Deck 19: Estate Planning

Question 1

Estate planning includes a subject most people would rather avoid: death-your own or that of your spouse.

Answer 1

True

Question 2

A will is a legal declaration of a person's mind as to the disposition of his or her property after death.

Answer 2

True

Question 3

If you marry after you have made a will,the will is revoked automatically unless certain conditions are met.

Answer 3

True

Question 4

Estate planning is useful only to rich and elderly people.

Question 5

When death occurs,proof of claims must be produced or the claims will not be processed.

Question 6

An estate plan is usually implemented by a will and one or more trust agreements.

Question 7

Last-minute "death-bed" estate planning may fail to carry out your wishes.

Question 8

If you die intestate,the state's law of descent and distribution becomes your will.

Question 9

A large percentage of people do little or nothing to provide for those who will survive them.

Question 10

Estate planning is an integral part of financial planning.

Question 11

It is unnecessary to modify your will when you divorce or remarry.

Question 12

Most people cannot afford the expense of using trusts.

Question 13

If you marry after you have made a will,you are better off drawing a new will to fit your new circumstances.

Question 14

Unmarried couples face formidable retirement and estate planning challenges.

Question 15

If you die without a valid will,you die intestate.

Question 16

Estate planning is not an essential part of retirement planning.

Question 17

Estate planning is a definite plan for the administration and disposition of one's property during one's lifetime and at one's death.

Question 18

Millions of nontraditional households have unique estate planning problems.

Question 19

If you never married,you don't need to organize your financial affairs.

Question 20

LIMRA International,a financial services research organization,provides information about estate planning to survivors in the form of a booklet.

Question 21

A guardian is a person or an institution that holds property for the benefit of someone else.

Question 22

Wills have existed for thousands of years; the oldest known will was written by an Egyptian pharaoh in 2448 BC.

Question 23

Another name for an executor is an executrix.

Question 24

Probate is less expensive,quicker,and private than a living trust.

Question 25

Joint ownership is a good substitute for a will.

Question 26

Making any changes on the face of your will can invalidate it.

Question 27

Probate is a legal procedure of proving a valid or invalid will.

Question 28

A formal will may be either typed or on a preprinted form.

Question 29

Your executor can be the trust department of a bank.

Question 30

A prenuptial agreement is a documentary agreement between spouses after marriage.

Question 31

A simple will creates lower overall taxation for all individuals.

Question 32

The cost of preparing a will varies from place to place.

Question 33

A codicil is a document that explains,adds,or deletes provisions in your existing will.

Question 34

A living trust avoids probate at your death.

Question 35

You should avoid probate because it is expensive,lengthy,and public.

Question 36

The adjusted gross estate is equal to the gross estate minus debts and costs.

Question 37

The main advantage of the exemption trust will is that it eliminates future taxation of the exemption amount and any growth in it.

Question 38

Generally,the cost of writing a will is more than that for writing a living trust.

Question 39

A beneficiary is a person who has been named to receive property under the will.

Question 40

A statutory will is one type of formal will.

Question 41

Perhaps the most popular form of marital trust is the Q-TIP trust.

Question 42

An inter vivos trust is a property management arrangement that you establish while you are alive.

Question 43

A credit-shelter trust is perhaps the most common estate-planning trust.

Question 44

A qualified personal residence trust,or QPRT,lets you get your home or vacation home out of your estate.

Question 45

With a marital-deduction trust,you can leave your spouse any money that doesn't go into a credit-shelter trust.

Question 46

A living will is a good substitute for a traditional will.

Question 47

Community property is any property that has been acquired by only one of the spouses during the marriage,but not by gift,devise,bequest or inheritance,or,by the income therefrom.

Question 48

Related to the concept of a living will is a durable power of attorney also known as a health care proxy.

Question 49

Most states do not recognize living wills.

Question 50

A trust is a legal arrangement through which a trustee holds your assets for your benefit or that of your beneficiaries.

Question 51

A disclaimer trust is designed for the couple who do not yet have enough assets to need a credit-shelter trust.

Question 52

Your estate consists of everything you own,including interests in trusts and powers of appointment.

Question 53

An ethical will is a way to pass on your values and beliefs to your heirs.

Question 54

A credit-shelter trust is known as a bypass trust,a "residuary" trust,an A/B trust,or a family trust.

Question 55

If only a few changes are needed in your will,adding a codicil may be the best choice.

Question 56

A living will provides for your wishes to be followed if you become so physically or mentally disabled that you are unable to act on your own behalf.

Question 57

The state law sets the fees for executors,whether professionals or friends.

Question 58

A generation-skipping trust allows people to directly leave a substantial amount of money to their grandchildren.

Question 59

You can assign a durable power of attorney to anyone you choose.

Question 60

A letter of last instruction can provide your heirs with important information.

Question 61

In estate planning,if you are married:

A)you do not need a will as your spouse is entitled to all of your assets.
B)your estate planning becomes simpler once you have children.
C)you should let your spouse do all of your estate planning.
D)your situation is more complex than when you were still single.
E)your planning consists solely of naming beneficiaries for your life insurance.

Question 62

Gerry Legere has died without writing a will.What is the legal term for this?

A)Probate
B)Intestate
C)Testamentary
D)Statutory
E)Codicil

Question 63

Which one of the following statements is true about estate planning?

A)Estate planning is only for the rich.
B)It is always easy to plan for your family's financial security in the event of your death.
C)Most people provide a lifetime of income for those who will survive them.
D)Most people give a tremendous amount of attention to estate planning.
E)Many people do little to provide for those who will survive them.

Question 64

Inheritance taxes are imposed only by the state governments.

Question 65

A unique feature of a self-declaration trust is that the creator of the trust is also the trustee.

Question 66

Grady Perdue has assets worth $1,500,000 and has written a legal document that specifies that all of his money go to his children.After he dies,there is a legal process to determine whether his document specifying how his assets be divided is valid.This is also the legal process by which his executor manages and distributes his property.What is this legal process called?

A)Estate
B)Will
C)Trust
D)Probate
E)Terms of distribution

Question 67

Which one of the following statements is correct regarding wills?

A)Only married people need a will.
B)Only married people with dependents need a will.
C)Only the rich with considerable estates need a will.
D)Every adult should have a will.
E)Only senior citizens need a will.

Question 68

Which one of the following statements is correct?

A)Estate planning usually involves a will and trust agreements.
B)Most people do extensive estate planning.
C)Most people think they will live forever.
D)People should not worry about estate planning until they are age 65.
E)Estate planning is really only necessary if you are wealthy.

Question 69

Which of the following is an important document needed for estate planning?

A)Your driver's license
B)Your transcript from college
C)Your birth certificate
D)Your birthday cards
E)All of these documents are needed in estate planning.

Question 70

Gerald Wilkins owns a home worth $250,000,a car worth $15,000,various investments worth $600,000 and other personal assets worth $25,000.What are these things to Gerald?

A)Estate
B)Will
C)Trust
D)Probate
E)Liabilities

Question 71

Joseph Vu has assets worth $1,200,000.He has written a legal document that specifies that these assets be divided equally between his wife and his two sons upon his death.What is this legal document?

A)Estate
B)Will
C)Trust
D)Probate
E)Liabilities

Question 72

Estate planning has two parts.The second part of estate planning consists of:

A)building your estate through working.
B)transferring your estate, at your death, in the manner you have specified.
C)deciding who should be your attorney.
D)evaluating your assets and liabilities.
E)buying life insurance.

Question 73

Estate planning has two parts.The first part consists of:

A)building your estate through savings, investments, and insurance.
B)transferring your estate, while you are alive, in the manner you have specified.
C)deciding who is going to get what.
D)evaluating your assets and liabilities.
E)planning for the period right after you die.

Question 74

Which of the following is true if you are an unmarried couple?

A)A partner has the same legal rights as a spouse.
B)Unmarried couples can use the marital deduction.
C)Estate planning is less important for unmarried couples.
D)If your partner is not named as the beneficiary, your pension plan proceeds will go to your closest blood relative.
E)All of these are true about unmarried couples.

Question 75

Life insurance may be a reasonable,feasible,and economical means of paying your estate tax.

Question 76

A will is:

A)a way to transfer your property according to your wishes after you die.
B)a synonym for a prenuptial agreement.
C)a legal document authorizing someone to act on your behalf.
D)a synonym for a letter of last instruction.
E)a legal arrangement through which your assets are held by someone else.

Question 77

Which of the following is a part of estate planning?

A)Making a will
B)Setting up a trust
C)Accumulating funds for your future
D)Disposing of your property at your death
E)All of these are part of estate planning.

Question 78

According to a recent American Association of Retired Persons survey,over 50 percent of Americans age 45 or older have not drawn up a will.

Question 79

Which is true of estate planning?

A)It includes managing your property while you are alive
B)It includes dealing with what happens to your property after your death
C)It is part of retirement planning
D)It is part of financial planning
E)All of these

Question 80

If you are married,your estate planning involves:

A)the interests of at least two people.
B)fewer legal requirements.
C)fewer financial responsibilities.
D)seeking the services of a securities broker.
E)only yourself.