Unit 2 Estate Planning FINA 4397

A person dies testate if he has a

valid will

Which of the following statements regarding the role of executors in estate administration is(are) CORRECT?

An executor is considered to be a fiduciary. An executor should balance the needs of all beneficiaries. an executor's first responsibility is to locate and submit the will for probate, but the executor is also responsible for managing the probate estate until the probate proceeding is closed.

A revision of a will is a:

Codicil

Which of the following are fiduciary relationships created by law to enable one person to manage the property of another?

Conservatorships You conserve money or property.

Elaine has consulted a CFP® professional for help in preparing her estate plan. She has a relatively small estate, and her main objective is to avoid probate. Which of the following actions will help Elaine achieve her objective?

Designate her daughter as beneficiary of her IRA Open a payable on death (POD) bank account with her son Transfer assets to a revocable living trust

Which of the following powers of attorney enables a principal to grant powers that will remain in effect throughout the principal's incapacity?

Durable A durable power of attorney is a power of attorney that is not terminated by subsequent disability or incapacity of the principal. A durable power of attorney continues in effect until revoked by the principal or terminated by its terms or by the death of the principal. is a practical alternative for caring for the property of incapacitated clients.

Which of the following estate planning tools would allow an attorney-in-fact to expedite the principal's Medicaid eligibility, arrange for in-home or nursing home care, hire necessary health care personnel, or employ companions?

Durable POA

A document that appoints a surrogate decision maker in non-terminal medical situations when the patient is incapacitated is a:

Durable power of attorney for health care.

Which of the following wills is totally handwritten by the testator?

Holographic

Which of the following will avoid probate at the owner's death?

POD account. Tenancy by entirety. Funded inter vivos trust. Joint tenancy with right of survivorship.

Which of the following statements regarding probate is(are) CORRECT?

Probate may be costly and create delays in the distribution of assets. Probate is open to public scrutiny. Probate protects creditors. Probate provides heirs and/or legatees with clear title to property. The main point of the probate estate is transferring ownership. The main point of the gross estate is to start the estate taxation process.

Which of the following statements regarding a general power of attorney are CORRECT?

The agent's powers are limited to those specified in the written document. In most states, the agent's powers end when and if the principal becomes legally incompetent, incapacitated, disabled or dies.

Which of the following statements regarding durable powers of attorney is(are) CORRECT?

The power survives the incapacity of the principal. The power does not survive the death of the principal. The power may be springing. A principal must be 18 and competent at the time the durable power of attorney is created.

Which of the following is typically a reason for establishing a special needs trust?

To pay the needs of a beneficiary who is receiving public assistance while protecting assets from government attachment

All of the following statements regarding transfers of property at death are correct :

Transfers at death by contract include life insurance proceeds and retirement plan death benefits with named beneficiaries. Property can be transferred at death by will, by contract, or by operation of law. Death benefits from retirement plans pass to named beneficiaries outside the will.

Which of the following statements regarding the basis of inherited property is(are) CORRECT?

When a decedent owns property in his name alone, the vast majority of the types of property receive a stepped-up basis when the decedent dies. When spouses own property as community property, both halves of the property receive a stepped-up basis when the first spouse dies.

Guardianship

a fiduciary relationship that enables one person to manage the personal care and well-being (but not the property) of another. You guard a person.

All of the following are possible advantages of using testamentary trusts in estate planning

a testamentary trust can provide for professional management of the trust assets a testamentary trust can provide flexibility in future income and corpus distributions The assets transferred to a testamentary trust through the decedent's will are subject to probate. a testamentary trust can be revoked by the testator any time before death

All of the following statements regarding Medicaid planning are correct

attempts to spend down assets to become Medicaid eligible are subject to a 60-month look-back period planning is best attempted with the advice of a specialist such as a qualified elder law attorney each state has its own asset and income level requirements for Medicaid eligibility If a client is married, the personal residence is not a countable asset. Real estate other than the couple's primary residence is countable.

Real estate is probated according to the law of its situs (where the property is located)

personal assets are probated according to the law of the decedent's domicile.

A springing power of attorney:

springs into existence upon the principal's incapacity.