Question 1

The only reason for having a valid will is to have your estate distributed according to your plans.

Accepted Answer

A) True 
 B)False

Question 2

The recipient of gift income within the allowable amount

Accepted Answer

A) does not have to report gift income and is not subject to taxes. 
B) does have to report gift income and is subject to gift taxes. 
C) is taxed at the capital gains rate. 
D) is taxed at the ordinary income rate. 
A) does not have to report gift income and is not subject to taxes. 
B) does have to report gift income and is subject to gift taxes. 
C) is taxed at the capital gains rate. 
D) is taxed at the ordinary income rate.

Question 3

With samples of valid wills being available on Web sites and in book stores,it is not recommended that a person incur the additional expense of hiring a lawyer to write a will.

Accepted Answer

A) True 
 B)False

Question 4

A trust that is created by the terms of the will is called a(n)________ trust.

Accepted Answer

The answer of A trust that is created by the...

Question 5

Probate is the legal process that ensures assets are distributed and guardians of children are appointed as the person who died wished it.

Accepted Answer

A) True 
 B)False

Question 6

In determining estate taxes,the estate is valued by subtracting all liabilities including funeral expenses from the value of all assets including a home.

Accepted Answer

A) True 
 B)False

Question 7

A legal document granting a person the power to make specific health care decisions for you is called a

Accepted Answer

A) living will. 
B) power of attorney. 
C) durable power of attorney for health care. 
D) health care directive. 
A) living will. 
B) power of attorney. 
C) durable power of attorney for health care. 
D) health care directive.

Question 8

Which of the following is not accomplished during probate?

Accepted Answer

A) Payment of claims against the estate 
B) The validation of the will 
C) Determination of legal heirs 
D) Heirs are allowed to trade assets that are left to them 
A) Payment of claims against the estate 
B) The validation of the will 
C) Determination of legal heirs 
D) Heirs are allowed to trade assets that are left to them

Question 9

If a person dies before they prepare a will,they are said to die ________.

Accepted Answer

The answer of If a person dies before they prepare...

Question 10

A simple will would not be appropriate if

Accepted Answer

A) the estate is small. 
B) there is only one child. 
C) the person is married. 
D) the entire estate is to go to the spouse. 
A) the estate is small. 
B) there is only one child. 
C) the person is married. 
D) the entire estate is to go to the spouse.

Question 11

A(n)________ trust is one that cannot be changed.

Accepted Answer

A) revocable 
B) living 
C) irrevocable 
D) standard family 
A) revocable 
B) living 
C) irrevocable 
D) standard family

Question 12

If a person dies without a valid will,the court will appoint an administrator,which results in additional costs being imposed on the estate.

Accepted Answer

A) True 
 B)False

Question 13

Two key goals of estate planning are to ensure that your estate passes to the proper beneficiaries and to ensure that your estate may be insulated from taxes.

Accepted Answer

A) True 
 B)False

Question 14

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 15

A tax-free gift of up to ________ per year can be given to another person.

Accepted Answer

A) $1,000 
B) $5,000 
C) $13,000 
D) $20,000 
A) $1,000 
B) $5,000 
C) $13,000 
D) $20,000

Question 16

Which of the following is not true regarding the evaluation of an estate for tax purposes?

Accepted Answer

A) Assets including a home are included. 
B) Liabilities including home mortgage are subtracted. 
C) Funeral and administrative expenses are subtracted. 
D) Life insurance proceeds are not included. 
A) Assets including a home are included. 
B) Liabilities including home mortgage are subtracted. 
C) Funeral and administrative expenses are subtracted. 
D) Life insurance proceeds are not included.

Question 17

Money donated from an estate to charitable organizations is

Accepted Answer

A) not subject to estate taxes. 
B) added back into the value of an estate for tax purposes. 
C) an itemized deduction on the federal income tax return of the deceased. 
D) allowed a 50% credit against the value of the estate. 
A) not subject to estate taxes. 
B) added back into the value of an estate for tax purposes. 
C) an itemized deduction on the federal income tax return of the deceased. 
D) allowed a 50% credit against the value of the estate.

Question 18

In which of the following do you no longer own the assets of the trust?

Accepted Answer

A) Revocable living trust 
B) Irrevocable living trust 
C) Standard family trust 
D) Credit shelter trust 
A) Revocable living trust 
B) Irrevocable living trust 
C) Standard family trust 
D) Credit shelter trust

Question 19

By using a revocable trust,you can avoid the probate process.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not necessary for a will to be valid?

Accepted Answer

A) All heirs must agree to the terms of the will 
B) The will must be dated 
C) The will must be signed 
D) The person writing the will must be sober at the time the will is written 
A) All heirs must agree to the terms of the will 
B) The will must be dated 
C) The will must be signed 
D) The person writing the will must be sober at the time the will is written

Exam 20: Estate Planning

The only reason for having a valid will is to have your estate distributed according to your plans.

The recipient of gift income within the allowable amount

With samples of valid wills being available on Web sites and in book stores,it is not recommended that a person incur the additional expense of hiring a lawyer to write a will.

A trust that is created by the terms of the will is called a(n)________ trust.

Probate is the legal process that ensures assets are distributed and guardians of children are appointed as the person who died wished it.

In determining estate taxes,the estate is valued by subtracting all liabilities including funeral expenses from the value of all assets including a home.

A legal document granting a person the power to make specific health care decisions for you is called a

Which of the following is not accomplished during probate?

If a person dies before they prepare a will,they are said to die ________.

A simple will would not be appropriate if

A(n)________ trust is one that cannot be changed.

If a person dies without a valid will,the court will appoint an administrator,which results in additional costs being imposed on the estate.

Two key goals of estate planning are to ensure that your estate passes to the proper beneficiaries and to ensure that your estate may be insulated from taxes.

Estate taxes may be levied by

A tax-free gift of up to ________ per year can be given to another person.

Which of the following is not true regarding the evaluation of an estate for tax purposes?

Money donated from an estate to charitable organizations is

In which of the following do you no longer own the assets of the trust?

By using a revocable trust,you can avoid the probate process.

Which of the following is not necessary for a will to be valid?

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

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