HS 330 - Exam 2 Questions With Correct
Answers
Which of the following statements is true regarding the estate planning
team?
a. The advisor should consult with the CPA regarding basis calculations
and tax issues.
b. The advisor should perform all tax calculations and only refer to a
CPA if there is a problem.
c. The CPA should draw up the estate planning documents.
d. An attorney is only necessary if the client needs a power of attorney.
- CORRECT ANSWER✔✔-a. The advisor should consult with the CPA
regarding basis calculations and tax issues.
Explanation: The CPA should perform tax analyses and work with the
advisor to resolve tax issues. That is why statement B is incorrect.
Statement C is incorrect because the attorney should create the estate
planning documents. Statement D is incorrect because an attorney is
needed for all estate planning documents, including the will, trusts, and
advanced medical directives.
,Which of the following tasks could be performed by a financial planner
who is not a licensed attorney or accountant?
a. Drafting wills, trust documents, and powers of attorney
b. Providing complex tax advice on the sale of an asset
c. Assessing the fair market value of a small business
d. Making investment recommendations and assisting with investment
decisions - CORRECT ANSWER✔✔-d. Making investment
recommendations and assisting with investment decisions.
Explanation: The financial planner generally assists in collecting
investment decisions and making recommendations. If the financial
planner is also a licensed attorney or a certified public accountant (CPA),
the financial planner may take on the role of the attorney or CPA as
well.
At the request of her financial advisor, Heba is making a list of her
estate planning goals. She is a 68-year old widow with a net worth is
$24 million. She has 3 adult children and 5 grandchildren. Which of the
following goals would be the least important in developing her estate
plan?
a. To minimize estate and transfer taxes
b. To avoid unnecessary fees and costs
,c. To provide financial support for her children
d. To plan for her incapacity - CORRECT ANSWER✔✔-c. To provide
financial support for her children
Explanation: Providing financial support for children is a critical estate
planning goal for minor children, but takes less importance for adult
children. Options (A), (B), and (D) are all important reasons Heba should
have an estate plan.
Which of the following factors is not a consideration when selecting a
fiduciary?
a. Professional or corporate fiduciaries are the best choice for all
fiduciary roles.
b. Selecting an individual with the right skills, time, and commitment to
perform the duties.
c. Ensuring the fiduciary understands the responsibilities and legal
liability associated with the role.
d. Selecting alternate and successor fiduciaries. - CORRECT
ANSWER✔✔-a. Professional or corporate fiduciaries are the best choice
for all fiduciary roles.
Explanation: The correct answer is (A) because professional fiduciaries
may not be appropriate in all cases. Professional fiduciaries are
, appropriate for assets with significant or complex assets that require
expertise in management. All of the other answer choices are important
considerations for selecting fiduciaries.
Maud is a single 56-year-old woman who owns Shoe Designs, LLC. Her
net worth is about $450,000 and she has not done any estate or
business succession planning. 20 years ago, she had a falling out with
her only daughter, Lena, and they have not had any contact since then.
She has no other family and wants to donate her estate to Blogs for
Dogs, a non-profit dog shelter. Which of the following statements would
be correct if Maud died tomorrow?
a. Finding a successor to take over her business will be a relatively
simple task for her executor.
b. Since she has no close family and her net worth is under the federal
exemption amount, she does not need to do any estate planning.
c. Maud's wish to donate her estate to charity can be accomplished
through the state's intestacy laws.
d. Lena will likely inherit all of Maud's property and no assets will go to
charity. - CORRECT ANSWER✔✔-d. Lena will likely inherit all of Maud's
property and no assets will go to charity.
Explanation: The correct answer is (D). Since Maud has not executed
any estate planning documents, his estate will transfer via state
intestacy laws. When an individual is not married, the individual's
Answers
Which of the following statements is true regarding the estate planning
team?
a. The advisor should consult with the CPA regarding basis calculations
and tax issues.
b. The advisor should perform all tax calculations and only refer to a
CPA if there is a problem.
c. The CPA should draw up the estate planning documents.
d. An attorney is only necessary if the client needs a power of attorney.
- CORRECT ANSWER✔✔-a. The advisor should consult with the CPA
regarding basis calculations and tax issues.
Explanation: The CPA should perform tax analyses and work with the
advisor to resolve tax issues. That is why statement B is incorrect.
Statement C is incorrect because the attorney should create the estate
planning documents. Statement D is incorrect because an attorney is
needed for all estate planning documents, including the will, trusts, and
advanced medical directives.
,Which of the following tasks could be performed by a financial planner
who is not a licensed attorney or accountant?
a. Drafting wills, trust documents, and powers of attorney
b. Providing complex tax advice on the sale of an asset
c. Assessing the fair market value of a small business
d. Making investment recommendations and assisting with investment
decisions - CORRECT ANSWER✔✔-d. Making investment
recommendations and assisting with investment decisions.
Explanation: The financial planner generally assists in collecting
investment decisions and making recommendations. If the financial
planner is also a licensed attorney or a certified public accountant (CPA),
the financial planner may take on the role of the attorney or CPA as
well.
At the request of her financial advisor, Heba is making a list of her
estate planning goals. She is a 68-year old widow with a net worth is
$24 million. She has 3 adult children and 5 grandchildren. Which of the
following goals would be the least important in developing her estate
plan?
a. To minimize estate and transfer taxes
b. To avoid unnecessary fees and costs
,c. To provide financial support for her children
d. To plan for her incapacity - CORRECT ANSWER✔✔-c. To provide
financial support for her children
Explanation: Providing financial support for children is a critical estate
planning goal for minor children, but takes less importance for adult
children. Options (A), (B), and (D) are all important reasons Heba should
have an estate plan.
Which of the following factors is not a consideration when selecting a
fiduciary?
a. Professional or corporate fiduciaries are the best choice for all
fiduciary roles.
b. Selecting an individual with the right skills, time, and commitment to
perform the duties.
c. Ensuring the fiduciary understands the responsibilities and legal
liability associated with the role.
d. Selecting alternate and successor fiduciaries. - CORRECT
ANSWER✔✔-a. Professional or corporate fiduciaries are the best choice
for all fiduciary roles.
Explanation: The correct answer is (A) because professional fiduciaries
may not be appropriate in all cases. Professional fiduciaries are
, appropriate for assets with significant or complex assets that require
expertise in management. All of the other answer choices are important
considerations for selecting fiduciaries.
Maud is a single 56-year-old woman who owns Shoe Designs, LLC. Her
net worth is about $450,000 and she has not done any estate or
business succession planning. 20 years ago, she had a falling out with
her only daughter, Lena, and they have not had any contact since then.
She has no other family and wants to donate her estate to Blogs for
Dogs, a non-profit dog shelter. Which of the following statements would
be correct if Maud died tomorrow?
a. Finding a successor to take over her business will be a relatively
simple task for her executor.
b. Since she has no close family and her net worth is under the federal
exemption amount, she does not need to do any estate planning.
c. Maud's wish to donate her estate to charity can be accomplished
through the state's intestacy laws.
d. Lena will likely inherit all of Maud's property and no assets will go to
charity. - CORRECT ANSWER✔✔-d. Lena will likely inherit all of Maud's
property and no assets will go to charity.
Explanation: The correct answer is (D). Since Maud has not executed
any estate planning documents, his estate will transfer via state
intestacy laws. When an individual is not married, the individual's
