Certified Estate Planner (CEP) 2026: NICEP
Exam, Study Materials & Online Course Options
## **1. What is the primary purpose of a revocable living trust?**
A. Reduce income taxes
B. Avoid probate and provide asset management
C. Guarantee creditor protection
D. Make gifts tax-free
**Correct Answer:** B
**Rationale:** A revocable living trust allows the grantor to manage and
distribute assets during life and after death, avoiding probate. It does
**not** provide creditor protection or reduce taxes automatically.
---
## **2. Which of the following is considered a testamentary
document?**
,A. Durable power of attorney
B. Will
C. Revocable living trust
D. HIPAA authorization
**Correct Answer:** B
**Rationale:** A will becomes effective **upon death** and is a
testamentary document. Trusts and powers of attorney are generally
**inter vivos** (effective during life).
---
## **3. In estate planning, which asset typically receives a **step-up in
basis** at
death?**
A. Retirement account distributions
B. Real estate held in the decedent’s name
C. Life insurance proceeds
D. Gifted property during life
**Correct Answer:** B
,**Rationale:** Assets included in the decedent’s estate, such as real
estate owned outright, receive a **step-up in cost basis**, reducing
capital gains taxes if sold.
---
## **4. Which of the following is a key benefit of gifting during life?**
A. Avoiding
probate
B. Utilizing the annual gift tax
exclusion
C. Avoiding income tax on
wages
D. Eliminating estate tax
completely
**Correct Answer:** B
**Rationale:** Annual gifts up to the IRS limit can reduce the estate and
use the **annual gift tax exclusion**, which is currently $17,000 per
recipient (2023).
---
## **5. What is the primary goal of asset protection planning?**
, A. Maximize income
B. Shield assets from creditors while remaining legal
C. Avoid all taxes
D. Create trusts for minor children
**Correct Answer:** B
**Rationale:** Asset protection involves structuring assets **legally**
to reduce exposure to creditors or lawsuits without violating law.
---
## **6. Which retirement account allows tax-deferred growth and is
funded with
pre-tax
contributions?**
A. Roth IRA
B. Traditional IRA
C. 529 College Savings Plan
D. HSA
**Correct Answer:** B
Exam, Study Materials & Online Course Options
## **1. What is the primary purpose of a revocable living trust?**
A. Reduce income taxes
B. Avoid probate and provide asset management
C. Guarantee creditor protection
D. Make gifts tax-free
**Correct Answer:** B
**Rationale:** A revocable living trust allows the grantor to manage and
distribute assets during life and after death, avoiding probate. It does
**not** provide creditor protection or reduce taxes automatically.
---
## **2. Which of the following is considered a testamentary
document?**
,A. Durable power of attorney
B. Will
C. Revocable living trust
D. HIPAA authorization
**Correct Answer:** B
**Rationale:** A will becomes effective **upon death** and is a
testamentary document. Trusts and powers of attorney are generally
**inter vivos** (effective during life).
---
## **3. In estate planning, which asset typically receives a **step-up in
basis** at
death?**
A. Retirement account distributions
B. Real estate held in the decedent’s name
C. Life insurance proceeds
D. Gifted property during life
**Correct Answer:** B
,**Rationale:** Assets included in the decedent’s estate, such as real
estate owned outright, receive a **step-up in cost basis**, reducing
capital gains taxes if sold.
---
## **4. Which of the following is a key benefit of gifting during life?**
A. Avoiding
probate
B. Utilizing the annual gift tax
exclusion
C. Avoiding income tax on
wages
D. Eliminating estate tax
completely
**Correct Answer:** B
**Rationale:** Annual gifts up to the IRS limit can reduce the estate and
use the **annual gift tax exclusion**, which is currently $17,000 per
recipient (2023).
---
## **5. What is the primary goal of asset protection planning?**
, A. Maximize income
B. Shield assets from creditors while remaining legal
C. Avoid all taxes
D. Create trusts for minor children
**Correct Answer:** B
**Rationale:** Asset protection involves structuring assets **legally**
to reduce exposure to creditors or lawsuits without violating law.
---
## **6. Which retirement account allows tax-deferred growth and is
funded with
pre-tax
contributions?**
A. Roth IRA
B. Traditional IRA
C. 529 College Savings Plan
D. HSA
**Correct Answer:** B
