Question 1

what is true about estate planning?

Accepted Answer

Many people do little to financially prepare for death.

Question 2

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

Accepted Answer

building your estate through savings, investments, and insurance.

Question 3

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

Accepted Answer

transferring your estate in the manner you have specified.

Question 4

what are different parts of estate planning?

Accepted Answer

Making a will Setting up a trust Accumulating funds for your future Providing for your family\'s financial security after you die

Question 5

Gerry Legere has died without writing a will. What is the legal term for this?

Accepted Answer

intestate

Question 6

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?

Accepted Answer

estate

Question 7

Joseph Vu has assets worth $1,200,000. He has written a legal document that specifies that these assets be divided equally between his wife and his two sons upon his death. What is this legal document?

Accepted Answer

will

Question 8

Grady Perdue has assets worth $1,500,000 and has written a legal document that specifies that all of his money go to his children. After he dies, there is a legal process to determine whether his document specifying how his assets be divided is valid. This is also the legal process by which his executor manages and distributes his property. What is this legal process called?

Accepted Answer

probate

Question 9

What is a will?

Accepted Answer

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

Question 10

If you die without a valid will:

Accepted Answer

your state\'s law of descent and distribution becomes your will.

Question 11

Which one of the following wills leaves everything to your spouse?

Accepted Answer

simple

Question 12

Which will is sufficient for most smaller estates?

Accepted Answer

simple

Question 13

Which one of the following wills automatically leaves one-half of your adjusted gross estate to your spouse?

Accepted Answer

traditional marital share

Question 14

Under what type of will is half of your estate taxed at your death and half at your spouse\'s death?

Accepted Answer

traditional marital share

Question 15

Under what type of will does everything pass to your spouse, with the exception of an amount equal to the exemption, which passes into trust?

Accepted Answer

exemption trust

Question 16

Which type of will allows you to pass to your spouse any amount that satisfies your family objective?

Accepted Answer

state dollar amount

Question 17

Which will should be written, dated, and signed entirely in your own handwriting?

Accepted Answer

holographic

Question 18

Which will should be written, dated, and signed entirely in your own handwriting?`

Accepted Answer

formal will

Question 19

Which type of will involves serious risks of invalidity and may not reflect the provisions of current law?

Accepted Answer

statutory

Question 20

A person who will follow your carry out the instructions specified in your will is called a(n):

Accepted Answer

executor or executrix

Question 21

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

Accepted Answer

Codicil

Question 22

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:

Accepted Answer

prenuptial agreement.

Question 23

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

Accepted Answer

guardian

Question 24

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

Accepted Answer

trustee

Question 25

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

Accepted Answer

power of attorney

Question 26

Benjamin Wiley is married and has assets totaling $7 million. What type of will would most likely result in the lowest overall amount of federal estate taxes? Assume the exemption amount is $3 million.

Accepted Answer

traditional marital share

Question 27

Matthew Miller has created a will and left everything to his wife Kate. What type of will has he created?

Accepted Answer

simple

Question 28

Kate Wilson has created a will that leaves one-half of her adjusted gross estate to her husband, Matthew. What type of will has she created?

Accepted Answer

traditional marital share

Question 29

Will Jones has created a will that leaves everything to his wife except an exemption amount of $2 million. This exemption amount passes into a trust. What type of will has Will created?

Accepted Answer

exemption trust

Question 30

James Fitzwater has created a will that leaves exactly $2 million to his wife. What type of will has James created?

Accepted Answer

stated dollar amount

Question 31

Brenda Johnson has used a preprinted form that she got from the internet to create her will. However, she was unhappy with one section of the will and crossed out the parts she didn\'t like and hand wrote the changes she wanted. The changes that she made most likely made her will:

Accepted Answer

invalid

Question 32

Benjamin Barry has been named by Andie Anderson to follow her instructions and distribute her assets as she has designated in her will, pay any bills, and collect any money owed to her. To which position has Benjamin been named?

Accepted Answer

executor

Question 33

Hugh Bowersox been selected by Sandra Tyler to assume the responsibility of raising her children and managing her estate for those children if she were to die. In what capacity would Hugh be acting?

Accepted Answer

Guardian

Question 34

Lucy Kelson has been selected to manage the assets of Rodney Peterson until he reaches the age of 30. Rodney is currently 21. In what capacity would Lucy be acting?

Accepted Answer

Trustee

Question 35

George Wade has been selected to receive the assets of his brother Kyle in the event of Kyle\'s death. What is George?

Accepted Answer

Beneficiary

Question 36

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

Accepted Answer

trust

Question 37

If you establish a(n) ____________ trust, you retain the right to end the trust or change its terms.

Accepted Answer

revocable

Question 38

If you establish a(n) ____________ trust, you cannot change its terms or end it.

Accepted Answer

irrevocable

Question 39

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

Accepted Answer

living

Question 40

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

Accepted Answer

testamentary

Question 41

In what type of joint ownership may neither spouse sell the property without the consent of the other?

Accepted Answer

Tenancy by the entirety

Question 42

A surgeon who will soon finish paying off college loans might want to set up a(n):

Accepted Answer

disclaimer trust

Question 43

Gary Ruhle has assets worth $2,400,000. Since he plans to travel and does not want to oversee these assets, he has created a legal arrangement so the assets can be managed by an officer of his local bank. What type of legal arrangement has he most likely made?

Accepted Answer

trust agreement

Question 44

Sally Forth has a trust that she can end at any time she wants. What type of trust does Sally have?

Accepted Answer

Revocable trust

Question 45

A federal tax levied on the right of a deceased person to transmit his or her property and life insurance at death is called a(n) ____________ tax.

Accepted Answer

estate

Question 46

A state tax levied on the right of an heir to receive all or part of the estate and life insurance proceeds of a deceased person is called a(n) ____________ tax.

Accepted Answer

inheritance

Question 47

A federal and state tax levied on the privilege of making gifts to others is called a(n) ____________ tax.

Accepted Answer

gift

Question 48

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. He still owes $125,000 on his mortgage and $5,000 on a car loan. The probate and administration costs of his estate are estimated at $5,000. What is his estimated net taxable estate?

Accepted Answer

$755,000

Question 49

Advance directives are legal documents that allow you to state what kind of health care you want if you were too ill to speak for yourself. Advance directives most often include which of the following?

Accepted Answer

Advance directives include all of these provisions.

Question 50

George Smith worries that his deteriorating health is going to make it difficult for him to conduct his day-to-day business. He wants to grant his nephew, Brandon Smith, the ability to act on his behalf. To do this, what document would he most likely need?

Accepted Answer

Durable power of attorney

Question 51

Which of the following would keep you from being an executor of a will?

Accepted Answer

Being 16 years of age

Question 52

Which of the following would keep you from being an executor of a will?

Accepted Answer

Having been convicted of a felony

Question 53

The American Taxpayer Relief Act of 2012 provides a permanent gift and estate tax exemption of how much for individuals?

Accepted Answer

$5.25 million

Question 54

A simple document stating that anything you may have neglected to place in your trust during your lifetime should be placed in it at your death is called a:

Accepted Answer

pourover will

Question 55

If your beneficiary is too young or unable to handle money wisely, which kind of trust allows the beneficiary to receive small amounts of money at specified intervals?

Accepted Answer

A spendthrift trust

Question 56

what is untrue of ethical wills?

Accepted Answer

It is a legally binding document

Question 57

what is untrue about a letter of last instruction?

Accepted Answer

It is legally enforceable in all states.

finance winance ch. 19 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards