1. Which document allows a person to make healthcare decisions on behalf
of another who is incapacitated?
• A) Last Will and Testament
• B) Healthcare Power of Attorney
• C) Living Trust
• D) Codicil ANSWER : B) Healthcare Power of Attorney
2. The annual gift tax exclusion for 2024 is:
• A) $15,000
• B) $16,000
• C) $17,000
• D) $18,000 ANSWER : D) $18,000
3. Which estate planning tool allows assets to bypass probate?
• A) Simple Will
• B) Revocable Living Trust
• C) Testamentary Trust
• D) Pour-over Will ANSWER : B) Revocable Living Trust
4. The federal estate tax exemption for 2024 is approximately:
• A) $11.7 million
• B) $12.06 million
• C) $12.92 million
• D) $13.61 million ANSWER : D) $13.61 million
5. A codicil is:
• A) A type of trust
• B) An amendment to a will
, • C) A probate document
• D) A tax form ANSWER : B) An amendment to a will
6. Which type of property ownership includes the right of survivorship?
• A) Tenancy in Common
• B) Joint Tenancy
• C) Sole Ownership
• D) Life Estate ANSWER : B) Joint Tenancy
7. The person who creates a trust is called the:
• A) Beneficiary
• B) Trustee
• C) Grantor
• D) Executor ANSWER : C) Grantor
8. A durable power of attorney remains effective:
• A) Only while the principal is competent
• B) Even after the principal becomes incapacitated
• C) Only for financial matters
• D) For a maximum of one year ANSWER : B) Even after the principal
becomes incapacitated
9. Which document expresses a person's wishes regarding end-of-life
medical treatment?
• A) Healthcare Proxy
• B) Living Will
• C) Durable Power of Attorney
• D) Medical Power of Attorney ANSWER : B) Living Will
10. The process of validating a will in court is called:
• A) Administration
• B) Probate
• C) Validation
• D) Adjudication ANSWER : B) Probate
11. An irrevocable trust:
• A) Can be easily modified by the grantor
• B) Cannot be changed once established
, • C) Expires after 21 years
• D) Requires annual court approval ANSWER : B) Cannot be changed
once established
12. The person named in a will to manage the estate is the:
• A) Guardian
• B) Trustee
• C) Executor
• D) Administrator ANSWER : C) Executor
13. Community property states recognize that property acquired during
marriage is owned:
• A) By the person who earned it
• B) Equally by both spouses
• C) By the person whose name is on the title
• D) By the state ANSWER : B) Equally by both spouses
14. A testamentary trust is created:
• A) During the grantor's lifetime
• B) Upon the grantor's death through a will
• C) By court order
• D) Automatically at marriage ANSWER : B) Upon the grantor's death
through a will
15. The unlimited marital deduction allows:
• A) Tax-free transfers between spouses
• B) Unlimited gifts to children
• C) Estate tax exemption for everyone
• D) Probate avoidance ANSWER : A) Tax-free transfers between
spouses
16. A per stirpes distribution means:
• A) Equal distribution to all beneficiaries
• B) Distribution by generation
• C) Distribution only to surviving children
• D) Distribution based on need ANSWER : B) Distribution by
generation
17. The generation-skipping transfer tax applies to transfers:
, • A) Between spouses
• B) To grandchildren or later generations
• C) To charities
• D) Between siblings ANSWER : B) To grandchildren or later
generations
18. A special needs trust is designed to:
• A) Provide for disabled beneficiaries without affecting government
benefits
• B) Pay for college education
• C) Minimize estate taxes
• D) Avoid probate ANSWER : A) Provide for disabled beneficiaries
without affecting government benefits
19. The rule against perpetuities generally limits trust duration to:
• A) 50 years
• B) Lives in being plus 21 years
• C) 100 years
• D) Three generations ANSWER : B) Lives in being plus 21 years
20. A charitable remainder trust provides:
• A) Income to the donor, remainder to charity
• B) Income to charity, remainder to heirs
• C) Tax deductions only
• D) Estate tax exemption ANSWER : A) Income to the donor,
remainder to charity
21. Portability of the estate tax exemption allows:
• A) Transfer of assets without tax
• B) A surviving spouse to use the deceased spouse's unused exemption
• C) Gifts to be made tax-free
• D) Trusts to avoid taxation ANSWER : B) A surviving spouse to use
the deceased spouse's unused exemption
22. An A-B trust is primarily used to:
• A) Avoid probate
• B) Maximize estate tax exemptions for married couples
• C) Provide for minor children
of another who is incapacitated?
• A) Last Will and Testament
• B) Healthcare Power of Attorney
• C) Living Trust
• D) Codicil ANSWER : B) Healthcare Power of Attorney
2. The annual gift tax exclusion for 2024 is:
• A) $15,000
• B) $16,000
• C) $17,000
• D) $18,000 ANSWER : D) $18,000
3. Which estate planning tool allows assets to bypass probate?
• A) Simple Will
• B) Revocable Living Trust
• C) Testamentary Trust
• D) Pour-over Will ANSWER : B) Revocable Living Trust
4. The federal estate tax exemption for 2024 is approximately:
• A) $11.7 million
• B) $12.06 million
• C) $12.92 million
• D) $13.61 million ANSWER : D) $13.61 million
5. A codicil is:
• A) A type of trust
• B) An amendment to a will
, • C) A probate document
• D) A tax form ANSWER : B) An amendment to a will
6. Which type of property ownership includes the right of survivorship?
• A) Tenancy in Common
• B) Joint Tenancy
• C) Sole Ownership
• D) Life Estate ANSWER : B) Joint Tenancy
7. The person who creates a trust is called the:
• A) Beneficiary
• B) Trustee
• C) Grantor
• D) Executor ANSWER : C) Grantor
8. A durable power of attorney remains effective:
• A) Only while the principal is competent
• B) Even after the principal becomes incapacitated
• C) Only for financial matters
• D) For a maximum of one year ANSWER : B) Even after the principal
becomes incapacitated
9. Which document expresses a person's wishes regarding end-of-life
medical treatment?
• A) Healthcare Proxy
• B) Living Will
• C) Durable Power of Attorney
• D) Medical Power of Attorney ANSWER : B) Living Will
10. The process of validating a will in court is called:
• A) Administration
• B) Probate
• C) Validation
• D) Adjudication ANSWER : B) Probate
11. An irrevocable trust:
• A) Can be easily modified by the grantor
• B) Cannot be changed once established
, • C) Expires after 21 years
• D) Requires annual court approval ANSWER : B) Cannot be changed
once established
12. The person named in a will to manage the estate is the:
• A) Guardian
• B) Trustee
• C) Executor
• D) Administrator ANSWER : C) Executor
13. Community property states recognize that property acquired during
marriage is owned:
• A) By the person who earned it
• B) Equally by both spouses
• C) By the person whose name is on the title
• D) By the state ANSWER : B) Equally by both spouses
14. A testamentary trust is created:
• A) During the grantor's lifetime
• B) Upon the grantor's death through a will
• C) By court order
• D) Automatically at marriage ANSWER : B) Upon the grantor's death
through a will
15. The unlimited marital deduction allows:
• A) Tax-free transfers between spouses
• B) Unlimited gifts to children
• C) Estate tax exemption for everyone
• D) Probate avoidance ANSWER : A) Tax-free transfers between
spouses
16. A per stirpes distribution means:
• A) Equal distribution to all beneficiaries
• B) Distribution by generation
• C) Distribution only to surviving children
• D) Distribution based on need ANSWER : B) Distribution by
generation
17. The generation-skipping transfer tax applies to transfers:
, • A) Between spouses
• B) To grandchildren or later generations
• C) To charities
• D) Between siblings ANSWER : B) To grandchildren or later
generations
18. A special needs trust is designed to:
• A) Provide for disabled beneficiaries without affecting government
benefits
• B) Pay for college education
• C) Minimize estate taxes
• D) Avoid probate ANSWER : A) Provide for disabled beneficiaries
without affecting government benefits
19. The rule against perpetuities generally limits trust duration to:
• A) 50 years
• B) Lives in being plus 21 years
• C) 100 years
• D) Three generations ANSWER : B) Lives in being plus 21 years
20. A charitable remainder trust provides:
• A) Income to the donor, remainder to charity
• B) Income to charity, remainder to heirs
• C) Tax deductions only
• D) Estate tax exemption ANSWER : A) Income to the donor,
remainder to charity
21. Portability of the estate tax exemption allows:
• A) Transfer of assets without tax
• B) A surviving spouse to use the deceased spouse's unused exemption
• C) Gifts to be made tax-free
• D) Trusts to avoid taxation ANSWER : B) A surviving spouse to use
the deceased spouse's unused exemption
22. An A-B trust is primarily used to:
• A) Avoid probate
• B) Maximize estate tax exemptions for married couples
• C) Provide for minor children
