CERTIFIED ESTATE PLANNER (CEP)
EXAM With Actual Questions &
Verified Answers ,Plus Explained
Rationales/Expert Verified For
Guaranteed Pass 2026/Latest
Update/Instant Download Pdf
1. Which document principally directs how a decedent’s tangible
personal property and real property are distributed after
death?
A. Durable power of attorney
B. Living will
C. Revocable living trust
D. Will
D. Will
A will is the primary instrument used to direct distribution of
property at death, name an executor, and handle bequests;
trusts can avoid probate but a will remains the default
testamentary document.
2. Which trust allows a grantor to retain the power to revoke and
amend during lifetime and typically avoids probate for assets
retitled into it?
A. Irrevocable life insurance trust (ILIT)
B. Revocable living trust
C. Charitable remainder trust (CRT)
D. Qualified personal residence trust (QPRT)
, B. Revocable living trust
A revocable living trust is amendable and revocable by the
grantor during life and can hold assets to avoid probate; it
does not, however, provide estate tax removal like some
irrevocable trusts.
3. The fiduciary duty requiring a trustee to put the beneficiaries’
interests before the trustee’s own is called:
A. Duty of loyalty
B. Duty to account
C. Duty to diversify
D. Duty of impartiality
A. Duty of loyalty
The duty of loyalty prevents trustees from self-dealing and
requires acting solely in beneficiaries’ best interests.
4. Which transfer is generally subject to federal gift tax rules
(absent an exclusion or exclusion amount)?
A. Transfer in exchange for full market value
B. Transfer by sale between unrelated parties at fair market
value
C. A completed, gratuitous transfer of property during life
D. A bequest at death
C. A completed, gratuitous transfer of property during life
Completed gratuitous transfers during life are gifts and may
be subject to gift tax unless covered by exclusions (e.g., annual
exclusion) or the lifetime exemption.
5. The annual exclusion for gifts (per donee) allows a donor to:
A. Transfer unlimited amounts tax-free to any donee
B. Exclude a specified dollar amount per donee per year from
gift tax reporting
, C. Exclude gifts only to spouses
D. Avoid estate tax on all gifts made within three years of death
B. Exclude a specified dollar amount per donee per year from
gift tax reporting
Each calendar year a donor can give each donee an exclusion
amount (annual exclusion) that is not subject to gift tax and
generally not taxable to the donee.
6. Which trust is designed to hold life insurance outside of a
taxable estate?
A. Qualified terminable interest property (QTIP) trust
B. Irrevocable life insurance trust (ILIT)
C. Grantor retained annuity trust (GRAT)
D. Special needs trust
B. Irrevocable life insurance trust (ILIT)
An ILIT owns life insurance and, if properly structured and
funded, keeps policy proceeds out of the insured’s estate for
estate tax purposes.
7. A power of attorney that remains effective if the principal
becomes incapacitated is called:
A. Springing power of attorney
B. General power of attorney
C. Durable power of attorney
D. Limited power of attorney
C. Durable power of attorney
A durable POA contains language (durability clause)
continuing authority after incapacity; a springing POA
becomes effective upon a specified event (often incapacity).
8. Which document is designed to express a person’s wishes
about medical treatment when they cannot communicate?
, A. Living trust
B. Will
C. Health care proxy or advanced directive
D. Power of appointment
C. Health care proxy or advanced directive
An advance directive (e.g., health care proxy, living will)
specifies medical treatment preferences and appoints an
agent for health decisions.
9. Which of the following best describes testamentary capacity?
A. The ability to sign any legal document
B. A minimum age requirement and sound mind to make a will
at time of execution
C. Ownership of substantial property
D. Being a beneficiary of a will
B. A minimum age requirement and sound mind to make a will
at time of execution
Testamentary capacity requires the testator to understand the
nature of making a will, the extent of their property, and the
natural objects of their bounty at execution.
10. Intestate succession refers to:
A. Distributing assets according to a trust document
B. Distribution under a will
C. Distribution according to state law when someone dies
without a valid will
D. A federal default distribution scheme
C. Distribution according to state law when someone dies
without a valid will
Intestate succession means assets pass under state statutes
(intestacy laws) when there is no valid will.
EXAM With Actual Questions &
Verified Answers ,Plus Explained
Rationales/Expert Verified For
Guaranteed Pass 2026/Latest
Update/Instant Download Pdf
1. Which document principally directs how a decedent’s tangible
personal property and real property are distributed after
death?
A. Durable power of attorney
B. Living will
C. Revocable living trust
D. Will
D. Will
A will is the primary instrument used to direct distribution of
property at death, name an executor, and handle bequests;
trusts can avoid probate but a will remains the default
testamentary document.
2. Which trust allows a grantor to retain the power to revoke and
amend during lifetime and typically avoids probate for assets
retitled into it?
A. Irrevocable life insurance trust (ILIT)
B. Revocable living trust
C. Charitable remainder trust (CRT)
D. Qualified personal residence trust (QPRT)
, B. Revocable living trust
A revocable living trust is amendable and revocable by the
grantor during life and can hold assets to avoid probate; it
does not, however, provide estate tax removal like some
irrevocable trusts.
3. The fiduciary duty requiring a trustee to put the beneficiaries’
interests before the trustee’s own is called:
A. Duty of loyalty
B. Duty to account
C. Duty to diversify
D. Duty of impartiality
A. Duty of loyalty
The duty of loyalty prevents trustees from self-dealing and
requires acting solely in beneficiaries’ best interests.
4. Which transfer is generally subject to federal gift tax rules
(absent an exclusion or exclusion amount)?
A. Transfer in exchange for full market value
B. Transfer by sale between unrelated parties at fair market
value
C. A completed, gratuitous transfer of property during life
D. A bequest at death
C. A completed, gratuitous transfer of property during life
Completed gratuitous transfers during life are gifts and may
be subject to gift tax unless covered by exclusions (e.g., annual
exclusion) or the lifetime exemption.
5. The annual exclusion for gifts (per donee) allows a donor to:
A. Transfer unlimited amounts tax-free to any donee
B. Exclude a specified dollar amount per donee per year from
gift tax reporting
, C. Exclude gifts only to spouses
D. Avoid estate tax on all gifts made within three years of death
B. Exclude a specified dollar amount per donee per year from
gift tax reporting
Each calendar year a donor can give each donee an exclusion
amount (annual exclusion) that is not subject to gift tax and
generally not taxable to the donee.
6. Which trust is designed to hold life insurance outside of a
taxable estate?
A. Qualified terminable interest property (QTIP) trust
B. Irrevocable life insurance trust (ILIT)
C. Grantor retained annuity trust (GRAT)
D. Special needs trust
B. Irrevocable life insurance trust (ILIT)
An ILIT owns life insurance and, if properly structured and
funded, keeps policy proceeds out of the insured’s estate for
estate tax purposes.
7. A power of attorney that remains effective if the principal
becomes incapacitated is called:
A. Springing power of attorney
B. General power of attorney
C. Durable power of attorney
D. Limited power of attorney
C. Durable power of attorney
A durable POA contains language (durability clause)
continuing authority after incapacity; a springing POA
becomes effective upon a specified event (often incapacity).
8. Which document is designed to express a person’s wishes
about medical treatment when they cannot communicate?
, A. Living trust
B. Will
C. Health care proxy or advanced directive
D. Power of appointment
C. Health care proxy or advanced directive
An advance directive (e.g., health care proxy, living will)
specifies medical treatment preferences and appoints an
agent for health decisions.
9. Which of the following best describes testamentary capacity?
A. The ability to sign any legal document
B. A minimum age requirement and sound mind to make a will
at time of execution
C. Ownership of substantial property
D. Being a beneficiary of a will
B. A minimum age requirement and sound mind to make a will
at time of execution
Testamentary capacity requires the testator to understand the
nature of making a will, the extent of their property, and the
natural objects of their bounty at execution.
10. Intestate succession refers to:
A. Distributing assets according to a trust document
B. Distribution under a will
C. Distribution according to state law when someone dies
without a valid will
D. A federal default distribution scheme
C. Distribution according to state law when someone dies
without a valid will
Intestate succession means assets pass under state statutes
(intestacy laws) when there is no valid will.
