SERIES 65
Which of the following statements about S corporations is NOT correct?
S corporation status offers greater opportunity for raising additional capital than do other forms of business structure.
Agatha has an account with her aunt, Sally, which is registered as TIC. If Sally predeceases Agatha, the assets in the account go to
Sally's estate
A married couple wishes to open up an account at your firm. Which choice of registration would you recommend if they insist that no trading be done without the consent of both of them?
Tenants in the entirety
Which of the following accounts can only be opened by spouses?
Tenants in the entirety
Keisha has 3 married children, each with children of their own. She wishes to leave equal shares of her estate to each of her children. What happens if 1 of those children dies before Keisha?
The share belonging to the deceased child is distributed per stirpes
Gloria wishes to set up a trust where income must be annually distributed to her daughter. She wants her daughter to pay any income taxes because she is in a lower tax bracket than Gloria is. What should Gloria do?
Use a simple trust with her daughter as irrevocable beneficiary
An investment adviser registered with the SEC could have all of the following as advisory clients EXCEPT
the ABC Unit Investment Trust
When opening an account for a trust, which of the following sets of terms are synonymous?
Settlor—grantor
An investment adviser could enter into an advisory contract with any of the following EXCEPT
a person declared mentally incompetent
The president of a business entity opens an account in the name of the business. When determining the suitability of recommendations to the account, knowing the president's personal financial condition is necessary for each of the following forms of business structure EXCEPT
a C corporation
If a trust has been established under which the father is to receive income for life, and his son is to receive the trust principal on the father's death, which of the following statements is TRUE?
The trustee is not required to notify the son when an income distribution is made to the father.
A deceased individual with 2 surviving children and a spouse, had established a trust for his family. The trust document appointed both children as co-trustees. The surviving spouse is to receive current income, and his 2 children will receive equal shares of the remaining principal upon the spouse's death. As the adviser to the account, you
follow the instructions of the trustees
Your client recently sold his business for $5 million. He is 55 and feels that he is too young to retire. He plans to start a new business venture and will be funding the $250,000 start-up costs with his own funds. With substantial personal assets, he could limit his personal exposure by using any of the following business structures EXCEPT
a sole proprietorship
An individual opens an account with your firm. She tells you that upon her death, she wants any assets in the account to be divided equally among her 3 children. She also wants the ability to change the allocation in the event that conditions change and 1 of the children is in greater need than the others, but she does not want to incur any significant legal expense. You would suggest that the account be opened
as an individual TOD account
