HS 330 - Estate Planning questions
with complete solutions
Which of the following is not an estate-planning goal?
A)
Maximizing the gross estate
B)
Minimizing transfer taxes
C)
Providing for liquidity at death
D)
Fulfilling client's healthcare decisions - correct answer ✔✔ A
Although he has a vast fortune, Tricky has decided not to prepare an estate plan because he
believes that his surviving family members will divide his assets appropriately. Which of the
following is not a risk associated with failing to plan an estate?
A)
Tricky's estate could incur excessive transfer taxes.
B)
Tricky's favorite car may not be transferred to his ex-wife, Carla.
C)
Tricky's insurance policy on his own life may not be paid out to the named beneficiary.
D)
Tricky's current wife, Dixie, may not provide for his children from a previous marriage. - correct
answer ✔✔ C
,Which of the following advisors is (are) qualified to give estate-planning advice?
I. AttorneysII. CPAsIII. Financial planners
A)
I only
B)
I and II
C)
II and III
D)
I, II and III - correct answer ✔✔ D
All of the following are transfer costs associated with estate planning EXCEPT
A)
attorney fees for documents.
B)
costs of retitling real estate.
C)
estate and inheritance taxes.
D)
property taxes on inherited property. - correct answer ✔✔ D
As a non-attorney CFP®, you are asked to assist one of your clients who is very frugal to prepare
her will using LegalZoom.com. Which of the following statements is correct?
A)
It is permissible as long as you get a waiver from your client.
B)
,It is permissible as long as you are not an heir, legatee or beneficiary.
C)
Advise her that LegalZoom is not very reputable and direct her to a better website.
D)
You cannot assist her. - correct answer ✔✔ D
Dale and Tomi have been in a long-term, non-married, non-traditional relationship. Dale wants
to make sure that if he dies first, Tomi will be provided for. Which of the following would you
recommend to fulfill Dale's goal of transferring assets to Tomi at Dale's death?
A)
Name Tomi as the beneficiary of Dale's retirement plan.
B)
Transfer the ownership of Dale's real estate investments into a tenancy by the entirety
arrangement.
C)
Advise Dale against writing a will that specifically bequeaths assets to Tomi.
D)
Recommend that Dale and Tomi move to a community property state. - correct answer ✔✔ A
Which of the following assets will pass through probate?
A)
A life insurance policy with a named beneficiary
B)
Assets held in an inter-vivos trust
C)
A pay-on-death account with a named beneficiary
D)
, Household goods left to family members via a side letter - correct answer ✔✔ D
Cara owns the following property:
A personal residence titled as sole ownership fee simple valued at $400,000.
A $500,000 life insurance policy on her own life. The named beneficiary is Cara's brother James,
who died 6 months ago leaving two children, Michael and Carol. There is no contingent
beneficiary listed.
A car valued at $20,000 titled JTWROS with Cara's mother.
An IRA valued at $200,000 with Cara's mother as the named beneficiary.
What is the current value of Cara's probate estate?
A)
$400,000
B)
$900,000
C)
$920,000
D)
$1,320,000 - correct answer ✔✔ B
Which of the following statements is incorrect regarding probate property?
A)
An LLC passed to a key employee when the business owner retires will be considered probate
property when the business owner dies.
B)
Assets through a testamentary trust are probate property.
C)
Property held as tenants in common is probate property.
with complete solutions
Which of the following is not an estate-planning goal?
A)
Maximizing the gross estate
B)
Minimizing transfer taxes
C)
Providing for liquidity at death
D)
Fulfilling client's healthcare decisions - correct answer ✔✔ A
Although he has a vast fortune, Tricky has decided not to prepare an estate plan because he
believes that his surviving family members will divide his assets appropriately. Which of the
following is not a risk associated with failing to plan an estate?
A)
Tricky's estate could incur excessive transfer taxes.
B)
Tricky's favorite car may not be transferred to his ex-wife, Carla.
C)
Tricky's insurance policy on his own life may not be paid out to the named beneficiary.
D)
Tricky's current wife, Dixie, may not provide for his children from a previous marriage. - correct
answer ✔✔ C
,Which of the following advisors is (are) qualified to give estate-planning advice?
I. AttorneysII. CPAsIII. Financial planners
A)
I only
B)
I and II
C)
II and III
D)
I, II and III - correct answer ✔✔ D
All of the following are transfer costs associated with estate planning EXCEPT
A)
attorney fees for documents.
B)
costs of retitling real estate.
C)
estate and inheritance taxes.
D)
property taxes on inherited property. - correct answer ✔✔ D
As a non-attorney CFP®, you are asked to assist one of your clients who is very frugal to prepare
her will using LegalZoom.com. Which of the following statements is correct?
A)
It is permissible as long as you get a waiver from your client.
B)
,It is permissible as long as you are not an heir, legatee or beneficiary.
C)
Advise her that LegalZoom is not very reputable and direct her to a better website.
D)
You cannot assist her. - correct answer ✔✔ D
Dale and Tomi have been in a long-term, non-married, non-traditional relationship. Dale wants
to make sure that if he dies first, Tomi will be provided for. Which of the following would you
recommend to fulfill Dale's goal of transferring assets to Tomi at Dale's death?
A)
Name Tomi as the beneficiary of Dale's retirement plan.
B)
Transfer the ownership of Dale's real estate investments into a tenancy by the entirety
arrangement.
C)
Advise Dale against writing a will that specifically bequeaths assets to Tomi.
D)
Recommend that Dale and Tomi move to a community property state. - correct answer ✔✔ A
Which of the following assets will pass through probate?
A)
A life insurance policy with a named beneficiary
B)
Assets held in an inter-vivos trust
C)
A pay-on-death account with a named beneficiary
D)
, Household goods left to family members via a side letter - correct answer ✔✔ D
Cara owns the following property:
A personal residence titled as sole ownership fee simple valued at $400,000.
A $500,000 life insurance policy on her own life. The named beneficiary is Cara's brother James,
who died 6 months ago leaving two children, Michael and Carol. There is no contingent
beneficiary listed.
A car valued at $20,000 titled JTWROS with Cara's mother.
An IRA valued at $200,000 with Cara's mother as the named beneficiary.
What is the current value of Cara's probate estate?
A)
$400,000
B)
$900,000
C)
$920,000
D)
$1,320,000 - correct answer ✔✔ B
Which of the following statements is incorrect regarding probate property?
A)
An LLC passed to a key employee when the business owner retires will be considered probate
property when the business owner dies.
B)
Assets through a testamentary trust are probate property.
C)
Property held as tenants in common is probate property.
