Ch 9. Practice Test Flashcards
Tenancy in common is a form of property ownership that
A. Has a right of survivorship feature.
B. Allows each tenant to sell his or her share only with the consent of the other.
C. Will require probate upon the death of a tenant
D. Can’t be used only by a husband and wife.
C. Will require probate upon the death of a tenant
in investment professional, who is not an attorney, is engaged in an unauthorized practice of law when he or she councils the client regarding the
A. Advisibility of having a will.
B. Validity of a living will.
C. Rules of the federal estate tax.
D. Meeting of estate planning terms.
B. Validity of a living will.
All of the following assets would be included in a decedents gross estate, except
A. Property that is solely owned by the decedent at death.
B. The decedent vested interest in a single life annuity on the decedent’s life.
C. 1/2 of the property owned by a decedent as community property with their spouse.
D. Life insurance in which the deceased has at death even one incident of ownership over the policy.
B. The decedent vested interest in a single life annuity on the decedent’s life.
Because no payments will be made to a survivor as a result of the decedent owning this asset, there is nothing to include in the decedent, gross estate.
A type of trust that is often used in incapacity planning is known as a
A. Irrevocable life insurance trust (ILIT)
B. Contingent (standby) trust.
C. Disclaimer trust.
D. Charitable split interest trust
B. Contingent (standby) trust.
A contingent standby trust is established to provide lifetime management of assets transferred to the trust for the benefit of the grant tour if and where the grant tour is no longer able to manage their assets due to mental or physical disabilities
If the executor of a decedent is state, elects the alternate evaluation date. Most of the state assets will be valued, as of how many months after the decedent death.?
A. 12
B. 3
C. 6
D. 9
C. 6
The largest and most complete interest in property that one can own is
A. Reversion.
B. Fee simple.
C. A life estate.
D. Remainder.
B. Fee simple.
Which of the following is an irrevocable trust in which the grant tour retains a right to receive fixed payments payable at least annually for his or her life or for a term of years?
A. Grantor retained income
B. Qualified personal residence trust
C. Grantor retained unitrust.
D. Grantor retained annuity trust
D. Grantor retained annuity trust
All the following assets in a decedent is state require probate, except
A. The decedent interest in property held in tenancy in common.
B. The decedent interest in property held in joint tenancy with right of survivorship that the decedent left his son in his will.
C. The decedent’s interest in a limited partnership.
D. The decedent’s interest in property that he owned in feesimple when the decedent had no will.
B. The decedent interest in property held in joint tenancy with right of survivorship that the decedent left his son in his will.
A person who dies testate
A. Owns real estate in more than one state.
B. Leaves no surviving heirs
C. Has no valid will
D. Has a valid will.
D. Has a valid will.
Which of these is characteristic of probate?
A. Not applicable, if there is no will.
B. Ensures estate privacy.
C. Expedite estate administration.
D. Often a costly and complex process.
D. Often a costly and complex process.
Which statement regarding gift splitting is not correct
A. Splitting doubles the annual exclusion for gifts of present interest.
B. All guests in that year made by both spouses to third parties must be treated as split gifts.
C. Gift splitting does not require the filing of a gift tax return.
D. Gift splitting is permitted only between spouses.
C. Gift splitting does not require the filling of a gift tax return.
Which of these is not a deduction from the total gross estate in arriving at the adjusted gross estate?
A. Theft and casualty loss losses.
B. Gift tax paid on prior taxable gifts.
C. Administrative expenses.
D. Funeral expenses.
B. Give tax paid on prior taxable gifts.
The marital deduction for a recipient spouse who is a US citizen is
A. $1,000,000
B. Unlimited.
C. 13,610,000.
D. 5,389,800.
B. Unlimited.
Dorothy age 73 is single. She has one granddaughter who is 16 years old. Dorothy wants to help find the granddaughter’s college education if Dorothy decides to open a section 529 plan for her granddaughter what is the maximum amount Dorothy can contribute to the plan in 2024 without making a taxable gift assuming she has made no prior gift to the granddaughter
A. 90,000.
B. 18,000.
C. 36,000.
D. 85,000.
A. 90,000.
A grandparent can contribute a maximum of 90,000 to a section 529 plan in 2024 for a grandchild without making a taxable gift contributions to an account in a single year could be taxed as if they were made over a five year period thus allowing contributions in a single year of up to five times the maximum an exclusion limit (18,000 x 5 =90,000)
which of these is a characteristic of a living will
A. Appoints an agent to manage an individuals affairs in the event of in capacity.
B. Allows an individual to make property request before death.
C. Has the same function as a living trust.
D. Allows an individual to specify in advance, his wishes about medical treatment and artificial life support under specific circumstances.
D. Allows an individual to specify in advance, his wishes about medical treatment and artificial life support under specific circumstances.
The gross state is best defined as all property
A. Owned by the decedent
B. Subject to the federal estate tax.
C. Listed in the decedent will.
D. In the probate estate.
b. Subject to the federal estate tax.
Which one of the following is not a federal transfer tax?
A. Income tax.
B. Estate tax.
C. Gift tax.
D. Generation-skipping transfer tax.
a. Income tax
Which of these is the valuation date for gifts?
A. The date the donor originally purchased the gifts.
B. The date on which the donee takes possession of the gifts.
C. The alternative valuation date.
D. The date on which the transfer is completed.
D. The date on which the transfer is completed.
Which type of trust is one from which the grant receives all income earned by the trust?
A. None of these.
B. Grantor retained annuity trust (GRAT)
C. Grantor retained unitrust (GRUT)
D. Grantor retained income trust (GRIT)
D. Grantor retained income trust (GRIT)
Which form of property ownership is only available for spouses?
A. Custodial agreements.
B. Tenancy by the entirety.
C. Joint tenancy.
D. Tenancy in common.
B. Tenancy by the entirety.
Which term describes the process to be followed if a person dies without a will
A. Ex-testate
B. Testamentary.
C. Testate
D. Intestate.
D. Intestate
Which of these power of attorney enables the principal to grant powers that remain in affect throughout the principals incapacity?
A. Nondurable power of attorney.
B. Durable power of attorney.
C. Springing durable power of attorney.
D. Special power of attorney.
B. Durable power of attorney.
Curtis establishing a trust for the benefit of his nephew Lloyd age 26 Lloyd has a history of financial irresponsibility and has run up significant amount of debt since he got out of college. Kurt wants to assure that Lloyd is not able to assign his interest in the trust to a creditor, and that Lloyds creditors cannot demand that the trustee pay Lloyd’s debts which of the following trust provisions will accomplish Curts objective?
A. Support provision.
B. Spendthrift provision.
C. Standby provision.
D. Sprinkling provision.
B. Spendthrift provision.
Two sisters plan to purchase an office building together once Sister will contribute 80% of the purchase price and the other will contribute 20% the sisters want title to the property to reflect their respective ownership shares of 80% and 20% and they want the ability to leave their interest to whomever they choose under their wills which of the following forms of property ownership will meet the sisters objectives
A. Joint tenancy with right of survivorship (JTWROS)
B. Community property.
C. Tenancy in common.
D. Tenancy by the entirety.
c. Tenancy in common.
