Question 1

The Uniform Probate Code has been adopted in all states.

Accepted Answer

A) True 
 B)False

Question 2

If Walter becomes incompetent to manage his affairs,

Accepted Answer

A) his chosen attorney-in-fact can make decisions for him if he appointed the person in a durable power of attorney with a springing power to become effective upon Walter's incompetence. 
B) a court will allow an immediate family member to manage his affairs. 
C) his will becomes effective,and his executor or executrix will manage his business and personal decisions. 
D) ​his property will be placed in a trust until such time as he is able to manage his affairs himself. 
A) his chosen attorney-in-fact can make decisions for him if he appointed the person in a durable power of attorney with a springing power to become effective upon Walter's incompetence. 
B) a court will allow an immediate family member to manage his affairs. 
C) his will becomes effective,and his executor or executrix will manage his business and personal decisions. 
D) ​his property will be placed in a trust until such time as he is able to manage his affairs himself.

Question 3

Victor purchased $1 million of insurance on his home even though the house was only worth $500,000.Victor's house was destroyed by lightning.Under the insurance policy,Victor will be able to recover $1 million.

Accepted Answer

A) True 
 B)False

Question 4

Liability policies,such as personal liability,professional malpractice,or business liability insurance,do NOT protect 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 5

The cheapest life insurance option is

Accepted Answer

A) straight life insurance. 
B) whole life insurance. 
C) casualty insurance. 
D) term insurance. 
A) straight life insurance. 
B) whole life insurance. 
C) casualty insurance. 
D) term insurance.

Question 6

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 7

A short document acknowledging receipt of an application and premium for an insurance policy is called a(n)

Accepted Answer

A) codicil. 
B) binder. 
C) power of attorney. 
D) proxy. 
A) codicil. 
B) binder. 
C) power of attorney. 
D) proxy.

Question 8

Which of the following insurance policies continues for a stated period of time with the premiums increasing with the age of the insured?

Accepted Answer

A) double indemnity 
B) term insurance 
C) annuity contract 
D) comprehensive insurance 
A) double indemnity 
B) term insurance 
C) annuity contract 
D) comprehensive insurance

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Darcy buys a life insurance policy on her own life,under which she pays the annual premiums.The insurance is issued for a specific period,but is renewable for similar periods.Darcy is covered only as long as she makes the payments.There is no cash value portion to the policy.Darcy probably owns

Accepted Answer

A) whole life insurance. 
B) key-person life insurance. 
C) term life insurance. 
D) an annuity. 
A) whole life insurance. 
B) key-person life insurance. 
C) term life insurance. 
D) an annuity.

Question 11

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 12

The only function of a will is to dispose of a person's property upon death.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following does NOT act as a revocation of a will?

Accepted Answer

A) creating a codicil 
B) the testator putting an X through it 
C) physically destroying the will by intentionally shredding it 
D) signing a new will that expressly revokes prior wills 
A) creating a codicil 
B) the testator putting an X through it 
C) physically destroying the will by intentionally shredding it 
D) signing a new will that expressly revokes prior wills

Question 14

In estate planning,a person's direct descendants are called

Accepted Answer

A) issue. 
B) testators. 
C) heirs. 
D) grantors. 
A) issue. 
B) testators. 
C) heirs. 
D) grantors.

Question 15

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

Question 16

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 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

Under the Uniform Anatomical Gift Act,

Accepted Answer

A) an individual may indicate the desire to be an organ donor by putting a provision in his will.The provision will take effect after probate of the will. 
B) the willingness to be an organ donor may be indicated by signing an organ donation card in the presence of one disinterested witness. 
C) family members of a decedent have no right to make a gift of the decedent's organs if the decedent did not make an affirmative indication of the desire to be a donor during her lifetime. 
D) an effective donation may be made by an individual in a will or on a witnessed organ-donation card or by family members after the person's death as long as the person did not indicate a desire not to be a donor. 
A) an individual may indicate the desire to be an organ donor by putting a provision in his will.The provision will take effect after probate of the will. 
B) the willingness to be an organ donor may be indicated by signing an organ donation card in the presence of one disinterested witness. 
C) family members of a decedent have no right to make a gift of the decedent's organs if the decedent did not make an affirmative indication of the desire to be a donor during her lifetime. 
D) an effective donation may be made by an individual in a will or on a witnessed organ-donation card or by family members after the person's death as long as the person did not indicate a desire not to be a donor.

Question 19

Estate planning has two primary goals: to ensure property is distributed as the owner desires and to minimize estate taxes.

Accepted Answer

A) True 
 B)False

Question 20

Per capita means each heir gets an equal share of an estate.

Accepted Answer

A) True 
 B)False

Exam 44: Planning for the Future: Wills, Trusts and Insurance

The Uniform Probate Code has been adopted in all states.

If Walter becomes incompetent to manage his affairs,

Victor purchased $1 million of insurance on his home even though the house was only worth $500,000.Victor's house was destroyed by lightning.Under the insurance policy,Victor will be able to recover $1 million.

Liability policies,such as personal liability,professional malpractice,or business liability insurance,do NOT protect the insured against

The cheapest life insurance option is

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.

A short document acknowledging receipt of an application and premium for an insurance policy is called a(n)

Which of the following insurance policies continues for a stated period of time with the premiums increasing with the age of the insured?

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

Darcy buys a life insurance policy on her own life,under which she pays the annual premiums.The insurance is issued for a specific period,but is renewable for similar periods.Darcy is covered only as long as she makes the payments.There is no cash value portion to the policy.Darcy probably owns

Which of the following is true about wills?

The only function of a will is to dispose of a person's property upon death.

Which of the following does NOT act as a revocation of a will?

In estate planning,a person's direct descendants are called

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?

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.

Under the Uniform Anatomical Gift Act,

Estate planning has two primary goals: to ensure property is distributed as the owner desires and to minimize estate taxes.

Per capita means each heir gets an equal share of an estate.

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