Deck 31: Estate Planning

Question 1

Billionaire Warren Buffett said that children should inherit enough money so that they can do anything, but not so much that they can do nothing. Is it good for people to inherit money How much At what age How much would you like to leave your children

Answer 1

The author is agreed with what Mr. WB has said about inheritance of money by children. Inheritance of father's property will leave children in a sound financial position and will help them in taking key steps to shape their future.
It is definitely an advantage for children to possess father's property. There need not be a limit on the extent of the inheritance amount to be received by the legal heirs from their parents. Actually, parents make all the efforts to leave their legal heirs enough to lead a comfortable life and pursue their goals and ambitions. In the author's opinion, the inheritance should not be less than the amount required to lead a comfortable life and pursue their ambitions.
In author's case, he wants to leave enough money to his legal heirs so that they will have a home to live in, a nice amount of money to spend in case of necessities and a piece of real estate because it will be a nice investment.

Question 2

After nearly 40 years of marriage, Frank Honigman executed a new will that left his wife only the minimum required by law. The balance went to his brothers and sisters (the couple had no children). For some time before his death, Honigman had repeatedly told both friends and strangers, using obscene and abusive language, that his wife was unfaithful. Honigman was normal and rational in other respects, but by all evidence, his suspicions of his wife were untrue. They were based on such evidence as the fact that, when he left the house, his wife would ask him when he planned to return. Also, whenever the telephone rang, Mrs. Honigman answered it. For the last two years of his life, he positively forbade her to answer the telephone. Is Mr. Honigman's will valid

Answer 2

FH is a wealthy man and after forty years of marriage, he executed a new will which states that his wife will receive only a minimum amount of property and his brothers and sisters will receive the rest. This is because he does not trust his wife anymore.
In this case, the will made by FH will not stand as the wife is entitled to receive a better share of the property. As per the provisions of the law, she is entitled to receive at least half the share of the property held by FH. The wife can file a suit and she will be given her due share. Thus, the will written by FH will not stand in the court of law and the wife will get half the share of the property.

Question 3

Lauren, a resident of Kansas, appointed her husband to be her health care proxy.
Now that she is dying of cancer and suffering terribly, she is begging her husband and her doctors to give her an overdose of drugs. Which of the following statements is true
I) If she goes into a coma, her husband has the right to direct her doctors to withhold treatment.
II) Her doctor has the right to give her an overdose of pills that will kill her.
III) Her husband has the right to give her an overdose of pills that will kill her.
(a) I, II, and III
(b) Neither I, II, nor III
(c) Just I
(d) Just II
(e) Just III

Answer 3

Health Life proxy:
A health life proxy is one who can make a decision regarding an ailing patient for upkeep of the health of the patient.
• The health care proxy cannot give her an overdose of the pills himself to the patient because doing that will be like committing a murder.
• Her doctors cannot give her an overdose of the medication to put her to sleep without the consent of the health care proxy.
• In this question the option "A" is not correct because it believes that all the three options are the correct one's while options II and III are incorrect.
• In this question the option "B" is not correct because it believes that all the three options are not the correct answers while option I is the right answer.
• In this question the option "D" is not correct because her doctors cannot give her an overdose of the medication to put her to sleep without the consent of the health care proxy.
• In this question the option "E" is not correct because the health care proxy cannot give her an overdose of the medication himself to the patient because doing that will be like committing a murder.
In this question the right answer is the option "C" because being appointed as a health care proxy her husband can take the decisions by asking the doctors to stop the treatment as she is terminally ill and continuing the treatment will only prolong her misery.
Therefore, the correct option is

Question 4

Circle true or false:
T F A principal may not revoke a durable power of attorney.

Question 5

In the Paradee case, the trustees behaved very badly. Often, wrongdoers are able to convince themselves that they have not behaved badly because they rationalize what they have done. It is important in your own life to beware the easy rationalization. Imagine how Eleanor and Sterling might have rationalized their actions.

Question 6

The rules on wills are very exact. If the testator does not comply precisely, then the will is invalid. Suppose a man discovers that his daughter has broken virtually every law in this book-she has engaged in insider trading, price-fixing, and fraud, to name just a few. At his birthday party, the man says to the videographer, in front of 100 witnesses, "I have an appointment with my lawyer tomorrow. but in the meantime, you should know that I want all of my assets to go to the Home for Little Wanderers, the orphanage that raised me." On his way home that night, he dies in a car accident. Under his will, his daughter inherits all, and a court would undoubtedly enforce that will, despite all the evidence about the man's real wishes. Is that right Courts are often called upon to make difficult decisions about facts. In the case of disputed wills, why not let the courts decide what the decedent really wanted

Question 7

William Cook was a very successful undertaker. When he died, his will left all of his property to his brother Eugene. There were two other pieces of paper in the safe with the will. One said that that his stamp collection should go to his housekeeper, Bertha. This document was signed by two witnesses-the gardener and the cook. There was also a piece of paper stating that he would like all of his assets to go to his sister's daughter, Evangeline. Who will get what

Question 8

When Gregg died, his will left his money equally to his two children, Max and Alison. Max had died a few years earlier, leaving behind a widow and four children. Who will get Gregg's money

Question 9

CPA QUESTION A personal representative of an estate would breach her fiduciary duties if she:
(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 10

Blake tells his client that there are five good reasons to set up a trust. Which of the following is not a good reason
(a) To pay his grandchildren's college tuition if they go to the same college he attended
(b) To save money, since a trust is cheaper than a will
(c) To make sure the money is properly invested
(d) To avoid probate
(e) To safeguard his privacy

Question 11

Circle true or false:
T F Under the Uniform Probate Code, one spouse is not required to leave any money o the other spouse.

Question 12

Circle true or false:
T F A grantor may not be the trustee of a trust.

Question 13

Is an asset protection trust fair Should wealthy people be able to avoid paying their liabilities What about perpetual trusts that avoid estate taxes forever If you were a state legislator, how would you vote when this legislation came up for approval If you had substantial assets, would you put them in such a trust What Life Principles apply here

Question 14

Match the following terms with their definitions:

Question 15

Kevin Fitzgerald represented the down-and-out Mission Hill and Roxbury districts in the Massachusetts House of Representatives. A priest alerted him that Mary Guzelian, a street person who roamed his district, had trash bags in her ghetto apartment stuffed with cash, bonds, and bankbooks. Fitzgerald visited the apartment with his top aide, Patricia McDermott. Two weeks later, Guzelian signed a will, drafted by one of Fitzgerald's acquaintances, that left Guzelian's $400,000 estate to Fitzgerald and McDermott. Fitzgerald claimed not to know about the will until Guzelian's death four years later. Guzelian, 64, suffered from chronic paranoid schizophrenia and severe health problems. Would Guzelian's sister have a claim on Guzelian's estate

Question 16

Hallie is telling her cousin Anne about the will she has just executed. "Because of my broken arm, I couldn't sign my name, so I just told Bertrand, the lawyer, to sign it for me. Bertrand also witnessed the will." Anne said, "You made a big mistake:
I) You should have made at least some sort of mark on the paper."
II) The lawyer is not permitted to witness the will."
III) You did not have enough witnesses."
Which of Anne's statements is true
(a) I, II, and III
(b) Neither I, II, nor III
(c) Just I
(d) Just II
(e) Just III

Question 17

Circle true or false:
T F A holographic will does not need to be witnessed.

Question 18

Should you have a will Do you have one

Question 19

When Bill died, he left all of his property in a trust to take care of his wife, Doris, for the rest of her life. On her death, the money would go to their son, Rob. The Bank of Tulsa was the trustee. Fifty years later, Rob needed money, so he began writing checks out of Doris's checking account. She knew about the checks, but she could never say no to him. At the rate at which Rob was spending her money, the trust funds would all be gone within a couple of years. What was the bank's responsibility Was it obligated to let Doris have as much money as she wanted

Question 20

Owen does not want to leave any money to his son, Kevin. What must he do to achieve this goal
I) Nothing. If he dies without a will, Kevin will inherit nothing.
II) Make a will that omits Kevin entirely.
III) Leave Kevin $1 in his will.
(a) I, II, or III
(b) II or III
(c) Just I
(d) Just II
(e) Just III

Question 21

Circle true or false:
T F A nuncupative will does not need to be witnessed.