Estate Final UVU Flashcards _ Quizlet

Get 3 extra months of Quizlet Plus. Upgrade now Estate Final UVU Leave the first rating Students also viewed Terms in this set (50) Others also viewed these textbooks Search for a textbook or question Anderson's Business Law and the Legal Environment, Comprehensive Volume 23rd Edition • ISBN: 9781305575080 (1 more) David Twomey, Marianne Jennings, Stephanie Greene 372 solutions Estate Planning Chapter 5 23 terms joni_elise Preview Estate Planning Final Exam 1-110 (in ... 110 terms Alexander_Nichols24 Preview Exam 2 ACCT byars 94 terms nathalie_negrey Preview Contracts - 14 terms pll4life6 Although he has a vast fortune, Ricky has decided not to prepare an estate plan because he believes that his surviving family members will divide up his assets appropriately. Which of the following is not a risk associated with failing to plan an estate? A. Ricky's estate could incur excessive transfer taxes. B. Ricky's favorite Corvette may not be transferred to his ex-wife, Carla. C. Ricky's insurance policy on his own life may not be paid out to the named beneficiary. D. Ricky's current wife, Lucille, may not provide for Ricky's children from a previous marriage. The correct answer is c. The proceeds of insurance policies with named beneficiaries pass outside of probate via state contract law. Ricky's failure to plan his estate will not affect his insurance policy. Estate Final UVU 6/16/24, 9:37 PM Estate Final UVU Flashcards | Quizlet https://quizlet.com/607788899/estate-final-uvu-flash-cards/ 1/18

You are opening a new financial planning practice and you would like to put together a team of experts to help your clients. Which of the following groups represents the best team to help your clients? A. Financial planner, CPA, and attorney. B. CPA, psychiatrist, and insurance salesman. C. Financial planner, attorney, and real estate agent. D. Attorney, insurance salesman, and IRS agent. The correct answer is a. The best team for your client would include a financial planner, CPA, and attorney. A licensed insurance specialist is also a good asset to an estate planning team, but the team described in option b is not as good of a team overall as the team in option a. You are a financial planner and you are preparing for a meeting with your new client, Anne. What would you be most likely to ask Anne to bring to the meeting with her? A. Pictures of her children. B. Her parents. C. Any will. D. Sales records for her ex-husband's business. The correct answer is c. You would be most likely to ask Anne to bring any will with her. In addition, you would be likely to request copies of any other estate planning documents as well as tax documents. Elizabeth, who is not a licensed attorney, recently started her own financial planning practice. Which of the following activities would be considered the unauthorized practice of law? A. Preparing a last will and testament for her first client. B. Helping clients to identify their financial planning goals. C. Preparing financial statements for prospective clients. E. Referring clients to her brother, Jack, who happens to be a licensed attorney. The correct answer is a. Only licensed attorneys should prepare last will and testaments for clients. Nellie recently executed a power of attorney giving Jessie the power to perform certain tasks. Which of the following powers given to Jessie would cause the power to be deemed a general power of appointment? A. Nellie gave Jessie the power to use Nellie's money to pay Nellie's creditors. B. Nellie gave Jessie the power to sell and buy property on Nellie's behalf. C. Nellie gave Jessie the power to use Nellie's money to pay Jessie's creditors. D. Nellie gave Jessie the power to make gifts to Nellie's heirs and charities. The correct answer is c. Giving Jessie the power to pay his own creditors creates a general power of appointment over the assets. The other powers do not benefit Jessie and thus do not create a general power of appointment. Estate Final UVU 6/16/24, 9:37 PM Estate Final UVU Flashcards | Quizlet https://quizlet.com/607788899/estate-final-uvu-flash-cards/ 2/18

Kent, age 38, recently came to you for estate planning advice. He has never executed any estate planning documents. During the client interview, you learned that Kent has never been married and has a six-year-old daughter, Kerstin, with his previous girlfriend, Karen. Karen is Kerstin's custodial parent and Kent sees Kerstin every other weekend. While Kent and Karen are cordial, the relationship was recently strained when Karen began dating Kent's business partner, Bobby. Kent is in good health and participates regularly in automobile racing competitions. While Kent often wins in competitions, he has wrecked his car several times and has been seriously injured. Because Kent has had so many wrecks, he invested a majority of his $500,000 net worth in a closely held company to develop a revolutionary steel product that will not bend, crumble or catch fire. Kent and his business partner, Bobby, are sure that all race car companies will buy the steel product because their initial tests established that nine out of ten times a car made with the product that was in a wreck did not even get a dent. Although they plan to take their product to market in a few months, Kent and his partner have had several disagreements. Which of the following statements is true? A. If Kent died today, there would not be any liquidity issues because Kent's share of the closely held company could easily be sold for fair market value. B. Since the value of Kent's net worth is below $5,4910,000, there is no need for estate planning. C. Amounts given to Karen for Kerstin's support are deductible on Kent's income or gift tax return. D. If Kent were to die today, his assets would transfer via state intestacy laws with Kerstin being the most likely heir. The correct answer is d. Since Kent has not executed any estate planning documents, his estate will transfer via state intestacy laws. When an individual is not married, their children are generally the next in line to inherit under state intestacy laws. Option a is incorrect because the ability to quickly sell a closely held business for fair market value is always questionable regardless of how good the products are. Option b is incorrect because Kent's net worth is irrelevant as to whether he needs estate planning. He has a child that needs to be cared for and assets that will need to be transferred, thus he needs estate planning. Option c is incorrect because the amounts given for Kerstin's support are not deductible on the income or gift tax return. Estate Final UVU 6/16/24, 9:37 PM Estate Final UVU Flashcards | Quizlet https://quizlet.com/607788899/estate-final-uvu-flash-cards/ 3/18

John has a general power of appointment over his father's assets. Which of the following is not true regarding such a power? A. John can appoint his father's money to pay for the needs of his father. B. John can appoint money to John's creditors. C. John must only appoint money using an ascertainable standard. D. If John predeceases his father, John's gross estate would include his father's assets even though they had not been previously appointed to John. The correct answer is c. Answers a, b, and d are all true. Because John has a general power of appointment over his father's assets, John may appoint those assets to anyone for any reason and is not limited by an ascertainable standard such as health, education, maintenance, or support. Charlotte is getting ready for her first meeting with her new financial planner, Samantha. What information does Charlotte not need to bring to this meeting? A. Previously filed income tax and gift tax returns. B. A copy of her current will. C. A detailed list of Charlotte's assets and liabilities. D. Charlotte should bring all of the above information to her first meeting with Samantha. The correct answer is d. Charlotte should bring all of this information with her. Claude decides to prepare his will, but does not want to seek the help of an attorney. Claude handwrites all of the provisions of the will and does not have it witnessed by anyone. What type of will does Claude have, if any? A. Holographic. B. Nuncupative. C. Statutory. D. Claude does not have a will. The correct answer is a. A holographic will is one that is handwritten. Answer b is incorrect because a nuncupative will, which is not valid in all states, is an oral will. Answer c is incorrect because a statutory will must generally be prepared by an attorney and must be witnessed. Estate Final UVU 6/16/24, 9:37 PM Estate Final UVU Flashcards | Quizlet https://quizlet.com/607788899/estate-final-uvu-flash-cards/ 4/18

Brett died recently leaving all his assets in a trust for his wife Greer. Brett was concerned that Greer would not be able to manage her money adequately to maintain her standard of living for the rest of her life. Therefore, he placed the assets into a spendthrift trust and gave Greer the right to receive a certain amount of income each year. Brett appointed his good friend Paul to be the trustee of the trust. How is Paul's ownership classified? A. Paul holds a life estate over the property. B. Paul holds the legal title to the property. C. Paul holds the equitable title to the property. D. Paul does not hold an interest in the property. The correct answer is b. Paul holds the legal title to the property as trustee for the trust. Greer as the beneficiary holds the equitable title. A life estate identifies the person who has a current beneficial right in the property, which in this case would be Greer. Sylvia and Rachel own a townhouse together and are not married. Rachel contributed 40% of the purchase price and Sylvia contributed 60% of the purchase price. Each of them has an equal interest in the property. Which of the following are permissible ways they could title the property? Sole Ownership. Tenancy in Common. Joint Tenancy with Rights of Survivorship. Tenancy by the Entirety. Community Property. A. 2 only. B. 2 and 3. C. 1, 3 and 4. D. 2, 3 and 4. E. 2, 3, 4 and 5. The correct answer is b. The property could be titled either as Tenancy in Common or Joint Tenancy with Rights of Survivorship. The property could not be owned at Tenancy by the entirety or Community Property because Sylvia and Rachel are not married. Fee simple sole ownership is not an option either because there is more than one owner. Which of the following states is not a community property state? A. Arizona. B. Idaho. C. Wisconsin. D. Florida. The correct answer is d. All of the other answers name states that are community property states. Estate Final UVU 6/16/24, 9:37 PM Estate Final UVU Flashcards | Quizlet https://quizlet.com/607788899/estate-final-uvu-flash-cards/ 5/18