ALU 202 EXAM |ACTUAL QUESTIONS AND
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
All of the following are financial objectives of a well-planned estate EXCEPT:
1) maximized wealth
2) tax savings
3) income replacement
4) appropriate asset ownership
CORRECT ANSWER
3) income replacement
Question 2
A legal agreement whereby property is held and managed for the welfare of the
beneficiary is:
1) estate
2) trust
3) situs
4) partnership
CORRECT ANSWER
2) trust
1
,Question 3
The basis from which to determine whether an individual is subject to the estate tax is:
1) taxable estate
2) fair market value of the personal property
3) total income
4) business assets only
CORRECT ANSWER
1) taxable estate
Question 4
All of the following statements regarding special use valuation are correct EXCEPT:
1) Some property is taxed based upon potential uses
2) Property value is assessed according to its current use
3) The value of stocks/bonds are the price upon the date of death
4) Life insurance products set aside for the benefit of the decedent's estate are taxed as part
of the estate
CORRECT ANSWER
1) Some property is taxed based upon potential uses
Question 5
Examples of income with respect to the decedent (IRD) include all of the following EXCEPT:
1) uncollected lottery winnings
2) outstanding stock dividends
2
,3) accounts receivables from a cash basis sole proprietor
4) gains received from the sale of the property
CORRECT ANSWER
4) gains received from the sale of the property
Question 6
All of the following are factors to consider in a charitable giving application for life
insurance EXCEPT:
1) past history of charitable contributions
2) amount of annual contributions
3) the state in which the charitable trust was established
4) the annual premium as a percentage of client's annual income
CORRECT ANSWER
3) the state in which the charitable trust was established
Question 7
Foreign assets owned by former US citizens:
1) do not generate estate tax once US citizenship is renounced
2) generate a decreasing proportional estate tax for 10 yrs after US citizenship is renounced
3) are completely exempt from estate taxes if all assets are located outside of the US
4) generate an increasing proportional estate tax for 10 yrs after renouncing US citizenship
CORRECT ANSWER
2) generate a decreasing proportional estate tax for 10 yrs after US citizenship is
renounced
3
, Question 8
All of the following are characteristics of the Irrevocable Trust EXCEPT:
1) trust assets are not vulnerable to the grantor's creditors
2) assets removed from the estate and put into the trust reduce the size of the estate and
the estate tax
3) grantor retains incident of ownership of the trust
4) income generated by the trust assets is taxed to the trust, often at a lower rate than
received by the grantor
CORRECT ANSWER
3) grantor retains incident of ownership of the trust
Question 9
All of the following statements regarding the rule against perpetuities are correct EXCEPT:
1) Certain charitable trusts can exist for an unlimited period of time
2) Private trusts can exist for a period not to exceed 21 yrs after the creation of the trust
3) Public trusts cannot exist for more than 21 yrs after creation
4) Charitable trusts must not name a specific individual or individuals are beneficiary
CORRECT ANSWER
3) Public trusts cannot exist for more than 21 yrs after creation
Question 10
4
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
All of the following are financial objectives of a well-planned estate EXCEPT:
1) maximized wealth
2) tax savings
3) income replacement
4) appropriate asset ownership
CORRECT ANSWER
3) income replacement
Question 2
A legal agreement whereby property is held and managed for the welfare of the
beneficiary is:
1) estate
2) trust
3) situs
4) partnership
CORRECT ANSWER
2) trust
1
,Question 3
The basis from which to determine whether an individual is subject to the estate tax is:
1) taxable estate
2) fair market value of the personal property
3) total income
4) business assets only
CORRECT ANSWER
1) taxable estate
Question 4
All of the following statements regarding special use valuation are correct EXCEPT:
1) Some property is taxed based upon potential uses
2) Property value is assessed according to its current use
3) The value of stocks/bonds are the price upon the date of death
4) Life insurance products set aside for the benefit of the decedent's estate are taxed as part
of the estate
CORRECT ANSWER
1) Some property is taxed based upon potential uses
Question 5
Examples of income with respect to the decedent (IRD) include all of the following EXCEPT:
1) uncollected lottery winnings
2) outstanding stock dividends
2
,3) accounts receivables from a cash basis sole proprietor
4) gains received from the sale of the property
CORRECT ANSWER
4) gains received from the sale of the property
Question 6
All of the following are factors to consider in a charitable giving application for life
insurance EXCEPT:
1) past history of charitable contributions
2) amount of annual contributions
3) the state in which the charitable trust was established
4) the annual premium as a percentage of client's annual income
CORRECT ANSWER
3) the state in which the charitable trust was established
Question 7
Foreign assets owned by former US citizens:
1) do not generate estate tax once US citizenship is renounced
2) generate a decreasing proportional estate tax for 10 yrs after US citizenship is renounced
3) are completely exempt from estate taxes if all assets are located outside of the US
4) generate an increasing proportional estate tax for 10 yrs after renouncing US citizenship
CORRECT ANSWER
2) generate a decreasing proportional estate tax for 10 yrs after US citizenship is
renounced
3
, Question 8
All of the following are characteristics of the Irrevocable Trust EXCEPT:
1) trust assets are not vulnerable to the grantor's creditors
2) assets removed from the estate and put into the trust reduce the size of the estate and
the estate tax
3) grantor retains incident of ownership of the trust
4) income generated by the trust assets is taxed to the trust, often at a lower rate than
received by the grantor
CORRECT ANSWER
3) grantor retains incident of ownership of the trust
Question 9
All of the following statements regarding the rule against perpetuities are correct EXCEPT:
1) Certain charitable trusts can exist for an unlimited period of time
2) Private trusts can exist for a period not to exceed 21 yrs after the creation of the trust
3) Public trusts cannot exist for more than 21 yrs after creation
4) Charitable trusts must not name a specific individual or individuals are beneficiary
CORRECT ANSWER
3) Public trusts cannot exist for more than 21 yrs after creation
Question 10
4
