Deck 15: Preserving Your Estate

Question 1

Disability is a common reason for estates to break up.

Answer 1

False

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

People planning means providing sustenance and resources for family members.

Question 5

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

Question 6

Probate property includes only real property.

Question 7

Insufficient capital can cause problems paying estate taxes.

Question 8

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

Question 9

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

Question 10

Your gross estate is composed only of nonprobate property.

Question 11

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

Question 12

Inflation is a common reason for estates to break up.

Question 13

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

Question 14

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

Question 15

A potential estate planning problem is improper distribution of assets.

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

Minors can handle large sums of money and property.

Question 21

Intestacy results from dying without a valid will.

Question 22

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

Question 23

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

Question 24

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

Question 25

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

Question 26

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

Question 27

Only the wealthy need an attorney to prepare their wills.

Question 28

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 29

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

Question 30

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

Question 31

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

Question 32

Dying intestate means dying with a valid will.

Question 33

The federal estate tax is similar from state to state.

Question 34

A will is required by state law.

Question 35

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

Question 36

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

Question 37

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

Question 38

A valid will cannot be contested.

Question 39

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

Question 40

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

Question 41

A trust is a means of transferring property.

Question 42

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

Question 43

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

Question 44

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

Question 45

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

Question 46

Gift giving can reduce estate tax liability.

Question 47

A letter of last instruction is a legal document.

Question 48

An executor plays an important function during the probate process.

Question 49

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

Question 50

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

Question 51

The best choice for a trustee is a family member.

Question 52

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 53

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

Question 54

Death will erase any debts existing at that time.

Question 55

A will can be destroyed after a codicil is written.

Question 56

Mental capacity requires an individual to be at least 21.

Question 57

Witnesses to a will may not be family members.

Question 58

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

Question 59

All living trusts are revocable.

Question 60

A testamentary trust is established in a will.

Question 61

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

Question 62

Inheritance tax is the same as estate tax.

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

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

Question 65

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

Question 66

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 67

The taxable estate is less than the adjusted gross estate.

Question 68

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

Question 69

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

Question 70

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 71

____ 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 72

____ 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 73

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

Question 74

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

Question 75

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

Question 76

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

Question 77

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 78

The goal of estate planning is to:

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

Question 79

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 80

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