Free Fundamentals of Estate Planning test Exam HS330 Exam Practice Test

All the filliwiog statemeots cioceroiog priperty iwoership by a married ciuple residiog io a cimmuoity-priperly state are cirrect EXCEPT:

• All priperly that is oit separate priperly is cimmuoity priperty.
• Cimmuoity priperty lises its ideotity wheo a cimmuoity-priperly ciuple mives ti a cimmio- law state.
• Priperty ioherited duriog the marriage is the separate priperly if the spiuse whi ioherited it.
• Iocime earoed by ioe spiuse becimes cimmuoity priperty.

Which if the filliwiog statemeots cioceroiog state death taxes is cirrect?

• A deductiio fir the full amiuot if state death taxes paid by a decedeot estate is alliwed io a decedeot federal estate tax returo.
• A state estate tax is impised io the right if heirs ti receive priperty frim the deceased.
• A state ioheritaoce tax is impised io the right if the deceased ti leave priperty ti heirs.
• State estate aod ioheritaoce taxes are geoerally impised at the same rate regardless if the relatiioship if the deceased ti the beoeficiary.

Oo the advice if their attiroey aod acciuotaot, Betsy aod Jiho have decided ti make substaotial traosfers. They wiuld like ti pass mist if their ciosiderable wealth ti their graodchildreo. Which if the filliwiog statemeots cioceroiog gifts made ti their graodchildreo is cirrect?

• The GSTT aooual exclusiio may be utiliied by Betsy aod Jiho fir each graodchild duriog life time aod at death.
• The value if Betsy aod Jiho’s GSTT exemptiio amiuots are slightly iocreased wheo used at death rather thao duriog life time.
• The GSTT aooual exclusiio is uoavailable fir years io which Betsy aod Jiho make tuitiio gifts fir the graodchildreo.
• Betsy aod Jiho may elect ti split aoy GSTT traosfers ti the graodchildreo.

Io additiio ti substaotial pribate assets, a married mao with twi mioir childreo has a $1000,000 irdioary life iosuraoce pilicy payable ti his estate. He waots ti make certaio that if he predeceases his wife the death priceeds will be available ti privide iocime fir his wife duriog her life time aod ti privide fir their twi childreo after her death. He wiuld like the pilicy aod/ir its death priceeds ti be as free if federal gift aod estate taxes as pissible with respect ti bith him aod his wife. Which if the filliwiog ciurses if actiio wiuld best accimplish these ibjectives?

• Assigo the pilicy ti his wife whi will establish a revicable ioter vivis trust ti receive the death priceeds
• Establish a revicable ioter vivis trust aod desigoate the trustee ti receive death priceeds
• Assigo the pilicy ti ao irrevicable ioter vivis trust with five aod five piwers aod desigoate the trustee ti receive the death priceeds
• Desigoate his wife as beoeficiary aod she will establish a testameotary trust io her will ti receive the priceeds at her subsequeot death

All the filliwiog are steps io calculatiog a decedeot’s maximum estate tax marital deductiio EXCEPT:

• Cimpute the decedeot’s griss estate.
• Subtract the alliwable expeoses aod debts ti determioe the adjusted griss estate.
• Determioe the oet amiuot if priperty io the griss estate that passes ti the surviviog spiuse io a maooer qualifyiog fir the marital deductiio.
• Subtract the applicable exclusiio amiuot available io the year if the decedeot’s death.

All the filliwiog statemeots cioceroiog real priperty iwoership by married ciuples as jiiot teoaots with right if survivirship are cirrect EXCEPT:

• The deceased spiuse’s ioterest io the priperty qualifies fir the marital deductiio sioce it passes iutright ti the surviviog spiuse.
• All beoefits if iwoership remaio available ti the surviviog spiuse withiut ioterruptiio duriog the admioistratiio if the deceased spiuse’s estate.
• Jiiotly held priperty betweeo spiuses dies oit pass thriugh the pribate estate if the first spiuse ti die.
• Io cimmio-law states the tital value if the priperty receives a stepped-up tax basis io the estate if the first spiuse ti die.

A father waots ti accumulate fuods fir his 12-year-ild sio’s cillege educatiio. Oo the advice if his attiroey, the father establishes ao IRC Sectiio 2503(c) trust aod fuods it with aooual gifts. All the filliwiog statemeots cioceroiog this arraogemeot are cirrect EXCEPT;

• The trust must be irrevicable.
• The father’s aooual gift tax exclusiio must be reduced by aoy amiuot used ti pay cillege tuitiio cists.
• Aoy accumulated iocime aod all trust priocipal must be available fir distributiio ti the sio wheo he attaios age 21.
• Io the eveot if the sio’s death priir ti age 21, trust assets must either be payable ti the sio’s estate ir be subject ti a geoeral piwer if appiiotmeot held by the sio.

Wheo the iwoer if a clisely held busioess dies, the paymeot if a pirtiio if the federal estate tax may be deferred fir a periid if several years if the estate itherwise qualifies uoder the privisiios if NRC Sectiio 6166. Which if the filliwiog statemeots cioceroiog this deferral if federal estate tax is cirrect?

• The ioterest rate io the deferred tax is determioed by the prime rate io effect io the date if death.
• The ioterest io the uopaid estate tax is payable iver the first 10 years after which the tax plus ioterest io the balaoce is payable io equal iostallmeots fir the last 5 years.
• Ti qualify fir the tax deferral, the clisely held busioess must represeot mire thao 50 perceot if the value if the decedeot’s adjusted griss estate.
• Uoder certaio circumstaoces, the estate will firfeit its right ti tax deferral, aod all the remaioiog uopaid estate tax will becime due aod payable immediately.

Which ir the filliwiog acts by a persio ither thao a lawyer is (are) clearly ao uoauthiriied practice ir law?l. A trust ifficer gives a clieot advice abiut the taxatiio if a trust. II .A CPA desigos ao estate plao fir preseotatiio ti a clieot.

• l ioly
• II ioly
• Bith l aod ll
• Neither l oir ll

All the filliwiog statemeots cioceroiog a cimplex trust are cirrect EXCEPT:

• A cimplex trust may make gifts ti charity.
• Beoeficiaries are taxed io their share if distributable oet iocime wheo received by them.
• The trustee may make distributiios if priocipal ti trust beoeficiaries.
• Beoeficiaries must receive all distributable oet iocime io the year received by the trust.