Exam 16: Estate Planning: Saving Your Heirs Money and Headaches

A ________ is a trust that distributes income according to need,as determined by the discretion of the trustee rather than according to some preset formula.

Only about ________ Americans have created a trust as part of an estate plan.

For someone who dies intestate,or without a valid will,________ and the applicable state laws allow for the orderly distribution of the estate.

The difference between a testamentary trust and a living trust is that a testamentary trust

________ is a type of ownership where two or more individuals share asset ownership,but the asset is passed to the deceased owner's estate and is distributed according to his or her will.

Giving assets away as a gift reduces the value of your estate and allows you to help your heirs while you're still alive.

What methods exist to avoid probate,or to establish non-probate property?

We may prepare a ________ to appoint someone to legally act on our behalf in the event we become mentally incapacitated and a ________ to state our wishes in the event of a terminal illness or injury.

Which of the following does not have to be paid out of your estate before distribution to your heirs?

A(n)________ is a trust established to transfer assets to your children,while allowing the surviving spouse access to funds in the trust,if necessary.Trust assets are distributed to the children tax free upon the death of the surviving spouse.

You and your brother have decided to invest in the stock market together.You will put in $5,000 each and open a single account at a brokerage.How should the ownership of this account be established if both of you wish the other to keep all the money in the event that the other should die?

A will created by an attorney cannot be contested.

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

All of the following are commonly used estate planning tools except

A trust in which you relinquish title and control of the assets when they are placed in the trust,which becomes a separate legal entity,is called a(n)

________ is a type of ownership that exists only between married couples.

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?

A legal entity in which you control the assets and can receive income,but also have the option to leave or remove assets,is called a(n)

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