Certified Estate Planner (Cep) Exam
Question And Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A
Instant Download Pdf
1. The primary goal of estate planning is to:
A. Avoid all taxes
B. Transfer wealth according to the client’s wishes
C. Eliminate probate entirely
D. Increase investment returns
Answer: B
Rationale: Estate planning focuses on ensuring assets are distributed according
to the client’s intentions while balancing tax, legal, and family considerations.
2. Which document directs the distribution of assets at death?
A. Living trust
B. Durable power of attorney
C. Will
D. Healthcare proxy
Answer: C
Rationale: A will legally specifies how assets are distributed after death and
names executors and guardians.
3. Probate is best described as:
A. A tax audit
B. Court-supervised estate administration
C. Trust funding process
D. Asset valuation method
,Answer: B
Rationale: Probate is the legal process through which a deceased person’s estate
is administered under court supervision.
4. Which asset typically avoids probate?
A. Individually owned real estate
B. Assets titled in a revocable trust
C. Personal property
D. Business inventory
Answer: B
Rationale: Assets held in a properly funded trust pass outside probate.
5. A revocable living trust becomes irrevocable:
A. When signed
B. At funding
C. At death of the grantor
D. After court approval
Answer: C
Rationale: Revocable trusts generally become irrevocable upon the grantor’s
death.
6. Who creates a trust?
A. Trustee
B. Beneficiary
C. Grantor
D. Executor
Answer: C
Rationale: The grantor (or settlor) establishes the trust and transfers assets into
it.
7. A trustee’s primary duty is to:
A. Minimize taxes
B. Follow beneficiary instructions
, C. Act in the best interests of beneficiaries
D. Maximize personal compensation
Answer: C
Rationale: Trustees have a fiduciary duty to act prudently and loyally for
beneficiaries.
8. Which trust is commonly used for incapacity planning?
A. Testamentary trust
B. Charitable remainder trust
C. Revocable living trust
D. Irrevocable life insurance trust
Answer: C
Rationale: Revocable living trusts allow asset management during incapacity
without court intervention.
9. A durable power of attorney is effective:
A. Only after death
B. Only upon incapacity
C. During the principal’s lifetime
D. After probate
Answer: C
Rationale: A durable power of attorney authorizes actions while the principal is
alive.
10.Which document addresses medical decisions?
A. Will
B. Healthcare proxy
C. Trust agreement
D. Codicil
Answer: B
Rationale: A healthcare proxy (or medical power of attorney) appoints someone
to make healthcare decisions.
Question And Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A
Instant Download Pdf
1. The primary goal of estate planning is to:
A. Avoid all taxes
B. Transfer wealth according to the client’s wishes
C. Eliminate probate entirely
D. Increase investment returns
Answer: B
Rationale: Estate planning focuses on ensuring assets are distributed according
to the client’s intentions while balancing tax, legal, and family considerations.
2. Which document directs the distribution of assets at death?
A. Living trust
B. Durable power of attorney
C. Will
D. Healthcare proxy
Answer: C
Rationale: A will legally specifies how assets are distributed after death and
names executors and guardians.
3. Probate is best described as:
A. A tax audit
B. Court-supervised estate administration
C. Trust funding process
D. Asset valuation method
,Answer: B
Rationale: Probate is the legal process through which a deceased person’s estate
is administered under court supervision.
4. Which asset typically avoids probate?
A. Individually owned real estate
B. Assets titled in a revocable trust
C. Personal property
D. Business inventory
Answer: B
Rationale: Assets held in a properly funded trust pass outside probate.
5. A revocable living trust becomes irrevocable:
A. When signed
B. At funding
C. At death of the grantor
D. After court approval
Answer: C
Rationale: Revocable trusts generally become irrevocable upon the grantor’s
death.
6. Who creates a trust?
A. Trustee
B. Beneficiary
C. Grantor
D. Executor
Answer: C
Rationale: The grantor (or settlor) establishes the trust and transfers assets into
it.
7. A trustee’s primary duty is to:
A. Minimize taxes
B. Follow beneficiary instructions
, C. Act in the best interests of beneficiaries
D. Maximize personal compensation
Answer: C
Rationale: Trustees have a fiduciary duty to act prudently and loyally for
beneficiaries.
8. Which trust is commonly used for incapacity planning?
A. Testamentary trust
B. Charitable remainder trust
C. Revocable living trust
D. Irrevocable life insurance trust
Answer: C
Rationale: Revocable living trusts allow asset management during incapacity
without court intervention.
9. A durable power of attorney is effective:
A. Only after death
B. Only upon incapacity
C. During the principal’s lifetime
D. After probate
Answer: C
Rationale: A durable power of attorney authorizes actions while the principal is
alive.
10.Which document addresses medical decisions?
A. Will
B. Healthcare proxy
C. Trust agreement
D. Codicil
Answer: B
Rationale: A healthcare proxy (or medical power of attorney) appoints someone
to make healthcare decisions.
