Question 1

Which of the following is not true of a Credit-Shelter trust?

Accepted Answer

A)  It is also known as a residuary trust.
B)  It allows $11.18 million (in 2018) of every estate to pass free of federal estate taxes to your spouse.
C)  Only an estate of more than $22.36 million is taxable for a married couple.
D)  The exemptions allowed by the Tax Cuts and Jobs Act of 2017 never expire.
E)  It is also known as a bypass trust.

Question 2

A beneficiary is a person who has been named to receive property under the will.

Accepted Answer

A) True 
 B)False

Question 3

What are some benefits of establishing a trust?

Accepted Answer

Your individual circumstances dictate wh...

Question 4

Estate planning is useful only to rich and elderly people.

Accepted Answer

A) True 
 B)False

Question 5

A federal tax levied on the value of the inheritance of a deceased person to transmit his or her property and life insurance at death is called a(n) ________ tax.

Accepted Answer

A)  estate income
B)  trust income
C)  inheritance
D)  gift
E)  estate

Question 6

Which one of the following statements is correct?

Accepted Answer

A)  An estate plan is usually implemented by a will and trust agreements.
B)  Most people do extensive estate planning.
C)  Most people think they will live forever.
D)  People should not worry about estate planning until they are age 65.
E)  Estate planning is really only necessary if you are wealthy. A

Question 7

Brenda Johnson has used a preprinted form that she got from the internet to create her will.However,she was unhappy with one section of the will and crossed out the parts she didn't like and hand wrote the changes she wanted.The changes that she made most likely made her will:

Accepted Answer

A)  invalid.
B)  an A/B trust.
C)  a letter of last instruction.
D)  a marital trust.
E)  an exemption trust.

Question 8

A tax levied on an heir to receive all or part of the estate and life insurance proceeds of a deceased person is called a(n) ________ tax.

Accepted Answer

A)  estate income
B)  trust income
C)  inheritance
D)  gift
E)  estate

Question 9

To be valid,a will must:

Accepted Answer

A)  be notarized.
B)  be recorded in a court of law.
C)  be signed in the presence of two witnesses.
D)  be orally stated in front of two witnesses.
E)  not name an executor as the court will appoint one.

Question 10

If you establish a(n) ________ trust,you retain the right to end the trust or change its terms during your lifetime.

Accepted Answer

A)  irrevocable
B)  revocable
C)  living
D)  self-declaration
E)  testamentary

Question 11

Last-minute "death-bed" estate planning may fail to carry out your wishes.

Accepted Answer

A) True 
 B)False  True

Question 12

James Fitzwater has created a will that leaves exactly $2 million to his wife in anticipation of her income needs.What type of will has James created?

Accepted Answer

A)  Simple
B)  Traditional marital share
C)  Exemption trust
D)  Stated dollar amount
E)  Living will

Question 13

Which of the following are rules to remember when writing a will?

Accepted Answer

A)  In most states,you must be 18 years of age or older.
B)  A will must be written in sound judgment and mental capacity to be valid.
C)  The document must clearly state that it is your will.
D)  The will must name an executor.
E)  All of these are rules to remember.

Question 14

Estate planning is an integral part of financial planning.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true of a Testamentary trust?

Accepted Answer

A)  It does not protect your assets from the probate process.
B)  It is valuable for experienced beneficiaries.
C)  It becomes effect upon your signature.
D)  It is not established by your will.
E)  It does not provide the benefit of asset management.

Question 16

The adjusted gross estate is equal to the gross estate minus debts and costs.

Accepted Answer

A) True 
 B)False

Question 17

If your beneficiary is too young or unable to handle money wisely,which kind of trust allows the beneficiary to receive small amounts of money at specified intervals?

Accepted Answer

A)  A spendthrift trust
B)  A charitable lead trust
C)  A charitable reminder trust
D)  A self-declaration trust
E)  A generation-skipping trust

Question 18

Generally,the cost of writing a will is more than that for writing a living trust.

Accepted Answer

A) True 
 B)False  False

Question 19

Brenda Johnson has used a preprinted form that she got from a stationery store to create her will.What type of will has she created?

Accepted Answer

A)  Holographic
B)  Formal
C)  Statutory
D)  Casual
E)  Living

Question 20

Under what type of will does everything pass to your spouse,with the exception of an amount equal to the exemption,which passes into trust?

Accepted Answer

A)  Simple
B)  Traditional marital share
C)  Exemption trust
D)  Stated dollar amount
E)  Living

Exam 19: Estate Planning

Which of the following is not true of a Credit-Shelter trust?

Correct AnswerverifiedShow Answer

A beneficiary is a person who has been named to receive property under the will.

Correct AnswerverifiedShow Answer

What are some benefits of establishing a trust?

Correct AnswerverifiedYour individual circumstances dictate wh...View AnswerShow Answer

Estate planning is useful only to rich and elderly people.

Correct AnswerverifiedShow Answer

A federal tax levied on the value of the inheritance of a deceased person to transmit his or her property and life insurance at death is called a(n) ________ tax.

Correct AnswerverifiedShow Answer

Which one of the following statements is correct?

Correct AnswerverifiedA

Brenda Johnson has used a preprinted form that she got from the internet to create her will.However,she was unhappy with one section of the will and crossed out the parts she didn't like and hand wrote the changes she wanted.The changes that she made most likely made her will:

Correct AnswerverifiedShow Answer

A tax levied on an heir to receive all or part of the estate and life insurance proceeds of a deceased person is called a(n) ________ tax.

Correct AnswerverifiedShow Answer

To be valid,a will must:

Correct AnswerverifiedShow Answer

If you establish a(n) ________ trust,you retain the right to end the trust or change its terms during your lifetime.

Correct AnswerverifiedShow Answer

Last-minute "death-bed" estate planning may fail to carry out your wishes.

Correct AnswerverifiedTrue

James Fitzwater has created a will that leaves exactly $2 million to his wife in anticipation of her income needs.What type of will has James created?

Correct AnswerverifiedShow Answer

Which of the following are rules to remember when writing a will?

Correct AnswerverifiedShow Answer

Estate planning is an integral part of financial planning.

Correct AnswerverifiedShow Answer

Which of the following is true of a Testamentary trust?

Correct AnswerverifiedShow Answer

The adjusted gross estate is equal to the gross estate minus debts and costs.

Correct AnswerverifiedShow Answer

If your beneficiary is too young or unable to handle money wisely,which kind of trust allows the beneficiary to receive small amounts of money at specified intervals?

Correct AnswerverifiedShow Answer

Generally,the cost of writing a will is more than that for writing a living trust.

Correct AnswerverifiedFalse

Brenda Johnson has used a preprinted form that she got from a stationery store to create her will.What type of will has she created?

Correct AnswerverifiedShow Answer

Under what type of will does everything pass to your spouse,with the exception of an amount equal to the exemption,which passes into trust?

Correct AnswerverifiedShow Answer

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Your individual circumstances dictate wh...
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A

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True

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