Deck 26: Estates and Trusts

Question 1

Property held in joint tenancy or tenancy by the entirety is not controlled by a will.

Answer 1

True
Explanation: Property held in joint tenancy or tenancy by the entirety is not controlled by a will because the property passes automatically to the surviving cotenant by right of survivorship.

Question 2

If an individual dies without a will,then they are said to have died intestate.

Answer 2

True
Explanation: If a person dies without making a will,or if she makes a will that is declared invalid,she is said to have died intestate

Question 3

A testator can revoke a will before his death.

Answer 3

True
Explanation: A will is revocable until the moment of the testator's death.

Question 4

Under the laws of some states,the birth of a child after the execution of a will may operate as a partial revocation of the will.

Question 5

The probate process involves collecting the decedent's property,paying off debts,and distributing the remaining property to others.

Question 6

A Totten trust creates a revocable living trust.

Question 7

To be valid,a holographic will must be typed.

Question 8

A person can have multiple domiciles at a time.

Question 9

A durable power of attorney terminates when the principal becomes incapacitated.

Question 10

A codicil is an amendment to a will.

Question 11

Under the doctrine of cy pres,the trust will not fail if the settlor indicated a general intention to devote the property to charitable purposes.

Question 12

A will that is not executed with the formalities required by state law is void.

Question 13

A bequest is a gift of personal property or money provided in a will.

Question 14

An estate is all of the property that an individual owns.

Question 15

The residuary is the remaining property of a person's estate after bequests and devises have been made.

Question 16

A personal representative under a will is also known as the executor.

Question 17

To interpret a will,the court gives preference to the statements of the beneficiaries rather than the intent of the testator.

Question 18

A testator's children would be called his issue.

Question 19

An interested party in a will can be a witness to the will.

Question 20

A will confers no present interest in the testator's property.

Question 21

A gift is given to the testator's issue or descendants,with each surviving descendant dividing the share that his or her parent would have taken if the parent had survived.This is known as division ________.

A)per stirpes
B)per capita
C)inter vivos
D)causa mortis

Question 22

Anna wants to create a will indicating that her favorite grandchild,Jesse,will inherit her house.Anna takes an ordinary sheet of paper and,in her own handwriting,states that it is her intent to leave her house to Jesse when she dies.She dates and signs the will,but there are no witnesses to it.Anna then tells her entire family about the will.Anna lives in a state where holographic wills are recognized,but nuncupative wills are not.Will Anna's will be recognized and followed?

A)Yes,because Anna's will is entirely in her handwriting.
B)No,because there were no witnesses present when Anna made her will.
C)No,because a will must always be witnessed.
D)Yes,because Anna's will has already been disclosed.

Question 23

Which of the following debts of the decedent must be paid upon his/her death?

A)All of the decedent's debts
B)Only debts secured by the decedent's property
C)Only debts covered by the statute of frauds
D)Only consumer debts

Question 24

Jim created a valid will in 2003.Three years later,he wanted to make some minor changes to the will.Jim wants to modify the provisions of his will without making an entirely new will.He can amend his will by executing a(n)________.

A)bequest
B)residuary
C)advance directive
D)codicil

Question 25

Which of the types of wills is written and signed in the testator's handwriting?

A)Nuncupative wills
B)Holographic wills
C)Notarial wills
D)Self-proved wills

Question 26

If an ambiguity or conflict arises when people read and/or interpret a will,courts will:

A)look for evidence of the intent of the testator within the will.
B)ask the family members or beneficiaries for their preference(s).
C)appoint a probate referee to decide the future of the will.
D)declare the will void or invalidate it due to its ambiguity.

Question 27

What is a gift of real property called?

A)Residuary
B)Estate
C)Bequest
D)Devise

Question 28

A(n)________ is a gift of personal property or money.

A)estate
B)bequest
C)will
D)deed

Question 29

Which of the following is true of testamentary capacity?

A)A person must be in perfect mental health to have testamentary capacity.
B)A person must be 18 years of age (in most states)in order to have testamentary capacity.
C)A person must have personal property to have testamentary capacity.
D)A person must have real property to have testamentary capacity.

Question 30

Lineal descendants-the children and grandchildren of a person-are known as:

A)devises.
B)issue.
C)residuary.
D)obligees.

Question 31

Which of the following is the source of law for regulating the distribution of property upon death?

A)State statutes and common law
B)State statutes only
C)Federal statutes and common law
D)Federal statutes only

Question 32

A joint will:

A)can only have a single beneficiary.
B)is only valid if the testators are a married couple.
C)is a single instrument that constitutes the will of both or all of the testators.
D)cannot be changed once it is created.

Question 33

What is the term for planning for the transfer of a person's estate in later life and at death?

A)Estate Planning
B)Probate
C)Corporate Giving
D)Intestate

Question 34

Incorporation by reference refers to:

A)the specification of heirs in a will without naming them,e.g. ,to my children.
B)the necessity that witnesses to a will do not benefit from it in any way.
C)the inclusion of extrinsic documents in a will.
D)the requirement that a will is executed according to state law.

Question 35

A ________ is oral in nature.

A)nuncupative will
B)holographic will
C)notarial will
D)self-proved will

Question 36

Sarah is 75 years old.She has a serious illness,but she does not want to be kept alive by extraordinary medical technology.Specifically,she does not want to be kept alive by a respirator.Which of the following should Sarah use to make sure that her wishes are followed?

A)A living will
B)A codicil
C)A joint will
D)A nuncupative will

Question 37

When Rita Ryan died,she left a will naming her children,John and Dale,as the sole beneficiaries.In her will,Rita designated John as the executor of her estate and excused John from posting a bond as executor.At the time of Rita's death,she owned a parcel of land with her sister,Ann,as joint tenants with right of survivorship.With respect to Rita's interest in the land,it will pass to:

A)John and Dale outside of Rita's estate by right of survivorship.
B)John and Dale through Rita's estate after the will is probated.
C)Ann through Rita's estate after the will is probated.
D)Ann outside of Rita's estate by right of survivorship.

Question 38

Grandfather Summers had two children,Mary and Bill.Mary,her father's favorite,has one child,Margaret.Bill has two children,Jill and John.Mary and Bill die before Summers (in legal terms,predecease him),but all three grandchildren are living at the time of his death.Summers' estate has to be divided per capita.Who will get what?

A)The spouses of Mary and Bill will inherit the estate.
B)Mary's children will inherit the majority share of the estate.
C)All three grandchildren will receive an equal share.
D)The estate will go to a trust because Mary and Bill are deceased.

Question 39

What is an amendment of a will called?

A)Bequest
B)Residuary
C)Advance directive
D)Codicil

Question 40

Which of the following is a comprehensive,uniform law that is intended to update and unify state law concerning the disposition and administration of property at death?

A)Uniform Probate Code
B)Uniform Estate Planning Code
C)Uniform Testate and Intestacy Code
D)Uniform Estate Administration Code

Question 41

Thomas wants to create an inter vivos trust for the benefit of his adult children.To create a valid inter vivos trust,he must have a level of mental capacity that is the same as that required to:

A)make a valid contract.
B)make a valid will.
C)stand trial in a criminal case.
D)testify under oath in a criminal case.

Question 42

A trust that is established and effective during the settlor's lifetime is known as a(n)________ trust.

A)causa mortis
B)per capita
C)per stirpes
D)inter vivos

Question 43

A Totten trust is created when a person:

A)deposits money in a bank for the benefit of another.
B)directs in his will that a trust be created upon that person's death.
C)executes a trust using a holographic will.
D)opens a trust only for the benefit of the indigent.

Question 44

A(n)________ is a legal relationship in which a person who has legal title to property has the duty to hold it for the use or benefit of another person.

A)accession
B)lien
C)trust
D)codicil

Question 45

A durable power of attorney for healthcare only becomes relevant when:

A)registered with the Secretary of State.
B)filed with the Department of Health.
C)the principal has become incompetent.
D)the hospital has received a $500 fee.

Question 46

The rule against perpetuities does not apply to a:

A)testamentary trust.
B)spendthrift trust.
C)charitable trust.
D)Totten trust.

Question 47

If the decedent died intestate,the personal representative is called a(n)________.

A)trustee
B)executor
C)administrator
D)beneficiary

Question 48

A person who is appointed under a will to look after the property of the decedent is known as a(n):

A)obligee.
B)estate agent.
C)legal heir.
D)executor.

Question 49

A personal representative of an estate would breach his/her fiduciary duty if the personal representative:

A)combined personal funds with funds of the estate so that both could purchase treasury bills.
B)represented the estate in a lawsuit brought against it by a disgruntled relative of the decedent.
C)distributed property in satisfaction of the decedent's debts.
D)engaged a non-CPA to prepare the records for the estate's final accounting.

Question 50

If the deceased had no surviving relatives,the property escheats to ________.

A)the executor
B)a charity picked by an assigned trustee
C)his friends
D)the state

Question 51

Krieg's will created a trust to take effect upon his death.The will named Krieg's spouse as both the trustee and personal representative (executor)of the estate.The will provided that all of Krieg's securities were to be transferred to the trust and named Krieg's child as the beneficiary of the trust.Which of the following is true under the circumstances?

A)Krieg has created a testamentary trust.
B)Krieg's spouse may not serve as both the trustee and personal representative.
C)Krieg has created a spendthrift trust.
D)The trust is invalid because securities cannot be transferred to a trust.

Question 52

In intestate succession what is the term for the individuals that stand to inherit the decedent's assets?

A)Probate
B)Heirs
C)Incorporation
D)Executors

Question 53

If a person dies intestate,his real property will be distributed:

A)to the state in which the property is located.
B)to the state of the person's domicile.
C)according to the law of the state in which the property is located.
D)according to the law of the state of the person's domicile.

Question 54

Which of the following is most likely to breach one of the trustee's fiduciary duties?

A)Selling stock owned by the trust to realize capital gains.
B)Selling stock owned by the trust because it has declined in value over the last three years.
C)Delegating the selection of trust investments to an investment advisor.
D)Delegating the preparation of statements of account to an accountant.

Question 55

Which of the following is not a requirement for the formation of a valid trust?

A)Conveyance of specific property
B)Proper purpose
C)Legal capacity
D)Appointment of trustee

Question 56

A trust that is established in a person's will and that takes effect only upon that person's death is called a(n):

A)inter vivos trust.
B)spendthrift trust.
C)Totten trust.
D)testamentary trust.

Question 57

A particular trust has income-producing real property as its sole asset.Which of the following trust proceeds or expenditures should be allocated to the principal?

A)Annual payments on a fire insurance policy to protect the trust property.
B)The cost of a long-term permanent improvement to the trust property.
C)Rental income from the trust property.
D)Real estate taxes paid on the trust property.

Question 58

A document that gives person A the right to act for person B,in the event that person A becomes incapacitated is known as a:

A)durable power of attorney.
B)living trust.
C)right of succession.
D)codicil.

Question 59

The property held in trust is called the ________.

A)attachment
B)lien
C)corpus
D)accession

Question 60

John died without leaving a will.He left a wife and two children.He lived in Boise,Idaho,and he owned a ski condo in Aspen,Colorado.How will John's ski condo be distributed upon his death?

A)The law of intestate succession of Idaho will be followed,because Idaho is the state where John was domiciled at the time of his death.
B)The law of intestate succession of Colorado will be followed,because Colorado is where John's condo is located.
C)The federal law of intestate succession will be followed,because John's property is located in more than one state.
D)The property will escheat to the State of Idaho.

Question 61

Which of the following statements about the English feudal system and disposition of property is false?

A)The lords and knights essentially had a life estate.
B)The lords and knights had only the right to use the land.
C)A landowner's rights in land terminated upon his death.
D)The king owned his castle and each lord and knight owned their own land.

Question 62

A(n)________ is a document executed with specific legal formalities by a testator that contains her instructions about the way her property will be disposed of at her death.

A)trust
B)will
C)advance directive
D)res

Question 63

A person making a will is called the ________.

A)settlor
B)heir
C)testator
D)bequest

Question 64

Which of the following arises when there has been an incomplete disposition of trust property and the creation of a trust is necessary to effectuate a settlor's intent or avoid unjust enrichment?

A)Express trust
B)Spendthrift trust
C)Totten trust
D)Resulting trust

Question 65

In her will,Beth devised her house to her friend,Janet.When Beth died,Janet took possession over the house and Beth's estate contained $300,000 of ungifted cash.A few days later,Janet learned the house Beth gifted to her was subject to a $120,000 mortgage.Which of the following statements is true?

A)Janet is entitled to $120,000 from the estate to make her gift whole.
B)Janet is entitled to $120,000 from the estate because Beth's will devised the house without mention that it was subject to a mortgage.
C)Janet is entitled to $120,000 plus any reasonable attorney fees from the estate because it was Beth's intent for her to receive the property without any outstanding claims.
D)Janet is not entitled to $120,000 from the estate and if she keeps the house,she will be liable for any outstanding claims against it.

Question 66

A(n)________ is a written document that directs others how future health care decisions should be made in the event that the individual becomes incapacitated.

A)advance directive
B)trust
C)residuary
D)bequest

Question 67

A distinguishing feature between the making of an inter vivos gift and the creation of a trust is that:

A)a gift may be made orally whereas a trust must be in a signed writing.
B)a gift is irrevocable whereas a trust may be revoked in certain cases.
C)to create a valid trust,the creator must receive some form of consideration.
D)the beneficiary of a trust must be notified of the trust's creation.

Question 68

Which of the following is true of a spendthrift trust?

A)The settlor can make himself the beneficiary.
B)It restricts the voluntary transfer of a beneficiary's interest.
C)Assignees can claim rights to it.
D)Creditors can claim rights to it.

Question 69

Which of the following is the legal term for a person's permanent home?

A)Escheat
B)Domicile
C)Res
D)Residency

Question 70

Which of the following terms is used for an heir born after the execution of the testator's will?

A)dower
B)curtsey
C)pretermitted
D)bequest

Question 71

Which of the following is an agent who is given express,written authorization by his or her principal to do a particular act or series of acts on behalf of the principal?

A)Executor
B)Trustee
C)Devisee
D)Attorney-in-fact

Question 72

Under exceptional circumstances in which the creation of a trust is necessary to effectuate a settlor's intent or avoid unjust enrichment,the law imposes a trust even though no express trust exists.This is known as a(n)________ trust.

A)implied
B)spendthrift
C)Totten
D)blind

Question 73

As part of creating an estate plan,an attorney will likely do all of the following,except:

A)distribute property to beneficiaries.
B)take an inventory of the client's assets.
C)learn the client's objectives.
D)draft the instruments necessary to carry out the plan.

Question 74

Which of the following follows after the testator's signature and states the formalities that have been followed in the execution of the will?

A)Attestation clause
B)Codicil
C)Survival clause
D)A notary's statement of execution

Question 75

Which of the following statements about revocation of wills is false?

A)Physical destruction of a will with the intent to revoke it constitutes revocation.
B)A will can be revoked by operation of law without any act on the part of the testator signifying revocation.
C)A will is revocable until the moment of the testator's death,and as a result,confers no present interest in the testator's property.
D)A later will,even if it does not expressly revoke the prior will,will operate to revoke the prior will in its entirety.

Question 76

When a person procures the transfer of property by means of fraud or duress,he becomes a(n)________ and is under an obligation to return the property to its original owner.

A)constructive trustee
B)implied trustee
C)executor
D)administrator

Question 77

A bequest is also called a(n):

A)devise.
B)legacy.
C)issue.
D)deed.

Question 78

Which of the following statements about testamentary capacity to make a valid will is false?

A)To be of "sound mind" a person need only realize that she is making a will.
B)In most states,a person needs to be 18 years old.
C)A person that moves in and out of periods of lucidity can still have testamentary capacity if she executed her will during a lucid period.
D)The standard for mental capacity to make a will is fairly low.

Question 79

Because joint tenancy and life insurance are ways of directing the disposition of property,they are sometimes referred to as ________.

A)will replacements
B)will substitutes
C)equity wills
D)contract wills

Question 80

Which of the following statements about The Patient Self-Determination Act (Act)is false?

A)The Act requires health care providers such as hospitals,nursing homes,hospices,and home health agencies,to provide written information to adults receiving medical care about their rights concerning the ability to accept or refuse medical or surgical treatment.
B)The Act requires the provider to document in the patient's medical record whether the patient has executed an advance directive.
C)The Act is federal and does not speak to the provider's compliance with state law concerning advance directives.
D)The Act forbids discrimination against the patient based on the individual's choice regarding an advance directive.