Estate Planning Exam 1 questions
with correct answers
Which of the following is included in the definition of estate planning?
1. Asset management.
2. Accumulation of wealth.
3. Asset preservation.
a. 1 only.
b. 1 and 2.
c. 2 and 3.
d. 1, 2, and 3. - correct answer ✔✔ d. 1, 2, and 3.
2. Which of the following does not need estate planning?
a. Charles, age 30, married with two minor children, and a net worth of $375,000.
b. Sheila, age 35, never been married, one severely disabled son.
c. Cynthia, age 45, single, has a net worth of $450,000 and two dogs. d. All of the above need
estate planning. - correct answer ✔✔ d. All of the above need estate planning.
Who on the estate planning team usually calculates the adjusted basis of assets and addresses
tax issues?
a. Licensed attorney.
b. Certified Public Accountant (CPA).
c. Financial planner.
d. Trust officer. - correct answer ✔✔ b. Certified Public Accountant (CPA).
, Joe is a financial planner in the state of Iowa. Although he attended one year of law school, Joe
is not a licensed attorney. Which of the following actions would be considered the practice of
law?
a. Drafting wills, trust documents, and powers of attorney.
b. Reviewing wills, trust documents, and powers of attorney.
c. Directing a client to seek legal advice from a licensed attorney.
d. Acting as trustee for a client's trust. - correct answer ✔✔ a. Drafting wills, trust documents,
and powers of attorney.
Jimmy would like to meet with you regarding his estate plan. Jimmy is 55-years-old, and
currently has an estate that would be subject to estate tax. His wife died of lung cancer last year.
Jimmy has three children, ages 23, 26, and 32, and one grandchild, age 4. He does not have any
dependents. Which of the following options would be the least likely reason for Jimmy to have
an estate plan?
a. Minimize estate and transfer taxes.
b. Minimize costs.
c. Plan for his children.
d. Plan for his incapacity. - correct answer ✔✔ c. Plan for his children.
Donald drafted his own will utilizing the "Will-Maker" software that he purchased at the local
office supply store and sends it to you for a review. In your first review of the will, you look for
which of the following most common provisions?
a. A left-over clause.
b. A statement of the domicile of the testator.
c. A primary clause.
d. A codicil. - correct answer ✔✔ b. A statement of the domicile of the testator.
Which of the following documents appoints a surrogate decision-maker for health care?
a. Durable power of attorney for health care.
with correct answers
Which of the following is included in the definition of estate planning?
1. Asset management.
2. Accumulation of wealth.
3. Asset preservation.
a. 1 only.
b. 1 and 2.
c. 2 and 3.
d. 1, 2, and 3. - correct answer ✔✔ d. 1, 2, and 3.
2. Which of the following does not need estate planning?
a. Charles, age 30, married with two minor children, and a net worth of $375,000.
b. Sheila, age 35, never been married, one severely disabled son.
c. Cynthia, age 45, single, has a net worth of $450,000 and two dogs. d. All of the above need
estate planning. - correct answer ✔✔ d. All of the above need estate planning.
Who on the estate planning team usually calculates the adjusted basis of assets and addresses
tax issues?
a. Licensed attorney.
b. Certified Public Accountant (CPA).
c. Financial planner.
d. Trust officer. - correct answer ✔✔ b. Certified Public Accountant (CPA).
, Joe is a financial planner in the state of Iowa. Although he attended one year of law school, Joe
is not a licensed attorney. Which of the following actions would be considered the practice of
law?
a. Drafting wills, trust documents, and powers of attorney.
b. Reviewing wills, trust documents, and powers of attorney.
c. Directing a client to seek legal advice from a licensed attorney.
d. Acting as trustee for a client's trust. - correct answer ✔✔ a. Drafting wills, trust documents,
and powers of attorney.
Jimmy would like to meet with you regarding his estate plan. Jimmy is 55-years-old, and
currently has an estate that would be subject to estate tax. His wife died of lung cancer last year.
Jimmy has three children, ages 23, 26, and 32, and one grandchild, age 4. He does not have any
dependents. Which of the following options would be the least likely reason for Jimmy to have
an estate plan?
a. Minimize estate and transfer taxes.
b. Minimize costs.
c. Plan for his children.
d. Plan for his incapacity. - correct answer ✔✔ c. Plan for his children.
Donald drafted his own will utilizing the "Will-Maker" software that he purchased at the local
office supply store and sends it to you for a review. In your first review of the will, you look for
which of the following most common provisions?
a. A left-over clause.
b. A statement of the domicile of the testator.
c. A primary clause.
d. A codicil. - correct answer ✔✔ b. A statement of the domicile of the testator.
Which of the following documents appoints a surrogate decision-maker for health care?
a. Durable power of attorney for health care.
