifts?

Accepted Answer

A) Gifts avoid depreciation in value. 
B) Gift tax exclusion attracts more estate tax. 
C) Marital deduction allows gifts to be tax free. 
D) The annual inclusion amount increases with gifts. 
E) There is no tax exemption for charitable contributions. 
A) Gifts avoid depreciation in value. 
B) Gift tax exclusion attracts more estate tax. 
C) Marital deduction allows gifts to be tax free. 
D) The annual inclusion amount increases with gifts. 
E) There is no tax exemption for charitable contributions.

Question 10

The objective of estate planning is to:

Accepted Answer

A) avoid the disposition of assets to the possible beneficiaries. 
B) maximize the taxes involved in the transfer of assets. 
C) create a situation of intestacy. 
D) determine how to invest the estate's assets after your death. 
E) maximize the usefulness of people's assets during their lives. 
A) avoid the disposition of assets to the possible beneficiaries. 
B) maximize the taxes involved in the transfer of assets. 
C) create a situation of intestacy. 
D) determine how to invest the estate's assets after your death. 
E) maximize the usefulness of people's assets during their lives.

Question 11

A trust designed to help couples gain full use out of each spouse's applicable exclusion amount is the _____ trust.

Accepted Answer

A) crummey 
B) credit shelter 
C) charitable lead 
D) special needs 
E) charitable remainder 
A) crummey 
B) credit shelter 
C) charitable lead 
D) special needs 
E) charitable remainder

Question 12

Which of the following statements about the portability of the unified transfer tax credit is true?

Accepted Answer

A) When the first spouse dies, then any unused applicable exclusion amount will carry over to the other spouse. 
B) When the first spouse dies, then any unused applicable exclusion amount will carry over to the government. 
C) When the first spouse dies and is left with an excess amount after using the applicable exclusion, then the excess amount will carry over to a trust. 
D) It is a method of reducing gift taxes with the consent of the other spouse in which the gift can be treated as if each had been given one-half of it. 
E) It is a method of transferring assets between spouses, either by gift or through estate. 
A) When the first spouse dies, then any unused applicable exclusion amount will carry over to the other spouse. 
B) When the first spouse dies, then any unused applicable exclusion amount will carry over to the government. 
C) When the first spouse dies and is left with an excess amount after using the applicable exclusion, then the excess amount will carry over to a trust. 
D) It is a method of reducing gift taxes with the consent of the other spouse in which the gift can be treated as if each had been given one-half of it. 
E) It is a method of transferring assets between spouses, either by gift or through estate.

Question 13

A document that legally modifies a will without revoking it is called a(n):

Accepted Answer

A) codicil. 
B) letter of last instructions. 
C) living will. 
D) ethical will. 
E) memorandum. 
A) codicil. 
B) letter of last instructions. 
C) living will. 
D) ethical will. 
E) memorandum.

Question 14

A trust that comes into existence only after the will is probated is known as a _____ trust.

Accepted Answer

A) testamentary 
B) living 
C) tenancy 
D) codicil 
E) revocable 
A) testamentary 
B) living 
C) tenancy 
D) codicil 
E) revocable

Question 15

Insufficient capital can cause problems in estate planning.

Accepted Answer

A) True 
 B)False

Question 16

Your gross estate is reduced by the _____ to determine the adjusted gross estate.

Accepted Answer

A) state death tax credit 
B) orphan's deduction 
C) marital deduction 
D) funeral and administrative expenses 
E) previous year's income tax 
A) state death tax credit 
B) orphan's deduction 
C) marital deduction 
D) funeral and administrative expenses 
E) previous year's income tax

Question 17

A trust that provides for management continuity and income flow even after the grantor's death and allows assets to bypass probate, but which provides no income or estate tax advantages, is a(n)_____ trust.

Accepted Answer

A) revocable living 
B) ethical living 
C) testamentary 
D) charitable lead 
E) credit shelter 
A) revocable living 
B) ethical living 
C) testamentary 
D) charitable lead 
E) credit shelter

Question 18

A letter of last instructions is a(n):

Accepted Answer

A) legal document that authorizes another person to take over someone's financial affairs and act on his or her behalf. 
B) document that precisely states the treatments a person wants if he or she becomes terminally ill. 
C) written power of attorney authorizing an individual to make health care decisions on behalf of the principal when the principal is unable to make such decisions. 
D) informal memorandum that is separate from a will and contains suggestions or recommendations for carrying out a decedent's wishes. 
E) personal statement left for family, friends, and community that shares your values, blessings, life's lessons, and hopes and dreams for the future. 
A) legal document that authorizes another person to take over someone's financial affairs and act on his or her behalf. 
B) document that precisely states the treatments a person wants if he or she becomes terminally ill. 
C) written power of attorney authorizing an individual to make health care decisions on behalf of the principal when the principal is unable to make such decisions. 
D) informal memorandum that is separate from a will and contains suggestions or recommendations for carrying out a decedent's wishes. 
E) personal statement left for family, friends, and community that shares your values, blessings, life's lessons, and hopes and dreams for the future.

Question 19

Which of the following best describes a situation of intestacy?

Accepted Answer

A) George has insufficient medical insurance to cover the cost of medical treatment he needs. 
B) Jill died without heirs. 
C) Eduardo became physically challenged after he was injured in a car accident. 
D) Lily died without a valid will. 
E) Mason died without any probate property. 
A) George has insufficient medical insurance to cover the cost of medical treatment he needs. 
B) Jill died without heirs. 
C) Eduardo became physically challenged after he was injured in a car accident. 
D) Lily died without a valid will. 
E) Mason died without any probate property.

Question 20

Charitable contributions given during one's lifetime provide an income tax deduction and remove property from the estate.

Accepted Answer

A) True 
 B)False

The unified rate schedule applies to federal _____ taxes.

A written and legally enforceable document expressing how a person's property should be distributed upon his or her death is known as a(n):

A _____ is applied to reduce estate tax when a large amount of real estate is for sale in one area.

A credit shelter trust produced the same effect as the portability rule.

The unified tax credit can be applied against the:

Joint ownership of assets is an effective substitute for a will.

The applicable exclusion amount from estate tax for 2018 was:

To minimize the transfer tax on the transfer of a life insurance policy, individuals must transfer it to their siblings.

Which of the following is an advantage of giving gifts?

The objective of estate planning is to:

A trust designed to help couples gain full use out of each spouse's applicable exclusion amount is the _____ trust.

Which of the following statements about the portability of the unified transfer tax credit is true?

A document that legally modifies a will without revoking it is called a(n):

A trust that comes into existence only after the will is probated is known as a _____ trust.

Insufficient capital can cause problems in estate planning.

Your gross estate is reduced by the _____ to determine the adjusted gross estate.

A trust that provides for management continuity and income flow even after the grantor's death and allows assets to bypass probate, but which provides no income or estate tax advantages, is a(n)_____ trust.

A letter of last instructions is a(n):

Which of the following best describes a situation of intestacy?

Charitable contributions given during one's lifetime provide an income tax deduction and remove property from the estate.

Understanding the Financial Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Filters

Exam 15: Preserving Your Estate

The unified rate schedule applies to federal _____ taxes.

A written and legally enforceable document expressing how a person's property should be distributed upon his or her death is known as a(n):

A _____ is applied to reduce estate tax when a large amount of real estate is for sale in one area.

A credit shelter trust produced the same effect as the portability rule.

The unified tax credit can be applied against the:

Joint ownership of assets is an effective substitute for a will.

The applicable exclusion amount from estate tax for 2018 was:

To minimize the transfer tax on the transfer of a life insurance policy, individuals must transfer it to their siblings.

Which of the following is an advantage of giving gifts?

The objective of estate planning is to:

A trust designed to help couples gain full use out of each spouse's applicable exclusion amount is the _____ trust.

Which of the following statements about the portability of the unified transfer tax credit is true?

A document that legally modifies a will without revoking it is called a(n):

A trust that comes into existence only after the will is probated is known as a _____ trust.

Insufficient capital can cause problems in estate planning.

Your gross estate is reduced by the _____ to determine the adjusted gross estate.

A trust that provides for management continuity and income flow even after the grantor's death and allows assets to bypass probate, but which provides no income or estate tax advantages, is a(n)_____ trust.

A letter of last instructions is a(n):

Which of the following best describes a situation of intestacy?

Charitable contributions given during one's lifetime provide an income tax deduction and remove property from the estate.

Understanding the Financial Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Filters