Estate Planning (questions with correct
answers) A+ rated
Effective Transfers
Decedent's assets are transferred based on his wishes.
Efficient Transfers
Transfer costs are minimized. Transfer costs include taxes, court costs and attorney fees.
The Six Basic Steps in the Estate Planning Process
Step 1
Establishing Client/Planner Relationship
- Talk to your existing clients.
- Detail your services.
- Send an Engagement Letter.
The Six Basic Steps in the Estate Planning Process
Step 2
Collecting Client Information
- Current financial statements
- Family information
- List of assets and liabilities
- Copies of policies (i.e., medical, disability, & life)
- Annuity contracts
- Wills and trusts
- Identification of powers of attorney and general powers of appointment
- Previously filed returns (i.e., income & gift tax)
- Assets transferred to loved ones
- Other pertinent information
The Six Basic Steps in the Estate Planning Process
Step 3
,Common Transfer Objectives:
- Transfer property to desired beneficiaries
- Minimize taxes, maximize assets to heirs
- Avoid probate process
- Use lifetime transfers - gifts
- Meet liquidity needs at death
- Plan for children
- Plan for incapacity of transferor
- Provide for needs of surviving spouse
- Fulfill charitable intentions of transferor
The Six Basic Steps in the Estate Planning Process
Step 4
Develop a Comprehensive Plan
- A comprehensive plan includes a written document outlining what deliverables are necessary
as part of the plan. Deliverables include wills, trust documents, amount of life insurance,
identifying property titling and beneficiary designation changes.
The Six Basic Steps in the Estate Planning Process
Step 5
Implement the Plan
- Implementing the estate plan requires having an attorney write the wills and trust documents.
Paying the premium to purchase life insurance, changing beneficiary designations.
The Six Basic Steps in the Estate Planning Process
Step 6
Review and Update Plan When Necessary
- After the plan has been implemented, the planner should meet with the client at least
annually or more frequently if there is a major life change to revisit the estate plan. Major life
events include new children, marriage, divorce, death in the family, purchasing or starting a new
business and selling a business.
Basic Documents in an Estate Plan
- Wills
- Side Letters of Instruction
,- Powers of Attorney for Property
- Durable Powers of Attorney for Healthcare
- Living Wills or Advance Medical Directives
- Do Not Resuscitate Orders (DNRs)
Disclaimer Rules
Rules to make an Effective Disclaimer
- The disclaimer must be in writing.
- The disclaimer must be delivered to executor within 9 months.
- The disclaiming party cannot have benefited from the disclaimed assets (interest income).
- The person disclaiming can't direct the disposition of the disclaimed property. (It's as if the
disclaiming party is deceased.)
- A disclaimer clause is when an heir or legatee refuses to accept a gift or bequest. The
disclaimer allows assets to pass to other heirs or legatees without additional transfer tax.
You are opening a new financial planning practice and you would like to put together a team of
experts to help your clients. Which of the following groups represents the best team to help
your clients?
Financial planner, CPA, and attorney
The best team for your client would include a financial planner, CPA, and attorney. A licensed
insurance specialist is also a good asset to an estate planning team, but the team described in
option b is not as good of a team overall as the team in option a.
You are a financial planner and you are preparing for a meeting with your new client, Anne.
What would you be most likely to ask Anne to bring to the meeting with her?
A. Pictures of her children
B. Her parents
C. Any previous wills
D. Sales records for her ex-husband's business
The correct answer is C.
You would be most likely to ask Anne to bring any previous wills with her. In addition, you would
be likely to request copies of any other estate planning documents as well as tax documents.
, Which of the following is not a transfer cost associated with estate planning?
- Document preparation
- Attorney's fees
- CPA's fees
- Insurance premiums
The correct answer is D.
Insurance premiums are not a transfer cost associated with estate planning. All of the other
answers are costs associated with estate planning.
Which of the following is not a common estate planning goal?
- Maximizing transfer costs.
- Minimizing transfer taxes.
- Providing for liquidity at death.
- Fulfilling client's healthcare decisions.
The correct answer is A.
The solution was looking for the false statement. Minimizing transfer costs, not maximizing
transfer costs, is a common estate planning goal.
B is a true statement - Minimizing transfer taxes is common estate planning goals to maximize
what the heirs receive.
C is a true statement - Estate planning factors in providing for liquidity at death to have funds
available to pay administrative fees and/or estate taxes.
D is a true statement - Proper estate planning allows the client's healthcare decisions to be
known, allowing the burden to be lifted from the family in a difficult time.
We have an expert-written solution to this problem!
answers) A+ rated
Effective Transfers
Decedent's assets are transferred based on his wishes.
Efficient Transfers
Transfer costs are minimized. Transfer costs include taxes, court costs and attorney fees.
The Six Basic Steps in the Estate Planning Process
Step 1
Establishing Client/Planner Relationship
- Talk to your existing clients.
- Detail your services.
- Send an Engagement Letter.
The Six Basic Steps in the Estate Planning Process
Step 2
Collecting Client Information
- Current financial statements
- Family information
- List of assets and liabilities
- Copies of policies (i.e., medical, disability, & life)
- Annuity contracts
- Wills and trusts
- Identification of powers of attorney and general powers of appointment
- Previously filed returns (i.e., income & gift tax)
- Assets transferred to loved ones
- Other pertinent information
The Six Basic Steps in the Estate Planning Process
Step 3
,Common Transfer Objectives:
- Transfer property to desired beneficiaries
- Minimize taxes, maximize assets to heirs
- Avoid probate process
- Use lifetime transfers - gifts
- Meet liquidity needs at death
- Plan for children
- Plan for incapacity of transferor
- Provide for needs of surviving spouse
- Fulfill charitable intentions of transferor
The Six Basic Steps in the Estate Planning Process
Step 4
Develop a Comprehensive Plan
- A comprehensive plan includes a written document outlining what deliverables are necessary
as part of the plan. Deliverables include wills, trust documents, amount of life insurance,
identifying property titling and beneficiary designation changes.
The Six Basic Steps in the Estate Planning Process
Step 5
Implement the Plan
- Implementing the estate plan requires having an attorney write the wills and trust documents.
Paying the premium to purchase life insurance, changing beneficiary designations.
The Six Basic Steps in the Estate Planning Process
Step 6
Review and Update Plan When Necessary
- After the plan has been implemented, the planner should meet with the client at least
annually or more frequently if there is a major life change to revisit the estate plan. Major life
events include new children, marriage, divorce, death in the family, purchasing or starting a new
business and selling a business.
Basic Documents in an Estate Plan
- Wills
- Side Letters of Instruction
,- Powers of Attorney for Property
- Durable Powers of Attorney for Healthcare
- Living Wills or Advance Medical Directives
- Do Not Resuscitate Orders (DNRs)
Disclaimer Rules
Rules to make an Effective Disclaimer
- The disclaimer must be in writing.
- The disclaimer must be delivered to executor within 9 months.
- The disclaiming party cannot have benefited from the disclaimed assets (interest income).
- The person disclaiming can't direct the disposition of the disclaimed property. (It's as if the
disclaiming party is deceased.)
- A disclaimer clause is when an heir or legatee refuses to accept a gift or bequest. The
disclaimer allows assets to pass to other heirs or legatees without additional transfer tax.
You are opening a new financial planning practice and you would like to put together a team of
experts to help your clients. Which of the following groups represents the best team to help
your clients?
Financial planner, CPA, and attorney
The best team for your client would include a financial planner, CPA, and attorney. A licensed
insurance specialist is also a good asset to an estate planning team, but the team described in
option b is not as good of a team overall as the team in option a.
You are a financial planner and you are preparing for a meeting with your new client, Anne.
What would you be most likely to ask Anne to bring to the meeting with her?
A. Pictures of her children
B. Her parents
C. Any previous wills
D. Sales records for her ex-husband's business
The correct answer is C.
You would be most likely to ask Anne to bring any previous wills with her. In addition, you would
be likely to request copies of any other estate planning documents as well as tax documents.
, Which of the following is not a transfer cost associated with estate planning?
- Document preparation
- Attorney's fees
- CPA's fees
- Insurance premiums
The correct answer is D.
Insurance premiums are not a transfer cost associated with estate planning. All of the other
answers are costs associated with estate planning.
Which of the following is not a common estate planning goal?
- Maximizing transfer costs.
- Minimizing transfer taxes.
- Providing for liquidity at death.
- Fulfilling client's healthcare decisions.
The correct answer is A.
The solution was looking for the false statement. Minimizing transfer costs, not maximizing
transfer costs, is a common estate planning goal.
B is a true statement - Minimizing transfer taxes is common estate planning goals to maximize
what the heirs receive.
C is a true statement - Estate planning factors in providing for liquidity at death to have funds
available to pay administrative fees and/or estate taxes.
D is a true statement - Proper estate planning allows the client's healthcare decisions to be
known, allowing the burden to be lifted from the family in a difficult time.
We have an expert-written solution to this problem!
