Deck 16: Retirement and Estate Planning - Estate Planning

Question 1

The only reason for having a valid will is to have your estate distributed according to your plans.

Answer 1

False

Question 2

The residue of an estate is the amount of assets you own before taxes.

Answer 2

False

Question 3

If you have a child, your will is cancelled on the date of his or her birth.

Answer 3

False

Question 4

To create a will, a person must be of legal age, be mentally competent, and not be subject to undue influence or threats by others.

Question 5

With samples of valid wills being available on websites and in bookstores, it is not recommended that a person incur the additional expense of hiring a lawyer to write a will.

Question 6

If you die intestate, everyone will still receive the same share as you intended.

Question 7

The administrator of a will essentially takes over ownership of the deceased assets in order to distribute them to the beneficiaries.

Question 8

If you get married, your will is cancelled (except in Quebec).

Question 9

Since the settling of wills is straightforward, almost anyone can do a good job as an executor of an estate.

Question 10

If you die intestate, your surviving spouse or child will become executor of your assets.

Question 11

A preferential share claimed by a spouse may limit the amount granted to other beneficiaries.

Question 12

Estate planning is the act of planning before death how your wealth will be allocated upon your death.

Question 13

To be valid, an English form will must be dated, signed, and witnessed.

Question 14

Once you have a positive net worth to be distributed upon your death, you should consider creating a will.

Question 15

If you are involved in a common-law relationship, you will still be entitled to a preferential share.

Question 16

Even a parent without significant net worth needs a will to appoint a guardian for children.

Question 17

A holograph will needs to be in the handwriting of the testator.

Question 18

If a person dies without a valid will, the court will appoint an administrator, which results in additional costs being imposed on the estate.

Question 19

Two key goals of estate planning are to ensure that your assets pass to the proper beneficiaries and to ensure that taxes paid are minimized.

Question 20

An estate represents a deceased person's assets after all debts are paid.

Question 21

Any money donated from an estate to charitable organizations is given after estate taxes are paid.

Question 22

A revocable living trust is one that cannot be changed during a person's lifetime.

Question 23

Estate planning commonly involves trusts, gifts, and charitable contributions for the purpose of avoiding taxes.

Question 24

Prince Edward Island has preferential share for spouses.

Question 25

A trust involves the transfer of assets to a third party who manages these assets for a beneficiary.

Question 26

On death you are deemed to have disposed of all assets, thereby triggering taxes.

Question 27

By using a revocable trust, you can avoid the probate process.

Question 28

The document that describes funeral preferences and indicates where key financial records are kept is called the letter of last rites.

Question 29

Probate is the legal process that ensures that assets are distributed and guardians of children are appointed as the person who died wished it.

Question 30

Granting a durable power of attorney allows the authorized individual to overrule health care facilities' decisions about your health.

Question 31

RRSPs can be rolled over to any beneficiary without being subject to tax.

Question 32

In the year of death, a final tax return must be filed with Canada Revenue Agency to report losses and gains on investments and final amounts of employment income.

Question 33

A living will is a simple legal document in which individuals specify their preferences if they become mentally or physically disabled.

Question 34

An inter vivos trust immediately comes into force on death.

Question 35

If two wills are later found to exist, the will with the most recent date will be the invalid will.

Question 36

There will be no tax on capital property held jointly with a surviving spouse.

Question 37

If you die intestate, the police department will appoint a person to distribute your estate.

Question 38

Powers of attorney are the part of the will that gives authority to another person should you become incapacitated.

Question 39

Minor changes to a will can be made with a simple document called a codicil.

Question 40

If you have a will and pass away, it means that you die intestate.

Question 41

A will would not be valid if

A)the estate is small.
B)there is only one child.
C)the person just remarried.
D)the entire estate is to go to the spouse.

Question 42

The primary purpose of a preferential share is to

A)give each former spouse a share of the assets in the case of multiple marriages.
B)provide for the appropriate distribution of matrimonial property.
C)give all assets to the surviving spouse.
D)divide assets between the spouse and progeny.

Question 43

Which of the following is necessary for an English form will to be valid?

A)All heirs must agree to the terms of the will.
B)The will must be dated in the three years prior to death.
C)The will must be signed by the testator and two witnesses.
D)The person writing the will must be over age 21 at the time the will is written.

Question 44

In many cases, the executor and the trustee is the same individual.

Question 45

A holographic will must

A)be prepared by legal counsel.
B)be prepared by a lawyer.
C)be written solely in the handwriting of the testator.
D)be witnessed by a notary or lawyer.

Question 46

There may be a need to distribute half of the estate to the spouse and the other half to any other beneficiaries due to

A)intestacy law.
B)the wills variation Act.
C)preferential marital share.
D)consanguinity.

Question 47

The minimum age to create a valid will is 16 years.

Question 48

Assign a guardian to care for the minor children and manage any estate left to them.

Question 49

The first clause in a will

A)appoints the executor.
B)identifies the beneficiaries.
C)appoints the administrator.
D)identifies the deceased.

Question 50

A notarial will is a formal type of will that is commonly used in Manitoba.

Question 51

An alter ego trust contains both assets and liabilities that have not been subject to immediate deemed disposition.

Question 52

The practice of planning how wealth will be allocated on or before your death is

A)asset allocation.
B)estate planning.
C)intestacy planning.
D)will planning.

Question 53

If you die intestate, it means that you die without a will.

Question 54

The most common type of will in Canada is the notarial will.

Question 55

A legal document specifying distribution of your assets upon death is a

A)tax return.
B)letter of last instruction.
C)will.
D)trust.

Question 56

A living will is a health care directive for individuals to specify their preferences if they become mentally or physically disabled.

Question 57

If a person dies and two wills are discovered in the safety deposit box,

A)there is a complicated legal process to determine the valid will.
B)the will with the most recent date will be the valid will.
C)the earliest dated will is valid.
D)the courts will determine the valid will.

Question 58

Which of the following is not a reason to have a will?

A)To distribute your assets as you wish
B)To avoid paying any estate taxes
C)To reduce the costs being imposed on the estate
D)To appoint a legal guardian for children

Question 59

A testamentary trust is, somehow, similar to the inter vivos trust.

Question 60

A handwritten will is called an English form will.

Question 61

Which of the following is the first duty of an executor settling an estate?

A)Make funeral arrangements
B)Locate and obtain control of the deceased's assets
C)Calculate the preferential share
D)Notify all beneficiaries

Question 62

An executor may be able to file more than one tax return for the deceased

A)when the first return was not filed on time.
B)when a business was sold just prior to death.
C)if the estate received a life insurance policy.
D)when rights or things are still owed to the deceased at death.

Question 63

You are recently divorced and have relocated to another province. To make substantial changes to your will, you should

A)prepare a new letter of last instruction.
B)prepare a codicil.
C)prepare a new will.
D)have your existing will notarized in the new province.

Question 64

The final tax return must be filed

A)immediately after the estate is settled.
B)by December 31 in the year of death.
C)in six months or before April 30 of the year following death, whichever is later.
D)as soon as the last asset is distributed.

Question 65

Which of the following is the start of the probate process?

A)Payment of claims against the estate
B)The validation of the will
C)Determination of legal heirs
D)Filing the will and probate form with the court

Question 66

If no named executor is able to perform the appointed tasks,

A)the surviving spouse would take over.
B)the courts would appoint an administrator.
C)the next of kin completes the duties.
D)the will becomes invalid.

Question 67

At the death of an annuitant, their RRSPs may be

A)rolled over to a spouse if they are registered jointly.
B)rolled over to a spouse with no tax consequences.
C)rolled over to the closest surviving relative with no tax consequences.
D)rolled over to a registered charity with no tax consequences.

Question 68

A document that specifies changes to an existing will is

A)a letter of instruction.
B)a codicil.
C)an amendment.
D)an addendum.

Question 69

Which of the following is true regarding the evaluation of a deceased's estate for probate purposes?

A)All capital assets are listed and valued as of the date of death.
B)All registered assets must be sold and held in liquid securities.
C)Probate fees are similar in each Province.
D)The value of your home is never included in probate.

Question 70

An executor is also called a(n)

A)personal representative.
B)settlor.
C)administrator.
D)trustee.

Question 71

If your spouse has predeceased you, RRSPs

A)can pass to registered charities with no tax liability.
B)are fully taxable.
C)can pass to a dependent child with no tax liability.
D)are taxed as capital gains.

Question 72

If you wish to be cremated when you die, this request should be included in a

A)notarial will.
B)letter of last instruction.
C)codicil.
D)probate statement.

Question 73

If you die without a will, the court will appoint

A)a grantor.
B)an attorney.
C)an administrator.
D)a settlor.

Question 74

Which of the following statements about the letter of last instruction is correct?

A)It should provide changes you wanted made to the will.
B)It should provide the calculation of the preferential share.
C)It should provide the desired funeral arrangements.
D)It should declare your intention to create an inter vivos trust.

Question 75

The reason you may want to execute a codicil to your existing will is

A)to add alternate executors.
B)you remarried.
C)you moved to a different province.
D)the birth of a child.

Question 76

Who is the person who carries out the instructions in the will?

A)The settlor
B)The executor
C)The testator
D)The notary

Question 77

The value of the estate is calculated using

A)cost.
B)fair market value.
C)cost plus inflation.
D)the consumer price index.

Question 78

An executor may

A)account for newborn children if not included as beneficiaries.
B)arbitrarily calculate the preferential share.
C)be a beneficiary of the will.
D)determine the value for the assets.

Question 79

In choosing a guardian for your children, you should

A)ensure he or she is also prepared to be the custodian.
B)be sure to include this in the last letter of instruction.
C)ensure that the person you select is willing to serve in this capacity.
D)authorize this in a power of attorney.

Question 80

The purpose of probate is to ensure the

A)will is valid to and help provide an orderly distribution of assets.
B)orderly distribution of liabilities.
C)province collects the requisite estate tax revenue.
D)fair jurisprudence of all financial matters.