Deck 19: Estate Planning

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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 6

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

Question 7

Estate planning is not an essential part of retirement planning.

Question 8

Millions of nontraditional households have unique estate planning problems.

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

Estate planning is an integral part of financial planning.

Question 15

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

Question 16

Unmarried couples face formidable retirement and estate planning challenges.

Question 17

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

Question 18

Most people cannot afford the expense of using trusts.

Question 19

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

Question 20

Estate planning is useful only to rich and elderly people.

Question 21

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

Question 22

A simple will creates lower overall taxation for all individuals.

Question 23

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

Question 24

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

Question 25

A living trust avoids probate at your death.

Question 26

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

Question 27

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

Question 28

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

Question 29

Joint ownership is a good substitute for a will.

Question 30

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

Question 31

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

Question 32

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

Question 33

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

Question 34

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

Question 35

Making any changes on the face of a will,that has been signed and witnessed,can invalidate it.

Question 36

A statutory will is one type of formal will.

Question 37

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

Question 38

Your executor can be the trust department of a bank.

Question 39

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

Question 40

Another name for an executor is an executrix.

Question 41

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

Question 42

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

Question 43

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

Question 44

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

Question 45

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

Question 46

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

Question 47

Estate planning requires an inventory of everything you own,including interests in trusts and powers of appointment.

Question 48

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

Question 49

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

Question 50

Many states do not recognize living wills.

Question 51

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

Question 52

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 53

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

Question 54

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

Question 55

A living will is a substitute for a traditional will.

Question 56

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

Question 57

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

Question 58

A letter of last instruction can provide your heirs with important information,such as the details of your funeral arrangements.

Question 59

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

Question 60

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

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

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 63

Which one of the following statements is correct?

A)An estate plan is usually implemented by 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 64

Joseph Smith has assets worth $1,200,000.He has written a legal document that specifies that these assets are to 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 65

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 66

Inheritance taxes are imposed only by the state governments.

Question 67

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

Question 68

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 written will.
E)Only senior citizens need a will.

Question 69

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)Estate planning does not require taking an inventory of everything you own.
D)Many people give a lot of thought to setting their financial affairs in order.
E)Many people do little to provide for those who will survive them.

Question 70

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 71

Which of the following is a part of estate planning?

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

Question 72

If you are married,your estate planning involves:

A)the interests of at least two people.
B)simple legal requirements.
C)only your children.
D)seeking the services of a securities broker.
E)only yourself.

Question 73

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

Question 74

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 75

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 76

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)Your voter registration

Question 77

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 78

Which is true of estate planning?

A)It includes handling 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 79

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)Your partner will always receive your pension even if not named as the beneficiary.

Question 80

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.