BUSI 354 - Exam 1 Study Guide (ch 1-10)
What is the value of Jack's probate estate? A. $500,000 B. $950,000 C. $1,200,000 D. $2,355,000
A. $500,000
Which of the following statements regarding the probate of certain property interests is/are true? 1. property owned as tenants in common will be subject to probate 2. property owned JTWROS will be subject to probate 3. individually owned property will be subject to probate 4. assets owned by a revocable trust will be subject to probate A. 1 and 3 B. 1, 2, and 3 C. 1, 3, and 4 D. 1, 2, 3, and 4
A. 1 and 3
Which of the following statements concerning a fiduciary is incorrect? A. A CFP practitioner who charges commissions for products sold to clients is not a fiduciary B. Fiduciaries must perform their duties with utmost care and loyalty toward the beneficiaries they serve C. Fiduciaries can be sued for breach of fiduciary duty in civil court D. a CFP practitioner who provides financial planning advice to a client is considered a fiduciary
A. A CFP practitioner who charges commissions for products sold to clients is not a fiduciary
Which of the following statements is true? A. Larry's 403(b) will be considered community property B. Amy's 401(k) will be considered community property C. The cash account holding the proceeds of the sale of their home will be considered community property D. No assets will be considered community property because the assets were acquired in a common law state
A. Larry's 403(b) will be considered community property
Which provision in a trust instrument allows a trustee to make unequal distributions of trust income to beneficiaries? A. a sprinkling provision B. an ascertainable standard C. a 5- and 5 power D. a crummey power
A. a sprinkling provision
All of the following are true with respect to community property except: A. community property is a form of property ownership between spouses and non-spouses B. Community property retains its character even if the spouses move to a non-community property state C. at death, a spouse can transfer his interest in community property to whomever he wishes, without the consent of the other spouse D. Assets acquired by a spouse prior to marriage are not community property assets
A. community property is a form of property ownership between spouses and non-spouses
Which of the following statements is correct? A. homestead statutes protect certain rights, typically a primary residence, from a decedent's creditors B. dower and curtesy are statutes in all states that prescribe that surviving spouse's elective share rights C. assets that pass by intestacy will not be subject to probate D. IRA and 401(k) assets with named beneficiaries are subject to probate
A. homestead statutes protect certain rights, typically a primary residence, from a decedent's creditors
The difference between a durable power of attorney and a springing power of attorney is A. the durable power takes effect immediately; the springing power of attorney takes effect only upon the occurrence of a specified event B. the durable power of attorney takes effect only on the occurrence of a specified event; the springing power of attorney immediately springs into effect C. both the durable power of attorney and the springing power of attorney take immediate effect D. both the durable power of attorney and the springing power of attorney take effect upon the occurrence of a specified event
A. the durable power takes effect immediately; the springing power of attorney takes effect only upon the occurrence of a specified event
Marty transferred $18 million to an irrevocable trust that provides his son Jamie with unrestricted access to trust income and corpus for life. This was Marty's first taxable gift. The tax on the gift was $6,794,000 before Marty's unified credit was applied to reduce the gift tax. Based on the facts, which of the following statements is not correct? A. the gift tax that Marty must pay is tax inclusive B. the tax on Marty's taxable gift is $2,376,200 C. an annual exclusion is available to Marty to reduce the value of the taxable gift D. Marty's gross estate has been reduce by the amount of the gift and the gift tax paid
A. the gift tax that Marty must pay is tax inclusive
Which of the following is not a tax consequence associated with a defective trust? A. the income tax is shared by the trust and the trust beneficiaries B. the Grantor is subject to income tax C. for gift tax purposes, a gift into this trust is complete D. the trust assets are removed from the grantor's estate
A. the income tax is shared by the trust and the trust beneficiaries
Which of the following is not true concerning defective grantor trusts? A. the income tax paid by the grantor is an additional gift to the trust beneficiaries B. the income tax brackets applied to trusts are generally less favorable than the income tax brackets applied to the grantor C. if the grantor is not reimbursed by the trust for income tax, assets owned within the trust effectively grow income tax free D. the trust can contain a provision directing the Trustee to reimburse the grantor for any income tax paid on distributions not received by the grantor
A. the income tax paid by the grantor is an additional gift to the trust beneficiaries
Lois gifted stock to her dying husband, Bradley, worth $500,000. Her basis in this stock was $200,000. Bradley's will bequeathed all of this property to Lois. Assume Bradley died two years after receiving his stock. What was the consequence of this reverse stock? A. the stock received a step-up in basis at Bradley's death B. the stock did not receive a step-up in basis because it must be bequeathed to someone other than the decedent's spouse C. Lois inherited Bradley's adjusted basis in the stock D. Lois had to pay a gift tax when the stock was transferred to Bradley
A. the stock received a step-up in basis at Bradley's death
Jereme and Maxwell are business partners. They bought office space together and titled the property in a manner that would avoid probate in both of their estates. Jereme contributed $160,000 and Maxwell contributed $240,000 to the purchase price. When Jereme died, the office was valued at $600,000. What amount was included in Jereme's gross estate? A. $160,000 B. $240,000 C. $300,000 D. $600,000
B. $240,000
What is the amount that Doug will inherit at Max's death? A. $0 B. $75,000 C. $150,00 D. $325,000
B. $75,000
Janine made the following transfers this year. Which transfer is an incomplete gift? A. a gift of the remainder interest in her beach house that she gave to her son Leo B. $75,000 the Janine transferred to her revocable trust C. a distribution of $20,000 made from Janine's revocable trust to her daughter Lindsay D. a portfolio of bonds Janine transferred to an irrevocable trust she established for her father
B. $75,000 the Janine transferred to her revocable trust
Anne consults a CFP practitioner to discuss her financial and estate planning goals. Which of the following factors will not be important for the CFP practitioner to know in determining whether Anne should update her will ? A. Anne has recently gotten divorced B. Anne recently hired a new investment manager because she was not happy with her former manager C. Anne last updated her will 20 years ago D. since Anne last updated her estate plan, her net worth has increased substantially
B. Anne recently hired a new investment manager because she was not happy with her former manager
Roger, a CFP practitioner, met with his client, Martha, shortly after her husband died. Martha wants to remove her husband as the beneficiary fo her revocable trust and life insurance policy and replace the beneficiary with her son, Rick. Martha also wants to change the agent of power of attorney to her son Rick. What actions can Roger take to help his client? A. Roger can make changes to all of the documents himself if a notary witness the changes B. Roger can assist Martha in completing a change of beneficiary form from her life insurance company C. Roger can make a beneficiary change to Martha's revocable trust directly on the trust instrument D. Roger can make a beneficiary change to the durable power of attorney if Martha witnesses the change
B. Roger can assist Martha in completing a change of beneficiary form from her life insurance company
Sam and Shana are married. They move from Delaware to Texas. Which of the following assets will be deemed community property? A. Sam purchased a boat in Texas with money he had earned while they were married and living in Delaware B. Sam's employer in Texas has a 401(k) plan and Sam funds it with the max amount that is allowed each year C. Shana worked while they lived in Delaware, and transferred the money into a joint savings account D. Shana received an inheritance from her great aunt while they lived in Texas
B. Sam's employer in Texas has a 401(k) plan and Sam funds it with the max amount that is allowed each year
The residuary clause in Shawn's will states that the residue of his estate will pass to his wife Amy. Who will receive the family vacation home? A. Amy B. Toby C. Judy D. Whoever Shawn named in his will
B. Toby
Which of the following can be accomplished by a health care proxy? A. can express the client's desire to transfer assets to designated heirs B. can express the client's desire with respect to the use of heroic life-saving measures in the event of a terminal condition C. can name an agent to take over management of the client's financial assets if the client becomes incapacitated D. requires a court to appoint a Guardian for an incompetent person
B. can express the client's desire with respect to the use of heroic life-saving measures in the event of a terminal condition
An executor must perform all of the following actions, except: A. notify potential creditors of the decedent's death B. choose a corporate fiduciary to manage the decedent's real property C. Distribute the decedent's assets to beneficiaries named in the will D. pay the decedent's debts and taxes
B. choose a corporate fiduciary to manage the decedent's real property
The Florida home will be subject to ancillary probate because Jack lived in New Mexico. A. true B. false C. true only if there is no will
B. false
Which of the following statements regarding property owned jointly with rights of survivorship between non-spouses is correct? A. if one person owns an asset and changes the title to joint tenancy with rights of survivorship with a non-spouse, he can re-title the asset to individual title at any time B. if joint tenants sell property they are each deemed to have received half of the proceeds of the sale C. the amount that is included in a decedent's gross estate when an asset is titled jointly with rights of survivorship between non-spouses is one-half of the value of the property D. when two non-spouses own an asset jointly with rights of survivorship, each person's interest will pass per the terms of their will
B. if joint tenants sell property they are each deemed to have received half of the proceeds of the sale
Rufus, a wealthy widower, intends to gift property on his daughter, Jade, to reduce the value of his gross estate. Which property is best for Rufus to keep? A. commercial property located in another state worth $10 million B. industrial condos worth $10 million that Jade intends to sell after Rufus dies C. stock that Rufus owns in a rapidly appreciating tech company worth $10 million D. a $10 million life insurance policy Rufus owns on his life
B. industrial condos worth $10 million that Jade intends to sell after Rufus dies
Which of the following statements pertaining to Medicaid is correct? A. it is a government program that provides income for needy elderly individuals B. it is a government program designed to provide health benefits to all individuals over age 65 C. it is a government program designed to provide health benefits to the needy D. it is a federal government program not impacted by state law
B. it is a government program designed to provide health benefits to all individuals over age 65
Which of the following is not true about property transfers at death? A. property that is owned jointly with the right of survivorship will pass automatically to the joint property holder B. property owned as tenants by the entirety will pass per terms of the decedent's will C. life insurance will pass to the name beneficiary D. assets passing by pour-over will to a revocable trust will be subject to probate
B. property owned as tenants by the entirety will pass per terms of the decedent's will
Robinson owned rapidly appreciating stock with a basis of $20,000. He gifted a share of the stock to his step-son Zach when it reached $100,000. Robinson had previously depleted his unified credit therefore he had to pay a gift tax of $19,600 for this $85,000 taxable gift. Which statements regarding the tax consequences of this gift are correct? A. the gift tax that Robinson paid is tax inclusive which reduced the value of the gift to Zach to $80,400 B. when Zach sells the stock, he will assume Robinson's full holding period because the FMV of the stock is greater than Robinson's basis C. Zach must pay the gift tax of $19,600 as a condition for accepting this gift D. because a gift tax was paid, a new adjusted basis in the stock must be calculated and added to the stock's original basis
B. when Zach sells the stock, he will assume Robinson's full holding period because the FMV of the stock is greater than Robinson's basis or D. because a gift tax was paid, a new adjusted basis in the stock must be calculated and added to the stock's original basis
Which of the following best describe Bill's children's interest in the property?
Bill's children have a contingent remainder interest in the home
What is the value of assets that will be included in Shawn's gross estate? A. $2,500,000 B. $1,500,000 C. $1,250,000 D. $1,000,000
C. $1,250,000 (IRA, HOME, STOCK ACCOUNT)
The Jim Peters Trust holds a vacation home whcih is rented out and holds some marketable securities and cash. The trust received tax-exempt income of $1,000, taxable income of $3,000, capital gains of $5,000 and rental income of $12,000. The trust had expenses of $10,000 which it incurred in maintaining the rental property. The trust distributed $25,000 to Jim's son, Jimmy. what is the amount that the trust can deduct for distributions made to Jimmy? A. $25,000 B. $11,000 C. $5,000 D. $1,000
C. $5,000
Carolyn receives a distribution of $520,000. How much of that will be taxable income? A. $520,000 B. $500,000 C. $50,000 D. $0
C. $50,000
Tom has a substantial estate valued at $10,120,000. Included in that amount is a $2,000,000 IRA. Assume that the estate tax assessed on Tom's estate was $1,750,000, $700,000 of which is attributed to Tom's IRA. If the IRA was distributed to Tom's estate in the year of his death, what is the amount of the IRD deduction that the estate may claim? A. $2,000,000 B. $1,750,000 C. $700,000 D. $0
C. $700,000
While Larry and Amy live in Cali, which of the following sources of income would be considered community income and deemed earned one-half by each spouse? 1. income larry earns at his job 2. Income earned on the joint checking account 3. income earned on the mutual fund account funded with Larry's earnings 4. income earned by the cash account in Amy's name with the proceeds of the sale of their house A. 1, 2, and 4 B. 2 and 3 C. 1, 2 and 3 D. 1, 2, 3, and 4
C. 1, 2 and 3
Which of the following is NOT true with respect to the mutual fund account once they move to Cali? A. the asset will be considered a community property asset and each spouse will have one-half interest in the account B. amy is free to bequeath her interest in the mutual fund account to anyone else she wishes, without Larry's consent C. Larry is free to gift his interest in the mutual fund account to anyone he wishes, without Amy's consent D. The entire value of the account will receive a step up in basis at Larry's death
C. Larry is free to gift his interest in the mutual fund account to anyone he wishes, without Amy's consent
Morgan and Jasmine are married and moved from California to North Carolina. Which of the following assets will be considered a community asset in North Carolina? A. Jasmine received an inheritance while living in California and she uses the proceeds to buy a vacation home in the Outer banks. B. Morgan receives a large bonus while living in North Carolina and buys a BMW with the proceeds C. Morgan and Jasmine use the proceeds of the sale in their California home to purchase a new primary residence in NC D. Jasmine has a stock account that is titled in her individual name that was funded with money she earned before marrying Morgan.
C. Morgan and Jasmine use the proceeds of the sale in their California home to purchase a new primary residence in NC
Sally has received a life estate in a vacation home in the Outer banks from her great aunt. Following Sally's death, Jake will receive the property outright. Which of the following statements is NOT correct? A. If sally rents the home out, she will have to report any income received on her income tax return B. Sally is responsible for paying property taxes and maintaining the property during her lifetime C. Sally may bequeath the property to her children following her death D. the value of the property will not be included in Sally's estate
C. Sally may bequeath the property to her children following her death
Which of the following statements concerning a bargain sale is not correct? A. a bargain sale is part sale and part gift B. when the sale price is below FMV, the gift is the difference between the sale price and the asset's FMV C. a bargain sale the family members cannot result in a taxable gift D. bargain sales can be made to charities
C. a bargain sale the family members cannot result in a taxable gift
Kristen, a CFP practitioner, reviewed a new client's financial plan that was developed eight years ago. Her client has subsequently inherited $7 million, acquired property that is not mentioned in his will, and is showing signs of early dementia. What should Kristen do to help her client? A. accompany her client to an appointment with an accountant to obtain estate tax advice B. Fill out a durable power of attorney document downloaded from a website C. accompany her client to an appointment with his estate planning attorney D. add a beneficiary to his will for the newly acquired property
C. accompany her client to an appointment with his estate planning attorney
Anthony's doctors have told him that he is starting to show signs of Alzheimer's Syndrome and he is concerned that he may lose his mental faculties down the road. he wants to make sure that his wife, Judy, is able to assume management of all assets and to make health care decisions for him. He wants to be sure that the transition of management is as seamless as possible. Anthony consults Jeff, a CFP professional. Which of the following steps should Jeff not recommend Anthony take to ensure that his assets can continue to be managed and his assets can continue to be managed and his health care needs are taken care of in the event that he becomes incapacitated down the road? A. anthony should execute a revocable trust naming Judy as a successor trustee B. anthony should execute a springing power of attorney, naming Judy as his attorney-in-fact C. anthony should rely on the court system to appoint Judy as his conservator to ensure that all laws are complied with D. anthony should execute a health care proxy and health care power of attorney naming Judy as his agent
C. anthony should rely on the court system to appoint Judy as his conservator to ensure that all laws are complied with
Which of the following is correct with respect to Enzo's business interest? A. his business interest will not be included in his estate B. his business should pass to alicia so that he can have a job following his death C. he should consider to buy-sell agreement with his business partners to ensure a smooth transition of his business interest D. he should consider a prenuptial agreement with Alicia to ensure that she does not receive his business interest
C. he should consider to buy-sell agreement with his business partners to ensure a smooth transition of his business interest
Which assets should Gary help Beth transfer to her trust while she is still alive so that they will not be subject to probate? i. life insurance valued at $1,000,000 - her children are named as the beneficiaries ii. stock account in her name alone - $1,500,000 iii. a rollover IRA which she created following Gary's death worth $750,000 - her children are named as the beneficiaries iv. a mutual fund account titled JTWROS with carter valued at $750,000 V. her home which she owns in her name alone valued at $600,000 A. i, ii, and v B. iii and iv C. ii and v D. i, iii, and iv
C. ii and v
Which of the following statements is not a valid reason for Anthony to execute a durable power of attorney? A. it can serve as an addition to his revocable living trust to provide management of assets that are not owned by the trust B. it can be used to avoid guardianship proceedings C. it can be used to test family members' management of his assets D. it can be used to ensure continuous management over assets
C. it can be used to test family members' management of his assets
Jane is named Jack's executor. Which of the following is not a step that Jane will have to take with respect to settling Jack's estate? A. valuation of the estate B. providing notice to Jack's creditors C. making Jack's funeral arrangements D. distributing assets per Jack's will
C. making Jack's funeral arrangements
Which of the following assets will be available to satisfy the general bequests to Vicky and Dan? A. Max's 401(k) B. vacation home C. mutual fund account D. bond portfolio
C. mutual fund account
Which of the following assets will be subject to probate at Alicia's death? A. stock worth $600,000 B. bonds worth $250,000 C. mutual funds worth $200,000 D. life insurance on Alicia's life worth at $1,000,000
C. mutual funds worth $200,000
All of the following are advantages of the probate process except: A. court supervision of executor's activities B. inventory of estate assets C. privacy of decedent's will D. validation of decedent's will
C. privacy of decedent's will
Which of the following would not cause a trust to be treated as a grantor trust? A. the grantor's spouse may substitute trust assets for other property of equal value B. the grantor's spouse is a potential trust beneficiary C. the grantor's spouse serves as trustee D. The grantor's spouse retains a 10% reversionary interest
C. the grantor's spouse serves as trustee
Which of the following powers should a testator not give to his executor? A. the power to manage probate assets, such as investment accounts or business interests B. the power to any debts, expenses and taxes or to file any necessary tax returns C. the power to determine whether beneficiaries listed in the will should receive the property bequeathed to him or her D. the ability to retain professionals such as accountants or attorneys to help him settle the decedent's estate
C. the power to determine whether beneficiaries listed in the will should receive the property bequeathed to him or her
All of the following are requirements of a will except A. must be signed by the testator B. must be signed by at least two (2) witnesses C. the testator does not have to be competent D. must be valid under state law
C. the testator does not have to be competent
Which of the following is an appropriate suggestion for Carolyn to give to Alicia and Enzo? A. They should each transfer their insurance policies to an irrevocable trust to remove the death benefit from their estates B. they should name their estate as the beneficiary of their life insurance policies so that the proceeds pass to the surviving spouse per the terms of the client's will C. they should re-title the mutual funds and bonds to joint tenancy with rights of survivorship to avoid probate
C. they should re-title the mutual funds and bonds to joint tenancy with rights of survivorship to avoid probate
The gift tax and the estate tax are cumulative and progressive. Taxable gifts made since 1976 are added to a decedent's estate tax return as an adjusted taxable gift. Why? A. to reduce the decedent's estate tax liability B. to keep the estate tax rate at a level 18% C. to position the estate tax into a higher rate bracket D. to impose different tax rates on transfers made during life and at death
C. to position the estate tax into a higher rate bracket
Which of the following techniques can be used to avoid the ancillary probate of a home owned in a state other than the state of residence? A. title the home as tenants in common with a surviving spouse B. bequeath the home to the surviving spouse by will C. transfer ownership of the home to a revocable trust D. title the home in one person's individual name
C. transfer ownership of the home to a revocable trust
Sally had just completed her estate planning and has fully executed pour-over will and revocable trust. Her estate is comprised of the following assets: $500,000 primary residence; $750,000 vacation home; $100,000 cash; $740,000 art work; $200,000 brokerage account. Sally is divorced and owns all of the assets in her own name. What value of Sally's estate will be subject to probate> A. zero since she has an executed revocable trust designed to minimize the estate's exposure to probate B. $800,000 C. $1,550,000 D. $2,300,000
D. $2,300,000
What is the value of assets that will be subject to probate at Shawn's death? A. $1,250,000 B. $1,000,000 C. $750,000 D. $250,000
D. $250,000 (STOCK ACCOUNT ONLY)
Assuming Max predeceases Alicia and Alicia does not change her will, what is the amount that Tammy will inherit at Alicia's death? A. $1,235,000 B. $1,110,000 C. $617,000 D. $555, 000
D. $555, 000
Natalie does not wish to leave any of her assets to her husband Josh when she dies. Instead she wishes to leave assets to her children. Which of the following is true? A. Natalie can disinherit Josh in her will B. Natalie should change the title of her assets to her individual name C. Josh will be out of luck if Natalie doesn't leave him anything D. Josh may elect against Natalie's will
D. Josh may elect against Natalie's will
Who will receive the stock account? A. Amy B. Toby C. Judy D. Whoever Shawn named in his will
D. Whoever Shawn named in his will
Marlene, a divorced mother of two young children, met with an estate planning attorney to obtain a will and estate planning documents. She appointed her father as agent of her power of attorney to handle all of her financial affairs if her doctors declare her incompetent. Which power of attorney best describes the type Marlene has executed? A. a non-durable power of attorney B. a general power of attorney C. a health care proxy D. a springing durable power of attorney
D. a springing durable power of attorney
Murray is working with his clients, Josh and Mandy, to help them implement a new estate plan developed by an estate planning attorney. If Murray were to perform the following tasks, which actions would constitute the unauthorized practice of law? A. funding the couple's revocable trust B. calculating each spouse's estate tax liability C. changing the deed of the couple's home to a tenancy in common D. adding a codicil to a will
D. adding a codicil to a will
What techniques represent some tax-oriented advantages of gifting? A. a donor can use an annual exclusion to reduce the value of a taxable, present-interest gift B. gift-splitting is available to a married couple to reduce the value of a taxable gift C. the unified credit must be used to offset taxes on inter-vivos taxable gifts that do not exceed the exemption equivalent amount D. all of the above
D. all of the above
Which of the following will Alex not be allowed to do in his will? A. bequeath his sailboat to his brother John B. bequeath $25,000 to each of his nieces and nephews C. disinherit his son Jack D. disinherit his wife Sally
D. disinherit his wife Sally
All of the following statements regarding property held as tenants by the entirety are correct except: A. neither party can unilaterally transfer his or her interest B. each party holds an undivided interest in the whole property C. the property passes automatically to the survivor at the time of the first death D. either two spouses or a parent and child may hold property as tenants by the entirety
D. either two spouses or a parent and child may hold property as tenants by the entirety
If Judy predeceased Anthony and Anthony was still competent, which of the following would be appropriate to address Anthony's incapacity concerns: A. execute a non-durable power of attorney naming his daughter Angela as attorney-in-fact B. execute a will naming his daughter angela as executor C. do nothing, because Judy's death would not affect the validity of his estate plan D. execute a durable power of attorney naming Angela as his attorney-in-fact
D. execute a durable power of attorney naming Angela as his attorney-in-fact
Which of the following statements is true regarding the trust beneficiaries' interests? A. the value of the home will be included in Lori's estate B. lori can decide to transfer the home to her grandchildren by will C. the trustee can distribute the property outright to Bill's children without Lori's permission before Lori's death D. following Lori's death, Bill's children may sell the home
D. following Lori's death, Bill's children may sell the home
Which of the following best describes the tax consequences associated with revocable trusts? i. all assets are included in the beneficiary's gross estate ii. the grantor is responsible for the payment of income tax liability iii. the grantor does not make taxable gifts into the trust A. ii only B. i and ii C i and iii D. ii and iii
D. ii and iii
Which of the following is not an objective of a "special needs trust" ? i. to provide benefits to a disabled person ii. to ensure that the beneficairy of the trust is not disqualified from state or federal government assistance programs iii. to allow the disabled beneficiary unlimited access to the trust assets A. i B. i and iii C. ii D. iii
D. iii
For which of the following reasons would a grantor fund an inter vivos revocable trust? i. shift income tax liability ii. reduce estate tax liability iii. reduce exposure to probate A. i and ii B. ii and iii C. i and iii D. iii only
D. iii only
If Larry and Amy were moving to Texas (a straight community property state) instead of Cali, which of the following assets would be considered community property? 1. Larry's 403(b) 2. Amy's 401(k) 3. Joint checking account 4. mutual fund account A. 1, 3, and 4 B. 1, 2, 3, and 4 C. All of the above D. none of the above
D. none of the above
Catalina and Lucia are friends who bought a vacation condo together for $350,000 in New Mexico. Each one paid one-half of the purchase price. Catalina wants her son to receive her share of the property when she dies and Lucia wants her two children to equally own her property interest at her death. How should the friends title the condo? A. Community property B. joint tenancy with rights of survivorship C. Revocable trust with the three children as equal beneficiaries D. tenancy in common
D. tenancy in common
Oliver, who never married, created an irrevocable trust for the benefit of his niece and her family and funded it with $2 million. He did not have a general power of appointment over the trust but he retained the right to change the beneficiaries and alter their interests in the trust. Which statement correctly describes the consequences to Oliver's estate? A. the trust will not be included in Oliver's gross estate because he did not have a general power of appointment over the trust assets B. the trust will not be included in Oliver's estate because it is an irrevocable trust C. the trust will be included in Oliver's estate because he has retained a reversionary interest in the trust D. the trust will be included in Oliver's estate due to the grantor trust rules
D. the trust will be included in Oliver's estate due to the grantor trust rules
It is important for a financial planner to review a client's will for all of the following reasons, except: A. to ensure that the titling of property is coordinated with bequests B. to ensure that property designated for a beneficiary is currently owned by the client C. to ensure that the power fiduciaries and contingent fiduciaries have been selected D. to ensure that will provides burial instructions at the client's death
D. to ensure that will provides burial instructions at the client's death
Which of the following factors could affect a client's current estate plan? A. deterioration in the client's health B. a sale of the client's business for $25 million C. the purchase of a vacation home in another state D. a substantial loss in the client's investment portfolio E. all of the above
E. all of the above
Max wishes to leave his interest in the vacation home to his children. Jen tells him that he can do this by simply bequeathing his interest to his children by will TRUE OR FALSE
FALSE
True or False: Alex will have to claim the $20,000 as income as it was a distribution from the estate and the estate had $50,000 of income
False
Which of the following statements that Gary makes to Beth is not correct?
If beth becomes incapacitated and carter serves as successor trustee she has made a taxable gift to carter
In which of the following situations would probate be most advantageous?
a married couple has four children. they will to disinherit one of the children because they do not like his wife and think that she is a gold digger