Probate vs. Non-Probate Assets: A Comprehensive Guide for Law Students

Question 1

What is the key difference between a will and a living trust?

Accepted Answer

A will takes effect upon death, while a living trust is effective during the settlor's lifetime

Answer

A living trust allows for more privacy than a will

Answer

A will is revocable, while a living trust is revocable under certain circumstances

Answer

A living trust can hold a wider range of assets than a will

Question 2

What is the legal doctrine that governs the distribution of assets when a person dies without a will?

Accepted Answer

Intestacy

Answer

Escheat

Answer

Cy pres

Answer

Probate

Question 3

What is the purpose of a durable power of attorney for health care?

Accepted Answer

To appoint someone to make medical decisions on behalf of the individual

Answer

To manage the individual's finances

Answer

To create a living will

Answer

To distribute assets after the individual's death

Question 4

Which action is typically required in the administration of non-probate assets?

Accepted Answer

Transferring the asset to the designated beneficiary

Answer

Filing a petition to the court

Answer

Obtaining a court order

Answer

Paying taxes on the asset

Question 5

Which of these is NOT a legal requirement for a valid will in the United States?

Accepted Answer

Notarization

Answer

Written form

Answer

Witness signatures

Question 6

Which of the following is a defining characteristic of probate assets?

Accepted Answer

They are subject to the jurisdiction of probate court.

Answer

They are distributed according to the will or intestacy laws.

Answer

They can be transferred without going through probate.

Answer

They are typically held in joint tenancy.

Question 7

What is the difference between an executor and an administrator?

Accepted Answer

An executor is appointed by the will, while an administrator is appointed by the court.

Answer

An administrator is appointed by the will, while an executor is appointed by the court.

Answer

An executor has broader powers than an administrator.

Answer

There is no difference between an executor and an administrator.

Question 8

Distinguish between probate and non-probate assets based on their legal handling and tax implications.

Accepted Answer

Probate assets undergo legal processes and may face tax implications, while non-probate assets typically avoid these complexities.

Answer

Probate assets bypass legal formalities but may face tax implications, while non-probate assets undergo legal processes.

Answer

Probate and non-probate assets are treated identically in terms of legal processes and tax implications.

Answer

Non-probate assets undergo legal processes and face tax implications, while probate assets avoid these complexities.

Question 9

Which of the following is NOT a characteristic of probate assets?

Accepted Answer

They can be transferred without probate upon the owner's death.

Answer

They are subject to formal court proceedings.

Answer

They pass through a will or intestacy laws.

Answer

They may include real estate and bank accounts.

Question 10

Which legal document contains a person's instructions for the distribution of their assets upon death?

Accepted Answer

Will

Answer

Trust

Answer

Codicil

Answer

Estate plan

Question 11

Explain the purpose of requiring a probate bond.

Accepted Answer

To guarantee the executor or administrator will administer the estate ethically and efficiently.

Answer

To compensate the beneficiaries for any losses incurred during probate.

Answer

To cover the expenses associated with probate administration.

Answer

To prevent the executor or administrator from contesting the validity of the will.

Question 12

Define the doctrine of ademption and provide an example of its application.

Accepted Answer

When a specific asset intended to be gifted in a will no longer exists at the testator's death, the gift is considered void.

Answer

When the executor is required to distribute all estate assets equally among the beneficiaries.

Answer

When intestate property is distributed to the closest living relatives of the deceased.

Answer

When the testator is prohibited from disinheriting their spouse, regardless of their wishes.

Question 13

Against which types of assets can creditors make claims during estate administration?

Accepted Answer

Both probate and non-probate assets

Answer

Only probate assets

Answer

Only non-probate assets

Answer

Life insurance proceeds only

Question 14

How are non-probate assets typically distributed?

Accepted Answer

According to the terms of the governing document

Answer

By the will's executor

Answer

Through the probate process

Answer

By the estate administrator

Question 15

Which of the following is an example of a non-probate asset?

Accepted Answer

Revocable living trust

Answer

Funeral expenses

Answer

Intestate share

Answer

Probate estate

Question 16

Which statement accurately describes probate?

Accepted Answer

A court-supervised process for administering a deceased person's estate

Answer

Only applicable to assets owned exclusively by the deceased

Answer

Always required for asset distribution

Question 17

Which factor can significantly impact the duration of the probate process?

Accepted Answer

Estate complexity

Answer

Geographic location of assets

Answer

Age of the deceased

Answer

Availability of legal representation

Question 18

What is the primary purpose of a will?

Accepted Answer

To provide instructions for asset distribution after death

Answer

To legally bind the executor to follow the deceased's wishes

Answer

To serve as a compulsory legal document for all adults

Question 19

What is the legal term for when a person dies without a valid will?

Accepted Answer

Intestacy

Answer

Distribution

Answer

Administration

Answer

Escheat

Question 20

Which of the following assets is NOT subject to probate?

Accepted Answer

Jointly owned property with right of survivorship

Answer

Bank accounts held solely by the decedent

Answer

Stocks held solely by the decedent

Answer

Real property held solely by the decedent

Question 21

Which type of property is typically subject to estate administration and probate?

Accepted Answer

Property owned solely by the decedent

Answer

Property held in a living trust

Answer

Property jointly owned with a right of survivorship

Answer

Property held in a joint tenancy

Question 22

What is a significant advantage of utilizing non-probate assets in estate planning?

Accepted Answer

Avoids the probate process, reducing time and costs associated with estate administration

Answer

Provides greater control over asset distribution

Answer

Increases the value of the estate for tax purposes

Answer

Protects assets from creditors

Question 23

Which of the following is an example of a non-probate transfer?

Accepted Answer

Joint tenancy

Answer

Intestacy

Answer

Will

Question 24

What is the primary purpose of a trust in estate planning?

Accepted Answer

To manage and distribute assets according to the grantor's wishes, even after their passing

Answer

To avoid probate

Answer

To reduce tax liability

Question 25

What is the key distinction between a revocable and an irrevocable trust?

Accepted Answer

Revocable trusts can be modified or terminated by the grantor at any time, while irrevocable trusts cannot be altered once established

Answer

Revocable trusts are more expensive to establish than irrevocable trusts, due to the ongoing need for legal review and potential modifications

Answer

Revocable trusts are taxed differently than irrevocable trusts, affecting the overall tax implications of the estate

Question 26

Which of the following would NOT be considered a non-testamentary disposition?

Accepted Answer

Transfer of property through a will

Answer

Gift during an individual's lifetime

Answer

Joint tenancy

Answer

Trust

Question 27

What is the primary purpose of a probate inventory?

Accepted Answer

To create a comprehensive list of the decedent's assets and liabilities, providing a clear accounting of the estate's financial status

Answer

To determine the validity of the will, ensuring that the document is legally enforceable and符合 the testator's intent

Answer

To distribute the decedent's assets to beneficiaries, following the instructions outlined in the will or according to the laws of intestacy

Question 28

Who is typically responsible for filing a probate inventory?

Accepted Answer

Executor or administrator of the estate, appointed by the court to manage the estate's affairs and ensure proper distribution of assets

Answer

Decedent's heirs, who are entitled to a portion of the estate's assets based on their relationship to the deceased

Answer

Attorney for the beneficiaries, representing the interests of those who will inherit the estate's assets

Answer

Creditor of the estate, seeking to collect any outstanding debts owed by the deceased individual

Question 29

Which of the following assets must go through the probate process to transfer ownership after the owner's death?

Accepted Answer

Probate asset

Answer

Non-probate asset

Answer

Jointly owned asset

Question 30

What is a key feature of a non-probate asset?

Accepted Answer

It passes to beneficiaries outside of the probate process.

Answer

It requires a court order to transfer ownership.

Answer

It is subject to estate taxes.

Question 31

What is the fundamental distinction between probate and non-probate assets?

Accepted Answer

Probate assets require court administration, while non-probate assets do not.

Answer

Probate assets pass to beneficiaries immediately upon the owner's death, while non-probate assets do not.

Answer

Probate assets are subject to estate taxes, while non-probate assets are not.

Question 32

What is the primary responsibility of an executor in the probate process?

Accepted Answer

Overseeing the distribution of the deceased person's assets according to their wishes and the law

Answer

Contesting the validity of the will

Answer

Representing the interests of the beneficiaries

Question 33

What is the central purpose of a will?

Accepted Answer

To distribute property and appoint an executor after the owner's death

Answer

To avoid probate

Answer

To minimize estate taxes

Question 34

Which of the following is NOT a potential benefit of using a revocable living trust?

Accepted Answer

It cannot be easily modified after it is created

Answer

It can avoid probate

Answer

It can provide privacy

Answer

It can reduce estate taxes

Question 35

What is the primary objective of estate administration?

Accepted Answer

Distributing the deceased person's assets according to their wishes and the law

Answer

Paying off the deceased person's debts

Answer

Minimizing estate taxes

Question 36

Which of the following assets is classified as "probate property" and is subject to the probate process?

Accepted Answer

Real estate held solely in the deceased individual's name

Answer

Life insurance policy with a designated beneficiary

Answer

Revocable living trust

Answer

Jointly owned bank account with right of survivorship

Question 37

What is the fundamental purpose of the probate process?

Accepted Answer

To administer the estate of the deceased individual in accordance with their last will and testament or, in the absence of a will, according to state law.

Answer

To distribute assets directly to designated beneficiaries

Answer

To resolve disputes or challenges to the validity of the will

Question 38

What is a key benefit of establishing a revocable living trust?

Accepted Answer

It allows the individual creating the trust (grantor) to maintain control and management of the trust's assets during their lifetime.

Answer

It qualifies for an unlimited marital deduction, reducing estate taxes for married couples.

Answer

It ensures that all assets are exempt from federal and state estate taxes.

Question 39

What is the primary distinction between intestacy and testamentary disposition?

Accepted Answer

Intestacy refers to the distribution of an estate when an individual dies without a valid will, while testamentary disposition refers to the distribution of an estate according to the instructions outlined in a valid will.

Answer

Intestacy follows state laws for asset distribution, whereas testamentary disposition follows the deceased individual's wishes expressed in their will.

Question 40

What is the significance of a properly executed pour-over will in estate planning?

Accepted Answer

It ensures that assets not transferred into a trust during the individual's lifetime are still distributed according to their wishes, as outlined in the will.

Answer

It qualifies the trust for favorable tax treatment under the generation-skipping transfer tax rules.

Question 41

Which of the following factors is generally not relevant when considering the choice between probate and non-probate assets?

Accepted Answer

The size of the estate

Answer

The specific goals and objectives of the individual

Answer

The potential costs associated with probate

Answer

The complexity of the estate's assets and financial arrangements

Question 42

What is a primary advantage of using beneficiary designations for life insurance policies and retirement accounts?

Accepted Answer

Assets with designated beneficiaries generally avoid probate, allowing for a more streamlined and efficient distribution of assets to intended recipients.

Answer

Beneficiary designations provide comprehensive protection against potential claims from creditors.

Answer

Assets with beneficiary designations qualify for a charitable deduction, reducing overall estate taxes.

Question 43

Which of the following is a key characteristic of probate assets?

Accepted Answer

Subject to the probate court's administration and distribution process

Answer

Not subject to creditors' claims

Answer

Automatically transferred to the surviving spouse

Answer

Distributed outside of probate

Question 44

Which of the following is considered a non-probate asset?

Accepted Answer

Life insurance policy with a named beneficiary

Answer

Checking account in the decedent's name

Answer

Stocks held in the decedent's brokerage account

Answer

Real estate owned solely by the decedent

Question 45

What is the fundamental distinction between probate and non-probate assets?

Accepted Answer

Probate assets are subject to probate, while non-probate assets are not

Answer

Probate assets are more valuable than non-probate assets

Answer

Probate assets are owned solely by the decedent, while non-probate assets are jointly owned

Answer

Probate assets are tangible property, while non-probate assets are intangible property

Question 46

When does a revocable living trust become irrevocable?

Accepted Answer

Upon the death of the grantor

Answer

Upon the creation of the trust

Answer

Upon the distribution of assets to beneficiaries

Answer

Upon the appointment of a successor trustee

Question 47

Which of the following is typically NOT considered a probate asset?

Accepted Answer

Joint tenancy property

Answer

Checking account in the decedent's name

Answer

Stocks held in the decedent's brokerage account

Answer

Real estate owned solely by the decedent

Question 48

What is the primary responsibility of the probate court in estate administration?

Accepted Answer

To administer the decedent's estate and distribute assets to beneficiaries in accordance with the will or state law

Answer

To determine the validity of a will

Answer

To resolve disputes among heirs and beneficiaries

Question 49

How does a will generally affect non-probate assets?

Accepted Answer

It has no effect on non-probate assets.

Answer

It can invalidate the non-probate transfer.

Answer

It can change the designated beneficiary of non-probate assets.

Answer

It can convert non-probate assets to probate assets.

Question 50

What is a significant advantage of adopting the Uniform Probate Code (UPC) in estate administration?

Accepted Answer

It streamlines estate administration, reduces probate costs, and provides greater uniformity in the laws governing probate and non-probate assets

Answer

It applies to all states in the United States

Answer

It eliminates the need for probate courts

Question 51

Which of the following factors can affect the tax treatment of non-probate assets?

Accepted Answer

Type of asset, value of the asset, and relationship between the transferor and the recipient

Answer

Location of the asset

Answer

Age of the transferor

Question 52

What is the importance of considering both probate and non-probate assets in estate planning?

Accepted Answer

Ensures efficient and comprehensive distribution of assets and minimization of taxes

Answer

Avoids probate altogether

Answer

Guarantees equal distribution of assets among beneficiaries