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Exam 15: Preserving Your Estate

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Question 41

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The tax base for the transfer tax is:

A) fair market value.
B) book value.
C) tax credit value.
D) net realized value.
E) gross gift value.

F) A) and E)
G) None of the above

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Question 42

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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. [ A living will | An ethical will ] includes a personal statement of your values, blessings, life's lessons, and hopes and dreams for the future.

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Question 43

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A document that precisely states the treatments a person wants if he or she becomes terminally ill is called a(n) :

People planning means anticipating the needs of loved ones and providing enough financial resources to ensure a continuation of their way of life.

Estate planning requires the knowledge of wills, trusts, and taxes.

A will can be revoked by the testator only.

The primary taxes to consider in estate planning are the income tax, the gift tax, and the estate tax.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Mike and Tristan, father and son, own property as tenants in common. Tristan [ can | cannot ] write a valid will leaving his part of this property to his friend Joe.

Which of the following statements about the review of estate plans is true?

The primary purpose of life insurance is to replace lost income upon the death of the insured or to provide cash to pay a transfer tax at death and other end of life expenses.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Through a [ living will | durable power of attorney for health care ], you authorize an individual to make health care decisions for you if you are unable to do so.

You could give an unlimited amount of property to your _____ without incurring any gift taxes.

If the ownership of a closely held company is less than 50% of the outstanding stock, then the ownership is termed a: