ESTATE PLANNING ACTUAL EXAM PAPER
2026 QUESTIONS WITH ANSWERS
GRADED A+
◍ What does lack of estate liquidity refer to?.
Answer: Insufficient liquid assets to cover debts, taxes, and expenses after
death.
◍ Who can use a Small Estate Affidavit?.
Answer: The named Executor in a Will, legal heirs, or in some cases,
creditors.
◍ What happens if a client dies intestate?.
Answer: The estate will go through probate court as a default to the system,
following statutory rules of descent and distribution.
◍ What was the Federal Estate Tax threshold in 2017?.
Answer: $5,490,000.
◍ What does the opinion conclude about the necessity of legal expertise for
living trusts?.
Answer: Legal expertise is required for the disposition of property at death
through living trusts.
◍ What are some threats that proper estate planning must address?.
Answer: Federal & State Estate Taxes, Inheritance Taxes, Capital Gains
Tax, Probate, and more.
◍ What is the importance of a Will in estate planning?.
Answer: It serves as a legal document to outline how assets should be
distributed after death.
◍ What is the fifth step in the estate planning process?.
, Answer: Present the recommendations to the client.
◍ What is the first step in the estate planning process?.
Answer: Understand the personal and financial circumstances of the client.
◍ What is a key advantage of Joint Ownership?.
Answer: It avoids probate upon the death of a joint tenant.
◍ What is a 'stepped-up' basis in community property?.
Answer: When one spouse dies, the surviving spouse receives a stepped-up
basis for the entire property, avoiding taxes on appreciation.
◍ What are the benefits of wealth transferred by contract?.
Answer: No probate costs, simple settlement, and a full step up in basis.
◍ What is the difference between community property and common law
property distribution?.
Answer: Community property assumes all assets acquired during marriage
are jointly owned, while common law allows for separate ownership unless
specified otherwise.
◍ What is improper distribution of assets in estate planning?.
Answer: Distributing assets in a way that does not align with the client's
wishes or legal requirements.
◍ What are the two simplified probate procedures mentioned?.
Answer: Summary Administration and Small Estate Affidavit.
◍ What is estate planning?.
Answer: The process of arranging for the management and disposal of a
person's estate during their life and after death.
◍ What is a Remainder Interest?.
Answer: An interest in property that takes effect after the termination of a
prior interest, such as a life estate.
◍ What is tenancy by the entirety?.
Answer: A form of joint ownership available only to married couples, where
each spouse has an equal and undivided interest.
,◍ What is a common estate planning mistake related to business planning?.
Answer: Failure to address business succession and planning needs.
◍ What is community property?.
Answer: Property acquired during marriage that is owned jointly by both
spouses.
◍ What is the general purpose of estate planning?.
Answer: To ensure that a person's assets are distributed according to their
wishes after death and to minimize taxes and probate costs.
◍ What is ancillary probate?.
Answer: A secondary probate process that occurs in a state where the
deceased owned property but was not a resident.
◍ What distinguishes the living trust case from the pension plan case in terms
of UPL?.
Answer: Nonlawyer sellers of living trusts are not held accountable to any
governmental agency.
◍ What are some issues related to life insurance in estate planning?.
Answer: 1) Adequacy of amount, 2) Ownership arrangements, 3)
Beneficiary arrangements, 4) Transfers that can lead to inclusion in gross
estate.
◍ What are capital gains taxes?.
Answer: Taxes on the profit from the sale of an asset, such as real estate or
stocks.
◍ What happened to Jayne Mansfield's estate after her death?.
Answer: Jayne Mansfield's estate was liquidated by debts and litigation,
leaving her children with nothing after ten years.
◍ What should a financial advisor do regarding client fees?.
Answer: The financial advisor should let the lawyer collect fees and
generate documents rather than accepting checks made payable to
themselves.
, ◍ What is the sixth step in the estate planning process?.
Answer: Implement the recommendations made in the estate plan.
◍ What is the role of a CPA in relation to life estates?.
Answer: A CPA can provide guidance on the tax advantages and
implications of deeding property as a life estate.
◍ What is a Voluntary Employee Beneficiary Association (VEBA)?.
Answer: A type of trust that provides employee benefits funded by
contributions from employers and employees.
◍ What is the role of a Certified Estate Planner (CEP) in estate planning?.
Answer: To be the lead professional or 'quarterback' in the estate planning
process.
◍ What does NICEP stand for?.
Answer: National Institute of Certified Estate Planners.
◍ What happens to property acquired by one spouse before marriage in
community property states?.
Answer: It remains separate property.
◍ What is the seventh step in the estate planning process?.
Answer: Monitor progress and update recommendations as necessary.
◍ What is tenancy in common?.
Answer: A form of ownership where two or more individuals hold unequal
shares without automatic transfer upon death.
◍ What is improper titling of assets?.
Answer: Assets are not titled correctly, which can lead to complications in
distribution upon death.
◍ What is a common mistake in estate planning regarding wills?.
Answer: Failure to recommend necessary changes to a will.
◍ Can a Will be contested?.
Answer: Yes, a Will can be contested if heirs disagree with the distribution
2026 QUESTIONS WITH ANSWERS
GRADED A+
◍ What does lack of estate liquidity refer to?.
Answer: Insufficient liquid assets to cover debts, taxes, and expenses after
death.
◍ Who can use a Small Estate Affidavit?.
Answer: The named Executor in a Will, legal heirs, or in some cases,
creditors.
◍ What happens if a client dies intestate?.
Answer: The estate will go through probate court as a default to the system,
following statutory rules of descent and distribution.
◍ What was the Federal Estate Tax threshold in 2017?.
Answer: $5,490,000.
◍ What does the opinion conclude about the necessity of legal expertise for
living trusts?.
Answer: Legal expertise is required for the disposition of property at death
through living trusts.
◍ What are some threats that proper estate planning must address?.
Answer: Federal & State Estate Taxes, Inheritance Taxes, Capital Gains
Tax, Probate, and more.
◍ What is the importance of a Will in estate planning?.
Answer: It serves as a legal document to outline how assets should be
distributed after death.
◍ What is the fifth step in the estate planning process?.
, Answer: Present the recommendations to the client.
◍ What is the first step in the estate planning process?.
Answer: Understand the personal and financial circumstances of the client.
◍ What is a key advantage of Joint Ownership?.
Answer: It avoids probate upon the death of a joint tenant.
◍ What is a 'stepped-up' basis in community property?.
Answer: When one spouse dies, the surviving spouse receives a stepped-up
basis for the entire property, avoiding taxes on appreciation.
◍ What are the benefits of wealth transferred by contract?.
Answer: No probate costs, simple settlement, and a full step up in basis.
◍ What is the difference between community property and common law
property distribution?.
Answer: Community property assumes all assets acquired during marriage
are jointly owned, while common law allows for separate ownership unless
specified otherwise.
◍ What is improper distribution of assets in estate planning?.
Answer: Distributing assets in a way that does not align with the client's
wishes or legal requirements.
◍ What are the two simplified probate procedures mentioned?.
Answer: Summary Administration and Small Estate Affidavit.
◍ What is estate planning?.
Answer: The process of arranging for the management and disposal of a
person's estate during their life and after death.
◍ What is a Remainder Interest?.
Answer: An interest in property that takes effect after the termination of a
prior interest, such as a life estate.
◍ What is tenancy by the entirety?.
Answer: A form of joint ownership available only to married couples, where
each spouse has an equal and undivided interest.
,◍ What is a common estate planning mistake related to business planning?.
Answer: Failure to address business succession and planning needs.
◍ What is community property?.
Answer: Property acquired during marriage that is owned jointly by both
spouses.
◍ What is the general purpose of estate planning?.
Answer: To ensure that a person's assets are distributed according to their
wishes after death and to minimize taxes and probate costs.
◍ What is ancillary probate?.
Answer: A secondary probate process that occurs in a state where the
deceased owned property but was not a resident.
◍ What distinguishes the living trust case from the pension plan case in terms
of UPL?.
Answer: Nonlawyer sellers of living trusts are not held accountable to any
governmental agency.
◍ What are some issues related to life insurance in estate planning?.
Answer: 1) Adequacy of amount, 2) Ownership arrangements, 3)
Beneficiary arrangements, 4) Transfers that can lead to inclusion in gross
estate.
◍ What are capital gains taxes?.
Answer: Taxes on the profit from the sale of an asset, such as real estate or
stocks.
◍ What happened to Jayne Mansfield's estate after her death?.
Answer: Jayne Mansfield's estate was liquidated by debts and litigation,
leaving her children with nothing after ten years.
◍ What should a financial advisor do regarding client fees?.
Answer: The financial advisor should let the lawyer collect fees and
generate documents rather than accepting checks made payable to
themselves.
, ◍ What is the sixth step in the estate planning process?.
Answer: Implement the recommendations made in the estate plan.
◍ What is the role of a CPA in relation to life estates?.
Answer: A CPA can provide guidance on the tax advantages and
implications of deeding property as a life estate.
◍ What is a Voluntary Employee Beneficiary Association (VEBA)?.
Answer: A type of trust that provides employee benefits funded by
contributions from employers and employees.
◍ What is the role of a Certified Estate Planner (CEP) in estate planning?.
Answer: To be the lead professional or 'quarterback' in the estate planning
process.
◍ What does NICEP stand for?.
Answer: National Institute of Certified Estate Planners.
◍ What happens to property acquired by one spouse before marriage in
community property states?.
Answer: It remains separate property.
◍ What is the seventh step in the estate planning process?.
Answer: Monitor progress and update recommendations as necessary.
◍ What is tenancy in common?.
Answer: A form of ownership where two or more individuals hold unequal
shares without automatic transfer upon death.
◍ What is improper titling of assets?.
Answer: Assets are not titled correctly, which can lead to complications in
distribution upon death.
◍ What is a common mistake in estate planning regarding wills?.
Answer: Failure to recommend necessary changes to a will.
◍ Can a Will be contested?.
Answer: Yes, a Will can be contested if heirs disagree with the distribution
