Question 1

Which of the following are other names for a revocable trust?
I. Inter vivos trust.
II. Living trust.
III. Loving trust.
IV. Testamentary trust.

A) I, II.
B) III, IV.
C) I, II, III.
D) I, II, IV.

I, II, III.

Accepted Answer

I, II, III.&#10;

Question 2

The two main types of advance medical directives are:
I. Disclaimer
II. Durable power of attorney for health care
III. Living will
IV. Power of attorney

A) II, III.
B) I, IV.
C) II, IV.
D) III, IV.

II, III.

Accepted Answer

The two main types of advance medical directives are II. Durable power of attorney for health care, which allows someone else to make healthcare decisions on your behalf, and III. Living will, which specifies your wishes regarding medical treatment in situations where you can no longer express informed consent.

Question 3

All of the following are types of wills except:&#10;A) Holographic.&#10;B) Joint.&#10;C) Mutual.&#10;D) Wait-and-see.

Accepted Answer

Holographic, joint, and mutual wills are all valid types of wills. The option "wait-and-see" is not a type of will, but rather a legal doctrine that allows for certain decisions to be delayed until a later time.

Question 4

The marital and charitable deduction are taken from the _____.&#10;A) Adjusted gross estate.&#10;B) Gross estate.&#10;C) Taxable estate.&#10;D) Tax base estate.

Accepted Answer

The answer of The marital and charitable deduction are taken...

Question 5

A Crummey power allows gifts to a/an _____ to qualify for the federal annual gift tax exclusion&#10;A) Estate.&#10;B) Irrevocable trust.&#10;C) Revocable trust.&#10;D) Will.

Accepted Answer

A Crummey power is a provision in an irrevocable trust that allows the beneficiary to receive a gift and withdraw it within a certain period of time (usually 30 days). This withdrawal right makes the gift a present interest gift, which qualifies for the annual gift tax exclusion. This exclusion allows an individual to give up to a certain amount (currently $15,000 per year) to another person without having to pay gift tax.

Question 6

Which of the following is not an advantage of a revocable trust?&#10;A) Asset protection.&#10;B) Incapacity Planning.&#10;C) Privacy.&#10;D) Probate avoidance.

Accepted Answer

Revocable trusts do not provide asset protection as the grantor retains control and ownership of the assets. They can still be subject to potential creditors and lawsuits.

Question 7

An individual is intestate if they die without a _____.&#10;A) Advanced Health care Directive.&#10;B) Power of Attorney.&#10;C) Trust.&#10;D) Will.

Accepted Answer

An individual is intestate if they die without a will. This means they have not designated how their assets should be distributed after their death.

Question 8

The two main types of property transfers are:&#10;A) Beneficiary and Incapacity.&#10;B) Joint with Rights of Survivorship and Tenancy by the Entirety.&#10;C) Lifetime and testamentary.&#10;D) Tenancy in Common and Tenancy by the Entirety.

Accepted Answer

Lifetime transfers occur when property is transferred during the individual's lifetime, such as through a gift or sale. Testamentary transfers occur when the property is transferred after the individual's death through a will or trust. Option A is not a valid type of property transfer, and Option B only applies to real property held by spouses. Option D refers to forms of co-ownership, not types of property transfers. Therefore, C is the most appropriate option.

Deck 5: Estate Planning Basics