This document contains 60 multiple choice questions about various topics related to estate planning, including wills, trusts, probate, taxes, retirement accounts, life insurance, and medical directives. The questions cover topics like the definition of an estate, the probate process, types of trusts and powers of attorney, taxation of estates and retirement accounts, and planning for costs in retirement such as healthcare expenses.

1. Page 3
Page 1
1.
The wealth you accumulate over your lifetime less any debts
you owe is your estate.
A)
True
B)
False
2.
It is crucial in estate planning to plan the transfer of ownership
of your assets.
A)
True
B)
False
3.
Probate is a court procedure to distribute assets of an estate.
A)
True
B)
False
4.
All property included in an estate must go through probate.
A)
True

2. B)
False
5.
Covered calls means
A)
I own 100 shares of the call I wrote
B)
I don’t own 100 shares of the call I wrote
6.
Naked calls writing
A)
I own 100 shares of the call I wrote
B)
I don’t own 100 shares of the call I wrote
7.
Legal heirs to an estate are defined by the federal government.
A)
True
B)
False
8.
A will is a written document that directs the disposition of
assets after death.
A)
True
B)
False

3. 9.
A person who inherits or is entitled by law or by the terms of a
will to inherit some asset is called an heir.
A)
True
B)
False
10.
When one dies without a will, the judge who probates the estate
has control over the distribution of property.
A)
True
B)
False
11.
Derivatives derive their value based on an underlying security.
A)
True
B)
False
12.
If you buy a call, you are betting the stock will go past the
strike price you wrote the call for
A)
True
B)
False

4. 13.
A beneficiary is a person or organization designate to receive a
benefit, such as an IRA or 401(k) plan.
A)
True
B)
False
14.
A 401k plan is named after the tax code of the IRS that states
what a employee sponsored retirement plan can be
A)
True
B)
False
15.
Property owned in joint tenancy with right of survivorship is
distributed through probate.
A)
True
B)
False
16.
The partnership theory of marriage rights is the basis for the
presumed intent of wedded couples to share their fortunes
equally.
A)
True
B)
False

5. 17.
If you write a call, you are betting the stock will go past the
strike price you wrote the call for
A)
True
B)
False
18.
Most retirement accounts at work have __________ as the main
investment choice
A)
Stocks
B)
Mutual funds
19.
An irrevocable trust cannot be changed or undone by the grantor
during his or her lifetime.
A)
True
B)
False
20.
In community property states, all property owned by spouses is
jointly owned by the spouses, no matter how it was acquired.
A)
True
B)
False

6. 21.
If you buy a put, you are betting the stock will go up in value
A)
True
B)
False
22.
The airline industry would most likely purchase what future
contract
A)
Jet fuel
B)
Gasoline
23.
A health care proxy is a legal document in which an individual
designates another person to make health care decisions if the
individual is rendered incapable of making his or her wishes
known.
A)
True
B)
False
24.
A living will is a written statement indicating that its signer
does not wish extraordinary medical measures to be taken if he
or she has no reasonable expectation of recovery from a
desperate medical problem.
A)
True

7. B)
False
25.
Purchasing a futures contract helps determine your future cost
of the item you purchased.
A)
True
B)
False
26.
You should have at least ____% of your pre-retirement income
once you retire
A)
25%
B)
70%+
27.
When planning your retirement income, it is wise to include
expected Social Security contributions
A)
True
B)
False
28.
In states with community property laws, the law assumes that
the surviving spouse owns everything that both partners earned
during the marriage.
A)

8. True
B)
False
29.
A Roth IRA is free of any taxes since it is not deductible
A)
True
B)
False
30.
Surviving relatives have an obligation to repay the decedent’s
creditors for debts that exceed the assets of the estate.
A)
True
B)
False
31.
Trusts can be used to transfer assets outside of probate.
A)
True
B)
False
32.
The proceeds of life insurance, if payable to the estate of the
deceased, are included in one’s estate, and the beneficiary of
the policy must pay income taxes on the life insurance proceeds.
A)
True

9. B)
False
33.
The proceeds of a life insurance policy are included in a
person’s estate for federal estate taxes purposes if the deceased,
while alive, retained any ownership interest.
A)
True
B)
False
34.
Divorce terminates an ex-spouse’s status as the named
beneficiary of a retirement plan or a life insurance policy.
A)
True
B)
False
35.
Major changes in a will may be made with a codicil.
A)
True
B)
False
36.
A testamentary trust becomes effective upon the death of the
beneficiary.
A)
True

10. B)
False
37.
A durable power of attorney gives the designated person
virtually absolute power to manage your financial affairs.
A)
True
B)
False
38.
A special power of attorney gives the designated person
virtually absolute power to manage your financial affairs.
A)
True
B)
False
39.
All 401K and 403bs are always matched by employer’s
contributions
A)
True
B)
False
40.
The marital deductionallows an estate to pass on an unlimited
amount of assets to a surviving spouse free of estate taxes.
A)
True

11. B)
False
41.
_____ comprises the arrangements you make during your
lifetime for the administration and transfer of your worldly
possessions and assets after your death.
A)
Probate court
B)
A will
C)
Estate planning
D)
A codicil
42.
A self-directed traditional IRA has all the following benefits
except
A)
Tax deductible
B)
Your choice of investments ( based on what the brokerage firm
offers)
C)
You never have to pay taxes on the money once you use it
D)
You can put up to a set amount each year in it
43.
Some states have passed laws that allow parents to set aside
money in a trust specifically for the benefit of a disabled child
or adult while letting him or her retain all public benefits, like

12. Medicaid or welfare. This kind of trust is called a(n)
__________ trust.
A)
irrevocable living
B)
charitable remainder
C)
special needs
D)
testamentary
44.
Which of the following would be considered an estate planning
mistake?
A)
Having a will
B)
Having a signed medical power of attorney
C)
Choosing an executor based on emotional ties.
D)
Having a legal guardian appointed for each of your children
45.
The trustor gives up the following right(s) under an irrevocable
living trust:
A)
Control of the property
B)
Change of the beneficiaries
C)
Change of the trustees
D)
All of these

13. 46.
The initial step in estate planning is to
A)
make a will.
B)
inventory everything you own and owe.
C)
contact a lawyer.
D)
appoint a guardian.
47.
The __________ IRA does not allow for a deduction
A)
401k
B)
Roth
C)
traditional
D)
Retirement
48.
Which probate property goes through a court-supervised
transfer of a decedent's assets?
A)
The probate estate
B)
Assets transferred by contract
C)
Assets transferred by operation of law
D)

14. Life insurance estate
49.
When one dies without a will, this is called dying
A)
escheat.
B)
intestate.
C)
testate.
D)
probate.
50.
The right of escheat gives a deceased's property to the
A)
surviving spouse.
B)
children.
C)
parents.
D)
state of residence.
51.
An expense that you will have in retirement that you may not
have now is
A)
Food
B)
Car insurance
C)
Medical Insurance

15. D)
Flood Insurance
52.
Which of the following transfers assets by operation of law?
A)
Wills
B)
Joint tenancy with right of survivorship
C)
Trusts
D)
Retirement plans
53.
The average retirement account for a person age 55 or over is (
based on a report form Vanguard)
A)
$25,000
B)
$55,000
C)
$75,000
D)
$125,000
54.
Retirement planning
A)
Takes luck
B)
Takes discipline
C)

16. Is not important
D)
Is done by the company you work for
55.
A(n) _____ is created under the terms of a will and becomes
effective on the death of the grantor according to the terms of
the grantor's will or revocable living trust.
A)
testamentary trust
B)
advanced directive
C)
power of attorney
D)
escheat
56.
A _____ is designed to take effect only when the grantor is
unable to manage his or her own financial affairs owing to
incapacitation.
A)
letter of last instructions
B)
power of attorney
C)
durable power of attorney
D)
trust
57.
A legal document that directs life support measures, such as a
respirator, to be removed is called a

17. A)
letter of last instructions.
B)
health care power of attorney.
C)
durable power of attorney.
D)
living will.
58.
4% rule
A)
A rule in retirement that says only take out 4% of your asset
value each year
B)
Is the expected rate of return on your account prior to
retirement
C)
Doubles money every 5 years
D)
Is the percentage of assets a lawyer gets for writing a will
59.
Estates worth more than _____ are subject to estate taxes.
A)
$500,000
B)
$250,000
C)
$1,500,000
D)
$2,000,000

18. 60.
Collectibles include all of the following except
A)
Stamps
B)
Sports memorabilia
C)
Comic Books
D)
Bonds