Deck 15: Preserving Your Estate

Question 1

Inflation is a common reason for estates to break up.

Answer 1

True

Question 2

People planning means providing sustenance and resources for family members.

Answer 2

False

Question 3

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

Answer 3

True

Question 4

Disability is a common reason for estates to break up.

Question 5

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

Question 6

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

Question 7

Minors can handle large sums of money and property.

Question 8

Unmarried and gay/lesbian couples can benefit from estate planning.

Question 9

Insufficient capital can cause problems paying estate taxes.

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

Your gross estate is composed only of nonprobate property.

Question 19

A potential estate planning problem is improper distribution of assets.

Question 20

Probate property includes only real property.

Question 21

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

Question 22

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

Question 23

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

Question 24

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

Question 25

The federal estate tax is similar from state to state.

Question 26

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

Question 27

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

Question 28

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

Question 29

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

Question 30

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

Question 31

A will is required by state law.

Question 32

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

Question 33

An accountant can help estimate transfer costs.

Question 34

A lay person can competently draft a will for a small estate.

Question 35

Dying intestate means dying with a valid will.

Question 36

Intestacy results from dying without a valid will.

Question 37

Only the wealthy need an attorney to prepare their wills.

Question 38

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

Question 39

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

Question 40

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

Question 41

The best choice for a trustee is a family member.

Question 42

A valid will cannot be contested.

Question 43

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

Question 44

A letter of last instruction is a legal document.

Question 45

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

Question 46

Mental capacity requires an individual to be at least 21.

Question 47

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 48

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

Question 49

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

Question 50

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

Question 51

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

Question 52

Death will erase any debts existing at that time.

Question 53

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

Question 54

A will can be destroyed after a codicil is written.

Question 55

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

Question 56

In a community property state,income earned by a husband belongs equally to his wife.

Question 57

Witnesses to a will may not be family members.

Question 58

A trust is a means of transferring property.

Question 59

All living trusts are revocable.

Question 60

A testamentary trust is established in a will.

Question 61

An executor plays an important function during the probate process.

Question 62

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 63

Gift giving can reduce estate tax liability.

Question 64

The taxable estate is less than the adjusted gross estate.

Question 65

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 66

The goal of estate planning is to:

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

Question 67

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 68

Inheritance tax is the same as estate tax.

Question 69

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 70

All of the following are parts of estate planning except:

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

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

Question 72

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

Question 73

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 74

AARP says that almost ____ individuals have not discussed end of life issues with family members

A) 1/3
B) 100%
C) 2/3
D) 1/8
E) None

Question 75

____ 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 76

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

Question 77

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

Question 78

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

Question 79

____ 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 80

All property in a community property state is owned Tenants in Common.