Deck 15: Preserving Your Estate

Question 1

Knowing where parents keep important documents is essential to the estate planning process.

Answer 1

True

Question 2

Life insurance comprises a large portion of most individuals probate estates.

Answer 2

False

Question 3

A potential estate planning problem is improper distribution of assets.

Answer 3

True

Question 4

The gross estate includes all the property subject to federal estate tax at a person's death.

Question 5

Your gross estate is all property subject to federal tax at your death.

Question 6

Your gross estate is composed only of nonprobate property.

Question 7

People planning means providing sustenance and resources for family members.

Question 8

Estate planning requires knowledge of wills,trusts,and investments.

Question 9

Probate property includes only real property.

Question 10

Inflation is a common reason for estates to break up.

Question 11

Insufficient capital can cause problems paying estate taxes.

Question 12

Funeral expenses are examples of second-level death-related costs.

Question 13

Disability is a common reason for estates to break up.

Question 14

Custodial accounts are used to protect the property of minor children.

Question 15

The main objective of estate planning is to save attorney's fees.

Question 16

Using a trust can help shield an estate from using improper vehicles of transfer.

Question 17

Property held in different states does not complicate the estate planning process.

Question 18

More damage is done to estates by doing nothing than by doing the wrong thing.

Question 19

Minors can handle large sums of money and property.

Question 20

Liquidity is important in an estate to pay for death costs and possible taxes.

Question 21

The appointment clause affirms that the will in question was really made out by the deceased.

Question 22

A will is required by state law.

Question 23

An estate plan is good only as long as it fits the needs,desires,and circumstances of the parties involved.

Question 24

The adoption of a child will cause estate transfer costs to change.

Question 25

In most states,divorce creates an automatic revocation or modification of a will.

Question 26

Gathering data on all aspects of the family is an important estate planning function.

Question 27

The federal estate tax is similar from state to state.

Question 28

Dying intestate means dying with a valid will.

Question 29

Typically,a will must be signed by two witnesses to be valid.

Question 30

A will may be invalid if the testator was under undue influence of another person.

Question 31

A valid will cannot be contested.

Question 32

A codicil is a simple and convenient legal means of modifying a will.

Question 33

Updating an estate plan is a critical part of the estate planning process.

Question 34

Only the wealthy need an attorney to prepare their wills.

Question 35

A new will revokes previous wills only if a statement such as "This will revokes all previous wills" appears.

Question 36

If you die intestate,federal law dictates the disposition of your estate.

Question 37

The intestate process is federally mandated,and is similar from state to state.

Question 38

Intestacy results from dying without a valid will.

Question 39

In most states,the surviving spouse may be entitled to a portion of the estate beyond that granted in the will through the right of election.

Question 40

The testator of a will always receives property from the will.

Question 41

All living trusts are revocable.

Question 42

The best choice for a trustee is a family member.

Question 43

An executor plays an important function during the probate process.

Question 44

Witnesses to a will may not be family members.

Question 45

A trust is a means of transferring property.

Question 46

Mental capacity requires an individual to be at least 21.

Question 47

A durable power of attorney for health care allows loved ones to terminate life support.

Question 48

A will can be destroyed after a codicil is written.

Question 49

A power of attorney allows an individual to write a will.

Question 50

Joint ownership of assets is an effective substitute for a will.

Question 51

Death will erase any debts existing at that time.

Question 52

One should make copies of his will and store them in different places.

Question 53

A husband and wife together could give $20,000 to their niece with no gift tax liability even if the entire $20,000 came from the wife's checking account.

Question 54

A gift is given when the donor relinquishes control over the asset.

Question 55

Proof of mental capacity lies on the person contesting a will,not the individual writing a will.

Question 56

Gift giving can reduce estate tax liability.

Question 57

The recipient of the gift will pay any gift tax that is due.

Question 58

A letter of last instruction is a legal document.

Question 59

A will is revoked if a second legitimate will is created.

Question 60

A testamentary trust is established in a will.

Question 61

Trust services are used exclusively by those who cannot handle large sums of money,such as minors.

Question 62

The gift tax law allows a person to give gifts up to $10,000 tax free.

Question 63

This situation calls especially for an estate plan based on the people planning perspective.

A) working couple with handicapped child
B) married man with no dependents
C) single person, no dependents, some property
D) single person, no property
E) mother and daughter, independent, ages 65 and 43, share housing

Question 64

Spouses who are U.S.citizens are treated the same as non-citizen spouses for estate tax purposes.

Question 65

Maxine's estate is worth $600,000.It will not be subject to federal estate taxes.

Question 66

The taxable estate is less than the adjusted gross estate.

Question 67

Most commentators believe the annual exclusion amount from estate tax will be set at $3,500,000 for 2013.

Question 68

____ would represent a second level death-related cost.

A) Unpaid bills
B) Health related bills
C) Federal estate taxes
D) Inflation
E) none of the above

Question 69

The goal of estate planning is to:

A) accumulate
B) preserve
C) distribute
D) all of the above
E) none of the above

Question 70

Estate planning is closely related to

A) retirement and investment planning.
B) tax and retirement planning.
C) tax and investment planning.
D) retirement and insurance planning.
E) insurance and investment planning.

Question 71

With the passage of the 2001 tax laws,there is now an advantage to incurring estate tax rather than gift tax liabilities.

Question 72

When a father deposits cash in a bank account held jointly with his daughter,a gift is made when the daughter withdraws it.

Question 73

The unlimited marital deduction requires the filing of a separate tax return.

Question 74

Inheritance tax is the same as estate tax.

Question 75

Why does an estate "Break Up"

A) Death related costs
B) Inflation
C) Improper use of vehicles of transfer
D) Lack of liquidity
E) all of the above

Question 76

Jill and Jack are siblings.Jill wants to gift $15,000 to Jack's daughter.She and Jack can join in that gift to take advantage of gift splitting.

Question 77

____ would be a first-level death-related cost.

A) Funeral expenses
B) Federal estate taxes
C) Probate expenses
D) Inheritance taxes
E) Administrative costs

Question 78

Estate tax liability may be reduced by a state death tax credit.

Question 79

Estate planning us designed to:

A) administer and distribute assets
B) minimize taxes
C) increase size of estate
D) all of the above
E) none of the above

Question 80

The top federal gift and estate tax rate for 2013 is expected to be 45 percent.