Question 1

Adam has two children,Bob (the eldest)and Carol,both of whom predecease Adam. Bob is survived by a daughter,Dina,and Carol by two sons,Ed and Fred. On Adam's death,if the estate is distributed per stirpes

Accepted Answer

Per stirpes means that each branch of the family receives an equal share based on their deceased parent's share. In this case, Bob and Carol are both deceased, so their shares are split between their children.

Bob's share goes to his daughter Dina, and Carol's share is split between her sons Ed and Fred. Therefore, Dina will receive one-half of the estate, and Ed and Fred will each receive one-fourth.

Question 2

Ruth executes a will naming her nephew Stan as sole beneficiary. Two years later,Ruth executes another will,naming her niece Tammy as sole beneficiary. On Ruth's death

Accepted Answer

The later will naming Tammy as the sole beneficiary revokes the previous will naming Stan as the sole beneficiary. Therefore, Tammy will be the sole heir.

Question 3

Graham's will leaves $100,000 to his two children,Harry and Ida. When Graham dies,he only has $80,000 to honor his bequests. Harry and Ida each receive $40,000. This is

Accepted Answer

An abatement occurs when there is not enough money or assets to fully honor all bequests made in a will. In this scenario, Graham's estate did not have enough funds to give each child their full bequest of $50,000, so the bequests were reduced proportionally, resulting in each child receiving $40,000. This is an example of abatement.

Question 4

Gus dies intestate. The debts of the estate are paid by Gus's

Accepted Answer

When someone dies intestate, meaning without a valid will, their estate is distributed according to the laws of intestacy in their state. Before any assets can be distributed to heirs, the debts of the estate must be paid off. Therefore, the debts are paid by the estate before its assets are distributed.

Question 5

Maya dies without a will. The distribution of Maya's estate is prescribed by

Accepted Answer

Intestacy laws determine how the estate of a person who dies without a will is distributed. These laws vary by state and generally dictate that the deceased's closest relatives inherit the estate.

Question 6

Ralph creates a trust by his will for the benefit of Stella and her family to come into existence on Ralph's death. This is

Accepted Answer

The trust is created through a will, which means it is a testamentary trust.

Question 7

Estimable Credit Company loans funds to Farmland Granaries,LLC,to buy a silo. Estimable obtains an insurance policy from Grangers Insurance,Inc.,to cover the silo. Farmland also obtains a policy from Grangers to cover the silo. Later,Farmland sells the silo to Hi-Yield Harvest Company but keeps the policy. Hi-Yield also obtains a policy from Grangers to cover the silo. Estimable agrees to finance Hi-Yield's purchase of the property. A fire totally destroys the silo. Who can recover for the loss?

Accepted Answer

The answer of Estimable Credit Company loans funds to Farmland...

Question 8

For Melinda's will to be valid,she must be mentally competent at the time of

Accepted Answer

For a will to be valid, the person making it must have testamentary capacity or be mentally competent at the time of making the will. The other options (A, B, and D) do not pertain to the mental capacity of the person making the will.

Question 9

Ann and Burt are partners in Delta Associates. Burt takes advantage of a partnership opportunity for personal gain that causes Delta's business to suffer. A court orders Burt to hold the profits in trust for the partnership. This is

Accepted Answer

This is a constructive trust because the court is ordering Burt to hold the profits in trust for the partnership. A constructive trust is created by a court to prevent unjust enrichment and requires the person who benefited from the unjust conduct to hold the profits in trust for the harmed party.

Question 10

Edie holds title to Floyd's property under circumstances that,although nothing is express,indicate this is apparently only for Floyd's benefit. This is

Accepted Answer

The circumstances described suggest that Edie may hold the property in a resulting trust for Floyd's benefit, meaning that Floyd is the true owner of the property, while Edie holds legal title as a trustee. This can arise in situations where it was not the parties' explicit intention to create a trust, but the facts and circumstances suggest that the transfer of legal title was intended to be for the benefit of someone else. An illegal trust would be one that violates some law or public policy, a living trust is created during the trust settlor's lifetime, and a testamentary trust is created in a will.

Question 11

Aron owns a certificate of deposit with Beth,his sister,and an apartment building with Carl,his brother,in both cases as a joint tenant. Aron,a partner with Debra in Aron & Debra Accountants,obtains a life insurance policy with Debra as the designated beneficiary. Aron writes a will that gives particular items of personal property,as well as specific amounts of cash,to his children and his friends. The will leaves the residue of the estate to Eve,Aaron's favorite cousin. Carl dies. Aron,on his deathbed,makes a gift to the United Way. Will the certificate of deposit,the apartment building,the proceeds from the life insurance policy,and the gift to the United Way become part of Aron's estate and be distributed under the will? If not,how will these items be distributed and to whom?

Accepted Answer

The answer of Aron owns a certificate of deposit with...

Question 12

The owners of Designer Apps,Inc.,want to execute wills. Eve is fifteen years old,Fran is seventeen,and Gail is nineteen. In most states,those with the capacity to execute a will are

Accepted Answer

In most states, the legal age to execute a will is 18. Therefore, only Gail, who is 19 years old, has the capacity to execute a will. Eve and Fran are not legally capable of executing a will.

Quiz 43: Insurance, wills, and Trusts

Adam has two children,Bob (the eldest) and Carol,both of whom predecease Adam. Bob is survived by a daughter,Dina,and Carol by two sons,Ed and Fred. On Adam's death,if the estate is distributed per stirpes