Certified Estate Planning – Practice Exam
(2025/2026 Latest Exam Prep) | Complete
Study Guide & Verified Q&A
Which of the following is not a transfer cost associated with estate planning?
A) Document preparation
B) Attorney's fees
C) CPA's fees
D) Insurance premiums - correct answerD) Insurance premiums
Insurance premiums are not a transfer cost associated with estate planning. All of the
other answers are costs associated with estate planning.
You are opening a new financial planning practice and you would like to put together a
team of experts to help your clients with estate planning. Which of the following groups
represents the best team to help your clients?
A) Financial planner, CPA, and attorney.
B) CPA, psychiatrist, and insurance salesman.
C) Financial planner, attorney, and real estate agent.
D) Attorney, insurance salesman, and IRS agent. - correct answerA) Financial planner,
CPA, and attorney.
The best team for your client would include a financial planner, CPA, and attorney.
A licensed insurance specialist and real estate agent are also good additions to an
estate planning team, but the team described in statement (A) covers all of the required
aspects of an estate planning team: financial planning, tax planning, and legal
representation.
Although he has a vast fortune, Ricky has decided not to prepare an estate plan
because he believes that his surviving family members will divide up his assets
appropriately. Which of the following is not a risk associated with failing to plan an
estate?
A) Ricky's estate could incur excessive transfer taxes.
B) Ricky's favorite Corvette may not be transferred to his ex-wife, Carla.
C) Ricky's insurance policy on his own life may not be paid out to the named
beneficiary.
,D) Ricky's current wife, Lucille, may not provide for Ricky's children from a previous
marriage. - correct answerC) Ricky's insurance policy on his own life may not be paid
out to the named beneficiary.
The proceeds of insurance policies with named beneficiaries pass outside of probate via
state contract law. Ricky's failure to plan his estate will not affect the payment of his
insurance policy.
Tracey is a financial planner who recently received his CFP® designation. Tracey does
not have any other designations or licenses. Although Tracey's expertise is investment
planning, he is anxious to expand his client base and is willing to assist clients with any
area of financial planning. Over the last month, Tracey engaged in the following
activities with Troy, a new client.
I. During the initial meeting, Tracey collected personal data about Troy, including the
estate planning documents Troy had previously executed.
II. During the second meeting, Tracey recommended the use of a trust to fulfill some of
Troy's estate planning goals.
III. Troy called Tracey one afternoon and asked if Tracey could explain the probate
process to him, which Tracey promptly did.
IV. Tracey downloaded a copy of a generic will from the internet, filled in Troy's
information and gave the document to Troy to be executed.
Of the activi - correct answerA) IV only
Only statement four would be considered the unauthorized practice of law.
The drafting of legal documents is reserved for attorneys.
Inquiring about estate planning documents should be completed by all practitioners.
Recommending appropriate estate planning devices, such as trusts, can be done by
financial planners.
Explaining the probate process to a client would not be the unauthorized practice of law;
the line would be crossed if Tracey gave legal advice regarding the probate process.
Which of the following is not a common estate planning goal?
A) Maximizing transfer costs.
B) Minimizing transfer taxes.
C) Providing for liquidity at death.
D) Fulfilling client's healthcare decisions. - correct answerA) Maximizing transfer costs.
,Maximizing transfer costs is not an estate planning goal. Transfer costs should be
minimized to the greatest extent possible, while also fulfilling the client's goals.
All of the other answers are common estate planning goals.
Of the following, who should generally be a member of the estate planning team?
I. Investment Advisor
II. Trustee
III. Insurance agent
IV. Attorney
A) I and II
B) I, III, and IV
C) I, II, and III
D) I, II, III, and IV - correct answerB) I, III, and IV
A trustee is not a member of the estate planning team, because the trustee's
responsibility is not to advise the client about forming the estate plan but to carry out the
terms of the trust document.
You are a CFP® professional and although you never went to law school, you consider
yourself to be very good at reviewing wills. Your client, Catherine, asks you to prepare a
will for her. Should you prepare a will for Catherine?
A) Yes, Catherine is your best client and you might lose her if you do not prepare the
will.
B) Yes, it is permissible for a CFP® professional to prepare a legal document.
C) No, preparing Catherine's will would be considered the unauthorized practice of law.
D) No, you should only prepare Catherine's will if you are going to be a beneficiary
under the will. - correct answerC) No, preparing Catherine's will would be considered
the unauthorized practice of law.
Drafting legal documents, such as wills, is an activity reserved for licensed attorneys. If
you are not a licensed attorney and you prepare a legal document, you have engaged in
the unauthorized practice of law.
Which of the following statements is not true regarding the need for an estate plan?
A) A wealthy, successful business owner who wants to pass his business to hischildren
would have complex estate planning needs.
B) The sole breadwinner in a family would need an estate plan with significant life and
disability insurance coverage.
C) A single individual with no family who does not own any assets and lives paycheck to
paycheck would not need an estate plan.
, D) An 80-year old with 5 adult children and 4 grandchildren who just married his third
wife would require estate planning for blended families. - correct answerC) A single
individual with no family who does not own any assets and lives paycheck to paycheck
would not need an estate plan.
Even individuals without significant assets need an estate plan.
The individual in Statement (C) would still need healthcare planning and an executor to
oversee his or her final burial wishes.
Statement (A) would need an estate plan to determine how to transfer his business in
the most cost-efficient manner and minimize estate taxes.
Statement (B) would need an estate plan to ensure the individual has sufficient life,
long-term care, and disability insurance.
Statement (D) would need an estate plan because issues with protection of inheritance
often arise in blended families.
Which of the following is correct regarding a power of attorney?
A) The principal is the individual that is granted decision-making power.
B) A guardian ad litem is an agent of the principal.
C) The agent is the person granting the power.
D) The attorney who prepares the document is the power of attorney. - correct
answerB) A guardian ad litem is an agent of the principal.
The parties to a power of attorney are the principal and the agent. A guardian ad litem is
an agent acting on behalf of the principal for a specific purpose (usually a minor child in
this instance).
Statement (A) is incorrect because the principal is the individual who is granting the
power to the agent to make decisions or act on their behalf.
Statement (C) is incorrect because the principal is the person granting the power.
Statement (D) is incorrect because the attorney is simply serving an administrative
function to execute the document.
Which of the following individuals died testate?
A) Manuel met with his attorney and prepared a will, leaving all of his assets to charity
shortly before his death from a heart attack.
B) Paula wrote an email to her children before her death, designating which children
would receive specific property when she died.
(2025/2026 Latest Exam Prep) | Complete
Study Guide & Verified Q&A
Which of the following is not a transfer cost associated with estate planning?
A) Document preparation
B) Attorney's fees
C) CPA's fees
D) Insurance premiums - correct answerD) Insurance premiums
Insurance premiums are not a transfer cost associated with estate planning. All of the
other answers are costs associated with estate planning.
You are opening a new financial planning practice and you would like to put together a
team of experts to help your clients with estate planning. Which of the following groups
represents the best team to help your clients?
A) Financial planner, CPA, and attorney.
B) CPA, psychiatrist, and insurance salesman.
C) Financial planner, attorney, and real estate agent.
D) Attorney, insurance salesman, and IRS agent. - correct answerA) Financial planner,
CPA, and attorney.
The best team for your client would include a financial planner, CPA, and attorney.
A licensed insurance specialist and real estate agent are also good additions to an
estate planning team, but the team described in statement (A) covers all of the required
aspects of an estate planning team: financial planning, tax planning, and legal
representation.
Although he has a vast fortune, Ricky has decided not to prepare an estate plan
because he believes that his surviving family members will divide up his assets
appropriately. Which of the following is not a risk associated with failing to plan an
estate?
A) Ricky's estate could incur excessive transfer taxes.
B) Ricky's favorite Corvette may not be transferred to his ex-wife, Carla.
C) Ricky's insurance policy on his own life may not be paid out to the named
beneficiary.
,D) Ricky's current wife, Lucille, may not provide for Ricky's children from a previous
marriage. - correct answerC) Ricky's insurance policy on his own life may not be paid
out to the named beneficiary.
The proceeds of insurance policies with named beneficiaries pass outside of probate via
state contract law. Ricky's failure to plan his estate will not affect the payment of his
insurance policy.
Tracey is a financial planner who recently received his CFP® designation. Tracey does
not have any other designations or licenses. Although Tracey's expertise is investment
planning, he is anxious to expand his client base and is willing to assist clients with any
area of financial planning. Over the last month, Tracey engaged in the following
activities with Troy, a new client.
I. During the initial meeting, Tracey collected personal data about Troy, including the
estate planning documents Troy had previously executed.
II. During the second meeting, Tracey recommended the use of a trust to fulfill some of
Troy's estate planning goals.
III. Troy called Tracey one afternoon and asked if Tracey could explain the probate
process to him, which Tracey promptly did.
IV. Tracey downloaded a copy of a generic will from the internet, filled in Troy's
information and gave the document to Troy to be executed.
Of the activi - correct answerA) IV only
Only statement four would be considered the unauthorized practice of law.
The drafting of legal documents is reserved for attorneys.
Inquiring about estate planning documents should be completed by all practitioners.
Recommending appropriate estate planning devices, such as trusts, can be done by
financial planners.
Explaining the probate process to a client would not be the unauthorized practice of law;
the line would be crossed if Tracey gave legal advice regarding the probate process.
Which of the following is not a common estate planning goal?
A) Maximizing transfer costs.
B) Minimizing transfer taxes.
C) Providing for liquidity at death.
D) Fulfilling client's healthcare decisions. - correct answerA) Maximizing transfer costs.
,Maximizing transfer costs is not an estate planning goal. Transfer costs should be
minimized to the greatest extent possible, while also fulfilling the client's goals.
All of the other answers are common estate planning goals.
Of the following, who should generally be a member of the estate planning team?
I. Investment Advisor
II. Trustee
III. Insurance agent
IV. Attorney
A) I and II
B) I, III, and IV
C) I, II, and III
D) I, II, III, and IV - correct answerB) I, III, and IV
A trustee is not a member of the estate planning team, because the trustee's
responsibility is not to advise the client about forming the estate plan but to carry out the
terms of the trust document.
You are a CFP® professional and although you never went to law school, you consider
yourself to be very good at reviewing wills. Your client, Catherine, asks you to prepare a
will for her. Should you prepare a will for Catherine?
A) Yes, Catherine is your best client and you might lose her if you do not prepare the
will.
B) Yes, it is permissible for a CFP® professional to prepare a legal document.
C) No, preparing Catherine's will would be considered the unauthorized practice of law.
D) No, you should only prepare Catherine's will if you are going to be a beneficiary
under the will. - correct answerC) No, preparing Catherine's will would be considered
the unauthorized practice of law.
Drafting legal documents, such as wills, is an activity reserved for licensed attorneys. If
you are not a licensed attorney and you prepare a legal document, you have engaged in
the unauthorized practice of law.
Which of the following statements is not true regarding the need for an estate plan?
A) A wealthy, successful business owner who wants to pass his business to hischildren
would have complex estate planning needs.
B) The sole breadwinner in a family would need an estate plan with significant life and
disability insurance coverage.
C) A single individual with no family who does not own any assets and lives paycheck to
paycheck would not need an estate plan.
, D) An 80-year old with 5 adult children and 4 grandchildren who just married his third
wife would require estate planning for blended families. - correct answerC) A single
individual with no family who does not own any assets and lives paycheck to paycheck
would not need an estate plan.
Even individuals without significant assets need an estate plan.
The individual in Statement (C) would still need healthcare planning and an executor to
oversee his or her final burial wishes.
Statement (A) would need an estate plan to determine how to transfer his business in
the most cost-efficient manner and minimize estate taxes.
Statement (B) would need an estate plan to ensure the individual has sufficient life,
long-term care, and disability insurance.
Statement (D) would need an estate plan because issues with protection of inheritance
often arise in blended families.
Which of the following is correct regarding a power of attorney?
A) The principal is the individual that is granted decision-making power.
B) A guardian ad litem is an agent of the principal.
C) The agent is the person granting the power.
D) The attorney who prepares the document is the power of attorney. - correct
answerB) A guardian ad litem is an agent of the principal.
The parties to a power of attorney are the principal and the agent. A guardian ad litem is
an agent acting on behalf of the principal for a specific purpose (usually a minor child in
this instance).
Statement (A) is incorrect because the principal is the individual who is granting the
power to the agent to make decisions or act on their behalf.
Statement (C) is incorrect because the principal is the person granting the power.
Statement (D) is incorrect because the attorney is simply serving an administrative
function to execute the document.
Which of the following individuals died testate?
A) Manuel met with his attorney and prepared a will, leaving all of his assets to charity
shortly before his death from a heart attack.
B) Paula wrote an email to her children before her death, designating which children
would receive specific property when she died.
