FIN 538 - Estate Planning Exam 3
questions and answers
Chapter 6 - ANS ✔✔Homework
Which of the following incidents of ownership, held during the three year period before death,
will cause inclusion of life insurance proceeds in the gross estate?
→ The right to change the beneficiary.
→ Any of these incidents of ownership would be enough to bring the proceeds into the gross
estate.
→ The right to cancel the policy.
→ The right to borrow against the policy. - ANS ✔✔Any of these incidents of ownership would
be enough to bring the proceeds into the gross estate.
Several years ago, Bill and his sister, Joy, purchased a tract of real property as joint tenants with
right of survivorship (JTWROS). Bill contributed $75,000 toward the $300,000 purchase price
and Joy contributed the remaining $225,000. Joy died in the current year, and her will provided
that all of her assets pass to her daughter, Cate. The real property was worth $1,000,000 on the
date of Joy's death. The value of Joy's interest in the property includible in her gross estate is:
→ $500,000
→ $625,000
→ $750,000
→ $800,000 - ANS ✔✔$750,000
Bill owns 25%: $75,000/$300,000 = 0.25
questions and answers
Chapter 6 - ANS ✔✔Homework
Which of the following incidents of ownership, held during the three year period before death,
will cause inclusion of life insurance proceeds in the gross estate?
→ The right to change the beneficiary.
→ Any of these incidents of ownership would be enough to bring the proceeds into the gross
estate.
→ The right to cancel the policy.
→ The right to borrow against the policy. - ANS ✔✔Any of these incidents of ownership would
be enough to bring the proceeds into the gross estate.
Several years ago, Bill and his sister, Joy, purchased a tract of real property as joint tenants with
right of survivorship (JTWROS). Bill contributed $75,000 toward the $300,000 purchase price
and Joy contributed the remaining $225,000. Joy died in the current year, and her will provided
that all of her assets pass to her daughter, Cate. The real property was worth $1,000,000 on the
date of Joy's death. The value of Joy's interest in the property includible in her gross estate is:
→ $500,000
→ $625,000
→ $750,000
→ $800,000 - ANS ✔✔$750,000
Bill owns 25%: $75,000/$300,000 = 0.25
