Investment Adv Clients

Question 1

Is a clients educational background important for determining whether a limited partnership is appropriate?

Answer 1

No

Question 2

Name the items the IRS defines as earned income

Answer 2

Wages salaries and tips Union strike benefits
Long term disability benefits received prior to minimum retirement age.
Net earnings from self employment.

Question 3

The grantor of the trust may be the trustee and or beneficiary of the trust desired? True or false?

Answer 3

True

Question 4

What is ERISA rule 404(b)?

Answer 4

States that “except as authorized by the secretary of labor by regulation no fiduciary maybe contain the Indica of ownership of any assets of the plan outside the jurisdiction of the District Court of the United States”

Question 5

What is ERISA rule 404(c)?

Answer 5

A rule dictating their conduct

Question 6

Does a payable on death account avoid probate?

Answer 6

Yes

Question 7

Which document is required in opening a guardianship account with a broker dealer?

Answer 7

A certificate of incumbency

Question 8

What is a certificate of incumbency?

Answer 8

Is a certified copy of the appointment of guardianship. It is evidence the person listed as acting as a fiduciary for another person.

Question 9

Does a testamentary trust allow assets to avoid the probate process?

Answer 9

No

Question 10

Does a testamentary trust reduce the grantors estate state tax burden?

Answer 10

No

Question 11

What is the benefit of a testamentary trust?

Answer 11

It allows the grantor to control all their assets until they die.

Question 12

Informing a client that she needs to increase her risk tolerance to obtain her goals is a reasonable course of action?

Answer 12

False

Question 13

What is the minimum financial req for investors of viaticals?

Answer 13

Anyone with net worth of $150,000 and gross income last year of $100,000 or a min net worth of $250,000

Question 14

True or false: alimony payments are taxed as earned income

Answer 14

False. They are taxes as unearned ordinary income.

Question 15

How is alimony taxed?

Answer 15

Payments are deductible and payments received are taxed as unearned ordinary income.

Question 16

Considered exceptions under ERISA fiduciary rules all nonfiduciary functions are defined as __________ functions.

Answer 16

Settlor

Question 17

Individuals who provide services to the retirement plan, such as attorneys, accountants, and x-rays, are considered ___________________ as long as they are acting solely in their professional capacity

Answer 17

Parties in interest

Question 18

Which is easier to form: A limited liability company or his sole proprietorship?

Answer 18

Sole proprietorship

Question 19

True or false: anyone with earned income is eligible to fund a Roth IRA?

Answer 19

False: because their income limitations on those who may fund a Roth IRA

Question 20

T or F: The investment policy statement of a qualified plan under ERISA requires a fiduciary the plan to be registered with the state administrator as an IA.

Answer 20

False. The fiduciary is defined as an IA, but is exempt from registration if the plan assets are at least $1 million and the IA has no place of business in the state.