Deck 15: Estate Planning

Question 1

A handwritten will is called a(n):

A) formal will.
B) holographic will.
C) statutory will.
D) letter of last instruction.
E) informal will.

Answer 1

holographic will.

Question 2

Estate planning involves

A) handling 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) handling your property while you are alive; planning how your property will be distributed after your death; and planning your family's financial security in the event of your death or your spouse's death are all part of estate planning.

Answer 2

handling your property while you are alive; planning how your property will be distributed after your death; and planning your family's financial security in the event of your death or your spouse's death are all part of estate planning.

Question 3

Which of these statements is false? Provincial family law _______________,

A) varies across Canada.
B) can have a significant impact on your estate planning.
C) might impact your capacity to order the disposal of your estate.
D) does not permit your will to be contested.
E) does not obligate the deceased to provide for family members who were not financial dependents at the time of death.

Answer 3

does not permit your will to be contested.

Question 4

A person who will follow your instructions specified in your will is called a(n)

A) beneficiary.
B) trustor.
C) witness.
D) executor or executrix.
E) codicil.

Question 5

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) Ensuring your retirement plan is complete.

Question 6

Which one of the following statements is correct?

A) A large percentage of people do little or nothing to provide for those who will survive them.
B) Most people do plan their estates.
C) Most people think that they will live forever.
D) Most people don't worry about estate planning until they are 65.
E) Estate planning is mandatory in some provinces.

Question 7

If you are married, your estate planning involves

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

Question 8

Estate planning has two parts. The first part consists of

A) deciding on who is going to get what.
B) transferring your estate in the manner you have specified.
C) building your estate through savings, investments, and insurance.
D) evaluating your assets and liabilities.
E) Meeting your financial planner.

Question 9

If you die without a valid will, you die

A) intestate.
B) in peace.
C) in trust.
D) prenuptially.
E) in turmoil.

Question 10

A will is:

A) a legal arrangement through which your assets are held by someone.
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) the legal declaration of a person's mind as to the disposition of his or her property after his or her death.

Question 11

Upon your death, your beneficiary will meet people who offer specific types of assistance. These people will probably be:

A) strangers.
B) sympathetic.
C) courteous.
D) disinterested.
E) Your beneficiary will meet people, some of whom will be strangers, who are sympathetic, courteous and disinterested.

Question 12

Which document explains, adds, or deletes provisions in your existing will?

A) codicil
B) tracer
C) addendum
D) rider
E) bank statement

Question 13

Which 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 a considerable estate needs a will.
D) Every adult needs a will.
E) Only senior citizens need a will.

Question 14

In estate planning, if you are married:

A) you don't need much estate planning.
B) your estate planning is rather easy.
C) only your spouse should be concerned about estate planning.
D) your situation becomes more complex, and the need for orderliness and clarity becomes greater.
E) your will takes care of most of estate planning problems.

Question 15

Which type of will is usually prepared with an attorney's assistance?

A) informal will
B) formal will
C) holographic will
D) letter of last instruction
E) trustor's will

Question 16

If you die without a valid will,

A) the government confiscates your property.
B) the federal court decides how the property should be distributed.
C) your relatives or friends will get the property.
D) your local custom will determine how the property is distributed.
E) the province's law of descent and distribution becomes your will.

Question 17

You should review your will if:

A) you move to a different province.
B) you have sold property mentioned in the will.
C) the size and composition of your estate has changed.
D) you have married, divorced, or remarried.
E) moving to a different province; selling property; changes to the size of one's estate; and marrying, divorcing, or remarrying are all good reasons to review your will.

Question 18

Which will should not be witnessed?

A) informal will
B) letter of last instruction
C) formal will
D) statutory will
E) holographic will

Question 19

The legal procedure of proving a valid or invalid will is called a _________________

A) lawsuit
B) trust
C) probate
D) rider
E) codicil

Question 20

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

A) Many people don't give a single thought to preparing for death.
B) It is always easy to plan for your family's financial security in the event of your death.
C) Most people do a lot to provide for those who will survive them.
D) Most people give meticulous attention to estate planning.
E) Estate planning is for the rich only

Question 21

In a basic will the clause that directs specific cash amounts to be paid is the ____________

A) identification and revocation clause
B) specific bequests clause
C) legacies clause
D) power clause
E) testimonium and attestation clause

Question 22

A legal document authorizing someone to act on your behalf is called a

A) codicil.
B) rider.
C) power of attorney.
D) trustor.
E) proxy.

Question 23

In a basic will the clause that is used in a trust when you want the trustee to be able to give the life tenant or a capital beneficiary additional funds for special circumstances or needs is the ____________

A) identification and revocation clause
B) specific bequests clause
C) legacies clause
D) encroachment clause
E) testimonium and attestation clause

Question 24

What percentage of adults age 50 and older do not have a will?

A) None. You legally must have a will in Canada.
B) One percent.
C) Ten percent.
D) Forty percent.
E) Eighty percent.

Question 25

Under what type of ownership is the property considered owned 50-50 for estate tax purposes and passed automatically to your spouse at your death?

A) tenants in common
B) tenancy by the entirety
C) joint tenancy
D) tenancy by default
E) tenants by birth

Question 26

In a basic will these clauses are found at the end of your will. They ensure the legal requirements for a validly executed will are met.

A) identification and revocation clauses
B) specific bequests clauses
C) legacies clauses
D) encroachment clauses
E) testimonium and attestation clauses

Question 27

A legal arrangement through which your assets are held by a trustee for your benefit or that of your beneficiaries is called a

A) codicil.
B) power of attorney.
C) proxy.
D) rider.
E) trust.

Question 28

In a basic will the clause that enables your executor to exercise various powers in the management of your estate without the approval of the court is the ____________

A) identification and revocation clause
B) specific bequests clause
C) legacies clause
D) power clause
E) testimonium and attestation clause

Question 29

A documentary agreement between spouses before marriage in which one or both parties often waive a right to receive property under the other's will or under state law is called a:

A) letter of last instruction.
B) codicil.
C) prenuptial agreement.
D) postnuptial agreement.
E) marital share will.

Question 30

In a basic will the clause that outlines the distribution of specific personal property, such as furniture, jewellery, cars, RRSPs, RRIFs, and pensions is the __________________

A) identification and revocation clause
B) specific bequests clause
C) legacies clause
D) power clause
E) testimonium and attestation clause

Question 31

The least important characteristic of an executor is

A) reliable
B) trustworthy,
C) responsible
D) organized
E) a family member

Question 32

A trust established by your will that becomes effective upon your death is called a(n) ____________ trust.

A) testamentary
B) living
C) general
D) formal
E) insurance

Question 33

A ______________ describes the legal directives each province sanctions with respect to your medical care wishes, should you become unable to communicate them

A) formal will
B) holographic will
C) legacies clause
D) living will
E) testimonium and attestation clauses

Question 34

A person who assumes the responsibilities of providing the children with personal care and managing the estate for them is called a(n):

A) beneficiary.
B) executor.
C) trustee.
D) guardian.
E) executrix.

Question 35

Which of the following is not a potential tax that may be incurred at death?

A) income tax due to deemed disposition rules
B) provincial probate taxes
C) estate taxes
D) U.S. estate taxes on U.S. assets
E) Canadian estate taxes on U.S. assets

Question 36

At death, it is necessary to _____________.

A) to file a final (terminal) tax return.
B) pay estate taxes in Canada.
C) report only the earned income of the deceased up to the date of death.
D) report only the partial value of any registered assets.
E) ensure your survivors have money.

Question 37

A person or institution that holds or generally manages property for the benefit of someone else under a trust agreement is called a(n)

A) beneficiary.
B) executor.
C) trustee.
D) guardian.
E) executrix.

Question 38

In what type of ownership is each individual considered to own a proportionate share for tax purposes with only your share being included in your estate?

A) tenancy by default
B) tenancy by the entirety
C) tenancy in common
D) joint tenancy
E) tenants by birth

Question 39

In a basic will the clause that identifies you and your residence and declares that this is your last will, which revokes all prior wills is the ___________________

A) identification and revocation clause
B) specific bequests clause
C) legacies clause
D) power clause
E) testimonium and attestation clause

Question 40

A(n) ____________ trust is a property management arrangement that you establish while you are alive.

A) guardian
B) testamentary
C) living
D) power of attorney
E) estate

Question 41

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

Question 42

Many people don't give a single thought to preparing for death.

Question 43

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 44

A ______________ describes the legal directives each province sanctions with respect to your medical care wishes, should you become unable to communicate them

A) formal will
B) holographic will
C) legacies clause
D) living will
E) testimonium and attestation clauses

Question 45

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

Question 46

An ethical will is

A) not a legally binding document, however it can help with estate planning.
B) also called a holographic will.
C) part of a formal will.
D) also called an intestate will.
E) a legally binding document.

Question 47

A living will _______________

A) is a legal term in Canada
B) is also called a holographic will
C) is part of a formal will
D) is also called an ethical will
E) should be signed by witnesses

Question 48

Never having been married does not eliminate the need to organize your papers.

Question 49

It is not necessary for every adult to have a written will.

Question 50

Estate planning is not an essential part of retirement planning.

Question 51

Your estate consists of everything you own.

Question 52

It is always easy to plan for your family's financial security in the event of your death.

Question 53

This chapter on estate planning provides all the answers to estate planning questions.

Question 54

Every adult should have a written will.

Question 55

A living will _______________

A) is not a legal term in Canada
B) is also called a holographic will
C) is part of a formal will
D) is also called an ethical will
E) should not be signed by witnesses

Question 56

Under provincial family law, getting married does not usually void a will made prior to the wedding.

Question 57

Canadians are considering pre-planned funeral arrangements are part of their estate planning.

Question 58

A will is a way to transfer your property according to your wishes after you die.

Question 59

Estate planning is not a definite plan for the administration and disposition of one's property during one's lifetime and at one's death.

Question 60

Estate planning is useful only to rich and elderly people.

Question 61

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

Question 62

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.

Question 63

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

Question 64

Even if your assets such as life insurance, annuities, or RRSPs already have a named beneficiary, they will not be transferred independently of your will.

Question 65

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

Question 66

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

Question 67

A formal will creates lower overall taxation.

Question 68

If you die without a will, you die intestate.

Question 69

A formal will leaves one half of your adjusted gross estate to your spouse.

Question 70

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

Question 71

A holographic will should be witnessed by at least two persons.

Question 72

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

Question 73

In the year of death, the estate's executor must file a final (terminal) tax return.

Question 74

You can structure charitable gift giving both during your lifetime and in your will to further your estate planning goals and make the most of available tax credits.

Question 75

A trustee is a person who assumes the responsibilities of providing the children with personal care and of managing the estate for them.

Question 76

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

Question 77

Changes to your marital status can affect the validity of your will.

Question 78

The creator of the trust is called the settlor or grantor.

Question 79

A spousal trust can be classified as either an inter vivos trust or a testamentary trust.

Question 80

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