Deck 19: Estate Planning

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

False

Question 4

Estate planning is not an essential part of retirement planning.

Question 5

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

Question 6

Unmarried couples face formidable retirement and estate planning challenges.

Question 7

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

Question 8

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

Question 9

Estate planning is an integral part of financial planning.

Question 10

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

Question 11

Millions of nontraditional households have unique estate planning problems.

Question 12

Most people cannot afford the expense of setting up trusts.

Question 13

If you never married, you don't need to organize your personal and financial documents.

Question 14

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

Question 15

Every adult should have a written will.

Question 16

Estate planning is useful only to rich and elderly people.

Question 17

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

Question 18

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

Question 19

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

Question 20

Many people do little, if any, estate planning.

Question 21

Your executor can be a family member, a friend, an attorney, an accountant, or the trust department of a bank.

Question 22

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

Question 23

Under the traditional marital share will, half of your estate is taxed at your death and half at your spouse's death.

Question 24

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

Question 25

A statutory will is one type of formal will.

Question 26

A simple will is sufficient for most smaller estates.

Question 27

A living trust does not avoid probate but it is less expensive, quicker, and private.

Question 28

A simple will creates lower overall taxation for all individuals.

Question 29

A will in which everything passes to the spouse except the exemption amount is called the exemption trust will.

Question 30

A simple will, or I love you will, leaves everything to the spouse.

Question 31

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

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

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

Question 34

The stated dollar amount will allow you to pass on to your spouse any amount that satisfies your family objectives.

Question 35

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

Question 36

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

Question 37

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

Question 38

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

Question 39

One of the advantages of a living trust is that property held in it avoids probate at your death.

Question 40

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

Question 41

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 42

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

Question 43

A formal will is usually prepared with an attorney's assistance.

Question 44

Joint ownership is a good substitute for a will.

Question 45

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

Question 46

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

Question 47

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

Question 48

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

Question 49

A power of attorney is a legal document authorizing someone to act on your behalf.

Question 50

In a revocable trust, you forfeit the right to end the trust or change its terms during your lifetime.

Question 51

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

Question 52

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

Question 53

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

Question 54

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

Question 55

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

Question 56

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

Question 57

Most states do not recognize living wills.

Question 58

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

Question 59

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

Question 60

A living or inter vivos trust is a property management arrangement that you establish while you are alive.

Question 61

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

A) building your estate through savings, investments, and insurance.
B) transferring your estate 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 62

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 meticulous attention to estate planning.
E) Many people do little to financially prepare for death.

Question 63

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) Unmarried couples have less need for estate planning than married couples.
D) Unmarried couples face formidable retirement and estate planning challenges.
E) All of these are true about unmarried couples.

Question 64

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

Question 65

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) Providing for your family's financial security after you die
E) All of these are part of estate planning.

Question 66

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 67

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

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

Question 68

According to a recent American Association of Retired Persons (AARP) survey, over 40 percent of Americans age 45 or older have not drawn up a will.

Question 69

An estate tax is a federal tax levied on the right of a deceased person to transmit his or her property and life insurance at death.

Question 70

If you are married, your estate planning involves:

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

Question 71

Which one of the following statements is correct?

A) Estate planning frequently involves the use of life insurance.
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 72

A testamentary trust is a trust established by your will that becomes effective upon your death.

Question 73

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

Question 74

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 75

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 76

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 77

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

Question 78

Estate planning involves which of the following?

A) Managing your property while you are alive
B) Dealing with what happens to your property after your death
C) Your family's financial security in the event of your death
D) Your family's financial security in the event of your spouse's death
E) All of these are actions involved in estate planning.

Question 79

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

Question 80

An inheritance tax is levied on the right of an heir to receive all or part of the estate and life insurance proceeds of a deceased person.