Question 1

The U.S. tax code allows ________ to transfer the entire estate to the survivor tax-free, assuming the recipient is a U.S. citizen.

Accepted Answer

A)  a generation-skipping clause 
B)  gift taxes 
C)  a common disaster clause 
D)  tenancy in common 
E)  an unlimited marital deduction 
A)  a generation-skipping clause 
B)  gift taxes 
C)  a common disaster clause 
D)  tenancy in common 
E)  an unlimited marital deduction

Question 2

The purpose of a ________ trust is to reduce estate tax liability when one spouse predeceases the other.

Accepted Answer

A)  sprinkling 
B)  family 
C)  Q-TIP 
D)  revocable 
A)  sprinkling 
B)  family 
C)  Q-TIP 
D)  revocable

Question 3

If you have children from a previous marriage and you get remarried and own property jointly with your new spouse, then tenancy by the entirety should be sufficient for you if you wish your children to inherit your property.

Accepted Answer

A) True 
 B)False

Question 4

What does the generation skipping tax do?

Accepted Answer

A)  It imposed additional tax on gifts and bequests that are made from grandparent to grandchild. 
B)  It allows grandparents to skip paying taxes on funds gifted to grandchildren. 
C)  It encourages parents to skip leaving funds to their own children and to plan on leaving their estate to their grandchildren. 
D)  All of the above 
E)  none of the above 
A)  It imposed additional tax on gifts and bequests that are made from grandparent to grandchild. 
B)  It allows grandparents to skip paying taxes on funds gifted to grandchildren. 
C)  It encourages parents to skip leaving funds to their own children and to plan on leaving their estate to their grandchildren. 
D)  All of the above 
E)  none of the above

Question 5

There is no limit to the size of transfers that can be made between spouses on a tax-free basis.

Accepted Answer

A) True 
 B)False

Question 6

Make a list of ways to avoid probate.

Accepted Answer

1.Establish joint ow

Question 7

Give five good reasons to have a will.

Accepted Answer

1.to have control over the guardianship

Question 8

The unified tax credit effectively nullifies the taxes on the first $5 million of one's estate.

Accepted Answer

A) True 
 B)False

Question 9

A will can be amended by a codicil for relatively minor changes.

Accepted Answer

A) True 
 B)False

Question 10

Herbert's will is missing the section revoking any earlier wills. A young lawyer prepared the will and made this oversight. What dangers are present because of this omission?

Accepted Answer

A)  There may be a prior conflicting will. 
B)  Multiple wills make a mess out of the probate process. 
C)  The probate process will slow down tremendously. 
D)  It could be many years before the heirs receive their inheritance. 
E)  all of the above 
A)  There may be a prior conflicting will. 
B)  Multiple wills make a mess out of the probate process. 
C)  The probate process will slow down tremendously. 
D)  It could be many years before the heirs receive their inheritance. 
E)  all of the above

Question 11

Which of the following is a disadvantage of joint ownership?

Accepted Answer

A)  Jointly owned assets avoid probate. 
B)  It makes it legal for one party to "take the money and run" 
C)  It discourages compromise in the case of a divorce. 
D)  None of the above is a disadvantage of joint ownership. 
A)  Jointly owned assets avoid probate. 
B)  It makes it legal for one party to "take the money and run" 
C)  It discourages compromise in the case of a divorce. 
D)  None of the above is a disadvantage of joint ownership.

Question 12

The introductory statement of a will identifies whose will it is and revokes any prior wills.

Accepted Answer

A) True 
 B)False

Question 13

Identify three advantages and three disadvantages of irrevocable living trusts.

Accepted Answer

Advantages of irrevocable living trusts

Question 14

John Kennedy Jr. and his wife Caroline both perished in the same plane crash. Which of the following clauses would identify who is assumed to have perished first?

Accepted Answer

A)  Appointment clause 
B)  Common disaster clause 
C)  Attestation clause 
D)  Witness clause 
E)  Bimodal death clause 
A)  Appointment clause 
B)  Common disaster clause 
C)  Attestation clause 
D)  Witness clause 
E)  Bimodal death clause

Question 15

You and your spouse wish to give each of your three grandchildren a yearly tax-free gift from your estate. If you give each of your three grandchildren the maximum amount allowed by law, what is the total amount that you as a couple would pay out in gifts in 2011?

Accepted Answer

A)  $12,000 per year 
B)  $36,000 per year 
C)  $48,000 per year 
D)  $78,000 per year 
A)  $12,000 per year 
B)  $36,000 per year 
C)  $48,000 per year 
D)  $78,000 per year

Question 16

Identify three advantages and three disadvantages of revocable living trusts.

Accepted Answer

Advantages of revocable living trusts in

Question 17

Describe the typical funeral and administrative expenses.

Accepted Answer

Typical funeral expenses include burial

Question 18

A will created by an attorney cannot be contested.

Accepted Answer

A) True 
 B)False

Question 19

Gifts reduce the taxable value of your estate and allow you to help out your heirs while you're still alive.

Accepted Answer

A) True 
 B)False

Question 20

A living will allows you to state your wishes regarding medical treatment in the event of an illness or injury that renders you unable to make decisions regarding your health care.

Accepted Answer

A) True 
 B)False

The U.S. tax code allows ________ to transfer the entire estate to the survivor tax-free, assuming the recipient is a U.S. citizen.

The purpose of a ________ trust is to reduce estate tax liability when one spouse predeceases the other.

If you have children from a previous marriage and you get remarried and own property jointly with your new spouse, then tenancy by the entirety should be sufficient for you if you wish your children to inherit your property.

What does the generation skipping tax do?

There is no limit to the size of transfers that can be made between spouses on a tax-free basis.

Make a list of ways to avoid probate.

Give five good reasons to have a will.

The unified tax credit effectively nullifies the taxes on the first $5 million of one's estate.

A will can be amended by a codicil for relatively minor changes.

Herbert's will is missing the section revoking any earlier wills. A young lawyer prepared the will and made this oversight. What dangers are present because of this omission?

Which of the following is a disadvantage of joint ownership?

The introductory statement of a will identifies whose will it is and revokes any prior wills.

Identify three advantages and three disadvantages of irrevocable living trusts.

John Kennedy Jr. and his wife Caroline both perished in the same plane crash. Which of the following clauses would identify who is assumed to have perished first?

You and your spouse wish to give each of your three grandchildren a yearly tax-free gift from your estate. If you give each of your three grandchildren the maximum amount allowed by law, what is the total amount that you as a couple would pay out in gifts in 2011?

Identify three advantages and three disadvantages of revocable living trusts.

Describe the typical funeral and administrative expenses.

A will created by an attorney cannot be contested.

Gifts reduce the taxable value of your estate and allow you to help out your heirs while you're still alive.

A living will allows you to state your wishes regarding medical treatment in the event of an illness or injury that renders you unable to make decisions regarding your health care.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Financial Life Events Fitting the Pieces Together

Filters

Exam 17: Estate Planning: Saving Your Heirs Money and Headaches

The U.S. tax code allows ________ to transfer the entire estate to the survivor tax-free, assuming the recipient is a U.S. citizen.

The purpose of a ________ trust is to reduce estate tax liability when one spouse predeceases the other.

If you have children from a previous marriage and you get remarried and own property jointly with your new spouse, then tenancy by the entirety should be sufficient for you if you wish your children to inherit your property.

What does the generation skipping tax do?

There is no limit to the size of transfers that can be made between spouses on a tax-free basis.

Make a list of ways to avoid probate.

Give five good reasons to have a will.

The unified tax credit effectively nullifies the taxes on the first $5 million of one's estate.

A will can be amended by a codicil for relatively minor changes.

Herbert's will is missing the section revoking any earlier wills. A young lawyer prepared the will and made this oversight. What dangers are present because of this omission?

Which of the following is a disadvantage of joint ownership?

The introductory statement of a will identifies whose will it is and revokes any prior wills.

Identify three advantages and three disadvantages of irrevocable living trusts.

John Kennedy Jr. and his wife Caroline both perished in the same plane crash. Which of the following clauses would identify who is assumed to have perished first?

You and your spouse wish to give each of your three grandchildren a yearly tax-free gift from your estate. If you give each of your three grandchildren the maximum amount allowed by law, what is the total amount that you as a couple would pay out in gifts in 2011?

Identify three advantages and three disadvantages of revocable living trusts.

Describe the typical funeral and administrative expenses.

A will created by an attorney cannot be contested.

Gifts reduce the taxable value of your estate and allow you to help out your heirs while you're still alive.

A living will allows you to state your wishes regarding medical treatment in the event of an illness or injury that renders you unable to make decisions regarding your health care.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Financial Life Events Fitting the Pieces Together

Filters