Estate Planning: Wills, Trusts, and Powers of Attorney

Question 1

Which of the following is NOT an essential element of a valid will?

Accepted Answer

Notary's seal

Answer

Testator's signature

Answer

Two witnesses

Answer

Statement of intent

Question 2

Which type of power of attorney grants the broadest range of authority?

Accepted Answer

General power of attorney

Answer

Durable power of attorney

Answer

Limited power of attorney

Answer

Springing power of attorney

Question 3

What legal term describes an individual who receives property under a will?

Accepted Answer

Beneficiary

Answer

Executor

Answer

Testator

Answer

Trustee

Question 4

Which of the following is an advantage of creating a living will?

Accepted Answer

Ensuring medical wishes are honored

Answer

Eliminating the need for a legal guardian

Answer

Protecting assets from creditors

Answer

Reducing probate expenses

Question 5

What is the key difference between probate and non-probate wills?

Accepted Answer

Probate wills require court proceedings, while non-probate wills do not

Answer

Non-probate wills are more expensive to create

Answer

Probate wills transfer assets immediately, while non-probate wills do not

Answer

There is no distinction between probate and non-probate wills

Question 6

What is the purpose of a codicil?

Accepted Answer

To modify an existing will

Answer

To draft a new will

Answer

To appoint a guardian for minor children

Answer

To provide instructions for funeral arrangements

Question 7

Which of the following is NOT a method to avoid probate?

Accepted Answer

Purchasing life insurance

Answer

Establishing a living trust

Answer

Utilizing joint ownership

Answer

Naming beneficiaries for retirement accounts

Question 8

Which of the following is NOT a step in the probate process?

Accepted Answer

Creating an estate plan

Answer

Filing a petition with the court

Answer

Appointing an executor or administrator

Answer

Distributing assets to beneficiaries

Question 9

When an individual dies without leaving a will, what are the legal rules that govern the distribution of their assets? Explain the role of the court and the rights of surviving family members.

Accepted Answer

The court appoints an administrator to distribute the assets according to state laws.

Answer

The state automatically takes ownership of the assets.

Answer

Surviving family members have the sole authority to decide how the assets are distributed.

Answer

The assets are divided equally among all surviving family members.

Question 10

Which option is NOT a commonly used estate planning tool?

Accepted Answer

Mortgage

Answer

Will

Answer

Trust

Answer

Power of Attorney

Question 11

What is the primary goal of a will?

Accepted Answer

Distribute assets after death

Answer

Appoint a guardian for minor children

Answer

Control financial matters during incapacity

Answer

Avoid probate

Question 12

Which type of trust allows the grantor to maintain control over their assets?

Accepted Answer

Revocable trust

Answer

Irrevocable trust

Answer

Charitable trust

Answer

Testamentary trust

Question 13

What is the primary purpose of a power of attorney in estate planning?

Accepted Answer

Authorizing an individual to make decisions on behalf of the grantor

Answer

Transferring assets to beneficiaries

Answer

Establishing a trust

Answer

Avoiding tax liabilities

Question 14

What is a codicil?

Accepted Answer

An amendment to a will

Answer

A separate document that complements a will

Answer

A type of trust

Answer

A power of attorney

Question 15

Which legal document specifies how your assets will be distributed after your death?

Accepted Answer

Will

Answer

Trust

Answer

Power of attorney

Answer

Living will

Question 16

What type of trust allows the grantor to retain control of the assets while alive but transfers ownership to a beneficiary upon their death?

Accepted Answer

Revocable living trust

Answer

Irrevocable living trust

Answer

Testamentary trust

Answer

Charitable trust

Question 17

Which legal document grants another person the authority to make decisions on your behalf if you become incapacitated?

Accepted Answer

Power of attorney

Answer

Will

Answer

Trust

Answer

Living will

Question 18

Who is responsible for carrying out the instructions in a will?

Accepted Answer

Executor

Answer

Administrator

Answer

Beneficiary

Answer

Guardian

Question 19

What is the difference between a testamentary trust and an inter vivos trust?

Accepted Answer

An inter vivos trust is created during life, while a testamentary trust is created after death

Answer

A testamentary trust is created during life, while an inter vivos trust is created after death

Answer

There is no difference between the two

Answer

A testamentary trust is irrevocable, while an inter vivos trust is revocable

Question 20

What is the name of the legal process that distributes a person's assets after their death?

Accepted Answer

Probate

Answer

Administration

Answer

Distribution

Answer

Settlement

Question 21

Which of the following is not a type of estate planning tool?

Accepted Answer

Loan agreement

Answer

Will

Answer

Trust

Answer

Power of attorney

Question 22

What is the purpose of a will?

Accepted Answer

To manage your assets after your death

Answer

To appoint a guardian for your children

Answer

To provide for your pets

Answer

To create a trust

Question 23

Who is responsible for carrying out the instructions in a will?

Accepted Answer

The executor

Answer

The beneficiary

Answer

The attorney

Answer

The probate judge

Question 24

What is the difference between probate and non-probate assets?

Accepted Answer

Probate assets are subject to the probate process, while non-probate assets are not.

Answer

Non-probate assets are subject to the probate process, while probate assets are not.

Answer

There is no difference between probate and non-probate assets.

Answer

Probate assets are distributed according to the will, while non-probate assets are distributed according to state law.

Question 25

Which of the following is a benefit of using a power of attorney for health care?

Accepted Answer

It allows you to appoint someone to make medical decisions for you if you are unable to do so yourself.

Answer

It helps you avoid probate.

Answer

It reduces taxes.

Answer

It provides privacy.

Question 26

What is the difference between a revocable and an irrevocable trust?

Accepted Answer

A revocable trust can be changed or terminated at any time, while an irrevocable trust cannot.

Answer

An irrevocable trust can be changed or terminated at any time, while a revocable trust cannot.

Answer

There is no difference between a revocable and an irrevocable trust.

Answer

Both revocable and irrevocable trusts can be changed or terminated at any time.

Question 27

What is the primary purpose of a will?

Accepted Answer

To distribute assets according to specified wishes

Answer

To appoint a guardian for minor children

Answer

To avoid probate

Answer

To establish a trust

Question 28

What is a power of attorney?

Accepted Answer

A legal document that authorizes another person to act on one's behalf

Answer

A contract that transfers ownership of an asset

Answer

A financial instrument that generates income

Answer

A tax-saving strategy

Question 29

Which document specifies the distribution of your assets after your passing?

Accepted Answer

Will

Answer

Trust

Answer

Power of attorney

Answer

Living will

Question 30

A power of attorney enables you to:

Accepted Answer

Delegate financial decision-making authority

Answer

Establish a trust

Answer

Draft your will

Answer

Bypass probate

Question 31

Which legal document outlines the distribution of a person's assets after their death?

Accepted Answer

Will

Answer

Power of attorney

Answer

Trust

Answer

Contract

Question 32

Which of the following is NOT a potential reason to consider estate planning?

Accepted Answer

Avoiding government involvement in asset distribution

Answer

Reducing inheritance taxes

Answer

Preventing family disputes

Answer

Ensuring specific assets go to specific beneficiaries

Question 33

What is the primary responsibility of an executor in estate administration?

Accepted Answer

Managing and distributing assets according to the will

Answer

Challenging the will's validity

Answer

Contesting beneficiary claims

Answer

Determining the value of the deceased's estate

Question 34

Which of the following is NOT considered a core estate planning document?

Accepted Answer

Financial portfolio

Answer

Will

Answer

Trust

Answer

Power of attorney

Question 35

What is the primary purpose of a will?

Accepted Answer

To distribute assets and specify wishes after death

Answer

To appoint a guardian for minor children

Answer

To avoid probate

Answer

To reduce taxes

Question 36

Which type of trust allows the creator to maintain control of assets while alive but transfer ownership upon their passing?

Accepted Answer

Revocable trust

Answer

Irrevocable trust

Answer

Testamentary trust

Answer

Special needs trust

Question 37

What is the legal process of validating a will after the testator's death called?

Accepted Answer

Probate

Answer

Administration

Answer

Distribution

Answer

Settlement

Question 38

Which of the following is **not** a primary estate planning document?

Accepted Answer

Financial plan

Answer

Will

Answer

Power of attorney

Answer

Trust

Question 39

A testamentary trust is created:

Accepted Answer

By a will that takes effect after the death of the grantor

Answer

By a court order after the grantor has become incapacitated

Answer

By a contract that is effective during the grantor's lifetime

Question 40

A durable power of attorney for healthcare:

Accepted Answer

Continues to be effective even if the grantor becomes incapacitated

Answer

Requires the agent to consult with the grantor before making decisions

Answer

Grants the agent authority to make financial decisions only

Question 41

In a joint tenancy, the right of survivorship means that:

Accepted Answer

Upon the death of one joint tenant, the entire property passes to the surviving joint tenant

Answer

The deceased joint tenant's share of the property passes to their heirs

Answer

The property is divided equally among all of the joint tenants

Question 42

A revocable trust:

Accepted Answer

Can be modified or terminated by the grantor at any time

Answer

Is binding on the grantor and cannot be changed

Answer

Only takes effect after the grantor's death

Question 43

Which of the following is **not** a factor to consider when choosing an executor?

Accepted Answer

Age

Answer

Financial responsibility

Answer

Experience managing assets

Question 44

An estate plan should be reviewed and updated:

Accepted Answer

Periodically, or as life circumstances change

Answer

Only once, before it is signed and notarized

Answer

Only after the grantor has reached a certain age

Answer

When major financial events occur, such as a large inheritance

Question 45

Which of the following is a valid reason to contest a will?

Accepted Answer

The testator was not of sound mind when the will was signed

Answer

The testator did not have an attorney present when the will was signed

Answer

The will does not include all of the testator's assets

Question 46

Which legal document outlines the distribution of a person's property after their passing?

Accepted Answer

Will

Answer

Trust

Answer

Power of attorney

Answer

Codicil

Question 47

In a trust, the individual managing the assets for beneficiaries is known as the:

Accepted Answer

Trustee

Answer

Heir

Answer

Executor

Question 48

A durable power of attorney remains valid even if the grantor:

Accepted Answer

Becomes incapacitated

Answer

Revokes it

Answer

Dies

Answer

Moves to a new state

Question 49

The individual responsible for distributing assets according to a will's terms is the:

Accepted Answer

Executor

Answer

Beneficiary

Answer

Administrator

Answer

Trustee

Question 50

Which element is crucial for a legally valid will?

Accepted Answer

Signature

Answer

A specific number of pages

Answer

Notarization

Answer

Two witnesses

Question 51

Intestate succession refers to the distribution of property when an individual:

Accepted Answer

Dies without a will

Answer

Has a trust but no will

Answer

Has a will but no beneficiaries

Answer

Has a will but it is invalid

Question 52

What is a drawback associated with using a will for estate planning?

Accepted Answer

Potential for probate costs and delays

Answer

Lack of privacy

Answer

Limited control over asset distribution

Answer

Increased tax liability

Question 53

A living will:

Accepted Answer

Documents an individual's preferences for end-of-life medical care

Answer

Distributes property after death

Answer

Appoints an executor for a will