#1
What is a will?
A legal document that specifies how a person's assets should be distributed after their death.
ExplanationSpecifies asset distribution after death.
#2
Which of the following is not typically a part of estate planning?
Setting up a retirement savings account
ExplanationNot typically included in estate planning.
#3
What is the purpose of estate taxes?
To provide revenue for the government
ExplanationProvides revenue for the government.
#4
What is the primary purpose of estate planning?
To ensure assets are distributed according to one's wishes
ExplanationEnsures assets are distributed as desired.
#5
Which of the following is NOT typically considered part of an estate?
Life insurance policies with named beneficiaries
ExplanationLife insurance policies with named beneficiaries not included.
#6
What is the purpose of a living will?
To specify medical treatments one wishes to receive or not receive if incapacitated
ExplanationSpecifies medical treatment preferences.
#7
What is a revocable trust?
A trust that allows the grantor to modify or terminate it during their lifetime
ExplanationAllows modification or termination during grantor's lifetime.
#8
What does the term 'intestate' mean in estate planning?
Dying without a valid will
ExplanationDying without a valid will.
#9
What is a power of attorney?
A document that designates someone to make financial decisions
ExplanationDesignates someone for financial decisions.
#10
What is a testamentary trust?
A trust that is created through a will and takes effect upon the grantor's death
ExplanationCreated through a will, takes effect after death.
#11
What is the main advantage of a trust over a will?
Trusts avoid the probate process
ExplanationAvoids probate process.
#12
What is the purpose of a life insurance trust?
To avoid estate taxes on life insurance proceeds
ExplanationAvoids estate taxes on life insurance.
#13
What is the purpose of an irrevocable life insurance trust?
To avoid estate taxes on life insurance proceeds
ExplanationAvoids estate taxes on life insurance.
#14
What is the purpose of an estate freeze?
To reduce estate taxes
ExplanationReduces estate taxes.