FIN 332, Exam 3 questions well
answered to pass
Objective of estate planning - correct answer ✔✔Make sure the maximum value reaches the intended
beneficiaries
Estate - correct answer ✔✔Everything soley or jointly owned by a living person
Gross Estate - correct answer ✔✔All property subject to federal estate tax upon death
Probate Estate - correct answer ✔✔All items in gross estate which are transformed by the court. NOT
including jointly owned with rights of survivorship
Duties of executor - correct answer ✔✔Carries out wishes of the will, sell, assets, supervises orderly
distribution of assets to heir
Probate Advantages and Disadvantages - correct answer ✔✔ADV: protect creditors before assets lease
estate, clean title to heirs, all interested parties have notice
DIS: costly and complex, legal court costs, loss of privacy
4 ways to transfer estate - correct answer ✔✔Will, Joint Ownership, Trust, Lifetime Gifts
Documents included in an estate plan - correct answer ✔✔Will, Power of Attorney, Living will and
Advance Medical Directives, A side instruction Letter (funeral arrangments)
Intestate - correct answer ✔✔dying without a will
Kinds of wills - correct answer ✔✔Holographic: hand written will, Oral: dying decleration in front of
witnesses, Statutory: drawn up by lawyers with witnesses
, ** Vesting - correct answer ✔✔gives the participants the right to benefits that are accruing to them after
a specific period of time passes
***Defined Benefit plans - correct answer ✔✔Formula for the benefits to the employees are stated up
front. benefits are paid regardless of the plan's performance
***Defined Contribution Plan - correct answer ✔✔Specifies the amount of contribution the employer
and or employee will make on behalf of the employee
Living Will - correct answer ✔✔Outlines the medical situations and circumstances where the maker no
longer wants life-sustaining treatment
Common clauses in a will - correct answer ✔✔1. "last will and testiment'
2. Revoke any past wills
3. Selecting executor
4. Directing executor on paying debts
5. Disposition of property
6. Residuary clause
7. Appointment and power clause
Possible Problems for estate - correct answer ✔✔1. Ancillary Probate
2. A will including funeral instructions (delay)
3. Attempting to disinherit spouse or child. Custom looks down on this and is ineffective
Ancillary Probate - correct answer ✔✔Decendent owns property outside state that may increase cost
and cause delays
Other Clauses - correct answer ✔✔1. Simultaneous Death: if both spouses die at the same time
2. Survivorship: beneficiary must live a required aount of time to take ownership
answered to pass
Objective of estate planning - correct answer ✔✔Make sure the maximum value reaches the intended
beneficiaries
Estate - correct answer ✔✔Everything soley or jointly owned by a living person
Gross Estate - correct answer ✔✔All property subject to federal estate tax upon death
Probate Estate - correct answer ✔✔All items in gross estate which are transformed by the court. NOT
including jointly owned with rights of survivorship
Duties of executor - correct answer ✔✔Carries out wishes of the will, sell, assets, supervises orderly
distribution of assets to heir
Probate Advantages and Disadvantages - correct answer ✔✔ADV: protect creditors before assets lease
estate, clean title to heirs, all interested parties have notice
DIS: costly and complex, legal court costs, loss of privacy
4 ways to transfer estate - correct answer ✔✔Will, Joint Ownership, Trust, Lifetime Gifts
Documents included in an estate plan - correct answer ✔✔Will, Power of Attorney, Living will and
Advance Medical Directives, A side instruction Letter (funeral arrangments)
Intestate - correct answer ✔✔dying without a will
Kinds of wills - correct answer ✔✔Holographic: hand written will, Oral: dying decleration in front of
witnesses, Statutory: drawn up by lawyers with witnesses
, ** Vesting - correct answer ✔✔gives the participants the right to benefits that are accruing to them after
a specific period of time passes
***Defined Benefit plans - correct answer ✔✔Formula for the benefits to the employees are stated up
front. benefits are paid regardless of the plan's performance
***Defined Contribution Plan - correct answer ✔✔Specifies the amount of contribution the employer
and or employee will make on behalf of the employee
Living Will - correct answer ✔✔Outlines the medical situations and circumstances where the maker no
longer wants life-sustaining treatment
Common clauses in a will - correct answer ✔✔1. "last will and testiment'
2. Revoke any past wills
3. Selecting executor
4. Directing executor on paying debts
5. Disposition of property
6. Residuary clause
7. Appointment and power clause
Possible Problems for estate - correct answer ✔✔1. Ancillary Probate
2. A will including funeral instructions (delay)
3. Attempting to disinherit spouse or child. Custom looks down on this and is ineffective
Ancillary Probate - correct answer ✔✔Decendent owns property outside state that may increase cost
and cause delays
Other Clauses - correct answer ✔✔1. Simultaneous Death: if both spouses die at the same time
2. Survivorship: beneficiary must live a required aount of time to take ownership
