CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
CFP 5
True/False Questions
©2014, College for Financial Planning, all rights reserved.
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2
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
Module 1
Estate Planning Process &
Goals
©2014, College for Financial Planning, all rights reserved.
Module 1 True/False
1. Estate planning is the process of planning for the
accumulation, conservation, and distribution of an
estate to most efficiently and effectively accomplish tax
and nontax objectives.
Your answer
Play Jeopardy
music

4
Module 1 True/False
2. Power of appointment” is another term for a power of
attorney.
3. One method of estate transfer during life is by right of
survivorship.
4. A nontax characteristic of the sole ownership form of
property ownership is that it goes through probate.
5. A nontax characteristic of the tenancy by the entirety
form of property ownership is the survivorship rights.
6. The tenancy in common form of property ownership
may serve as an income-splitting device.
5
Module 1 True/False
7. The joint tenancy with right of survivorship form of
property ownership allows tenants to own unequal
shares of an asset.
8. Ron and Marie Woods, husband and wife, want to own
their home so that neither spouse could convey his or
her interest in the property without the consent of the
other. The tenancy in common form of property
ownership would accomplish this goal.
9. Because David Norwood and his brother, George, are
planning to buy a duplex in which each wants to be
assured that his children eventually will inherit ownership
interests, the most appropriate form of property
ownership for them is tenancy in common.
6
Module 1 True/False
10. In a community property state, income earned by
each of the spouses after marriage is considered
community property.
11. In a community property state, property acquired
after marriage and classified as separate pursuant to a
spousal agreement is considered community property.
12. Reinhard and Beverly Schultz invested the proceeds
from the sale of their home in a community property
state into a home in a common law state; thus, for
estate purposes, the new home will be treated as a
community property asset.
7
Module 1 True/False
13. Before their recent move to California, Joseph and
Rose Derby, while married, lived in a common law
state, where they accumulated substantial assets that
they titled in Joseph’s name; for federal estate tax
purposes, the property will be treated as belonging
solely to Joseph.
14. Reducing or freezing the value of assets is not a
method that is commonly used to achieve the goal of
reducing estate taxes.
15. Placing title to property in joint tenancy with right of
survivorship with one’s spouse can accomplish the
goals of avoiding probate and delaying payment of
transfer taxes.
8
Module 1 True/False
16. It is an estate planning mistake not to recommend
that a client who has established a revocable living
trust also make a will.
17. Gathering client data is the first step in the estate
planning process.
9
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
Module 2
Methods of Estate
Transfer at Death
©2014, College for Financial Planning, all rights reserved.
© 2011, College for Financial Planning, all rights reserved.
Module 2 True/False
1. Federal tax law defines what property interests are
included in a decedent’s probate estate.
2. Owning property in joint tenancy with right of
survivorship (JTWROS) is not a will substitute since the
property passes outside of probate.
3. The surviving spouse’s elective share can alter a
decedent’s estate distribution plan.
4. Probate of the decedent’s real property, regardless of
where it is located, must be conducted in the state in
which the decedent was a resident at the time of death.
5. Probate is generally more costly than using will
substitutes.
11
Module 2 True/False
6. An executor is the person who executes a will.
7. Any person can make a valid will.
8. A codicil is an amendment to a will that is executed
separately and that leaves the will otherwise intact.
9. If a decedent’s property does not pass to someone else
by will substitute or under a provision in the decedent’s
will and there are no legal heirs under the applicable
state intestate succession statute, the property escheats
to the state.
12
Module 2 True/False
10. Failing to name contingent beneficiaries for specific
bequests in a will can cause partial intestacy if the will
does not have a residuary clause.
11. The phrase “operation of law” is used to describe a
method of estate transfer in which a contractual
provision, such as that in a pension plan, indicates
who is entitled to receive the asset at another person’s
death.
12. One advantage of all will substitutes is that they are
revocable.
13. Assets transferred by will substitute cannot receive a
stepped-up basis.
13
Module 2 True/False
14. A revocable living trust is the best will substitute for a
person who does not want to make a will, but who
would like to leave all of their assets to multiple
beneficiaries at death.
15. Placing assets in a revocable trust will protect them
from the claims of the grantor’s creditors.
16. Placing assets in joint tenancy with right of
survivorship with a spouse will assure the original
owner that such assets will be available for current
living expenses, if necessary.
14
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
Module 3
The Federal Estate Tax
©2014, College for Financial Planning, all rights reserved.
Module 3 True/False
1. The purpose of the federal transfer tax system is to
tax the gratuitous transfer of wealth at least once
each generation
2. The terms “exemption equivalent” and “applicable
credit amount” mean the same thing.
3. The general valuation principle for the federal estate
tax is the fair market value of the asset as of the
valuation date.
4. Applicable zoning restrictions are a factor to be
considered in valuing real estate for the federal estate
tax.
16
Module 3 True/False
5. A minority discount for estate tax purposes is applicable
only when the decedent owned less than 50% of the
stock of a publicly held corporation.
6. The value of a life insurance policy owned by a
decedent when the insured has not yet died is the face
amount of the policy.
7. If property is owned as tenants by the entirety, a
deceased spouse’s share of the asset is equal to 50% of
its fair market value.
8. Only spouses can own property as tenants by the
entirety and each is deemed to own one-half of the
property.
17
Module 3 True/False
9.
If special use valuation is applicable, all assets in an
estate will be valued at their current use rather than
at their fair market value.
10. A federal estate tax return is due if the value of the
decedent’s gross estate exceeds the applicable
exclusion amount for the year of death.
11. If the alternate valuation date is used, all estate
assets, except those that naturally decline in value
with the passage of time, must be valued as of the
alternate valuation date.
12. The applicable estate tax rate is based in part on a
person’s cumulative lifetime taxable transfers.
18
Module 3 True/False
13. Lifetime taxable transfers are cumulated to ensure that
a decedent’s taxable estate is taxed at the highest
possible marginal rate.
14. A decedent’s gross estate does not include income
earned but not received prior to death.
15. If a decedent owned property only with his spouse as
joint tenants with right of survivorship, the amount of
such property included in the decedent’s gross estate
is determined by the amount each spouse contributed
to its initial purchase.
19
Module 3 True/False
16. If the decedent held a general power of appointment
at death, her gross estate must include the value of
any property subject to the power at death.
17. The value of property excluded from the gross estate
because it is subject to a qualified conservation
easement also can be deducted from the gross estate
to arrive at the taxable estate.
18. If a decedent irrevocably transferred title to an asset
prior to death, such asset never can be included in his
gross estate.
20
Module 3 True/False
19. Property placed in an irrevocable trust during the
lifetime of the grantor will be included in her gross
estate if the grantor retains a right to trust income.
20. Property owned by a decedent at death that has an
encumbrance for which the decedent is not personally
liable, is included in the decedent’s gross estate at the
property’s fair market value less the encumbrance’s
outstanding balance as of the date of death.
21. For property in the gross estate to qualify for the
estate tax marital deduction, it must go to the
decedent’s surviving spouse by a bequest in the
decedent’s will.
21
Module 3 True/False
22. The unlimited marital deduction has abolished the
terminable interest rule.
23. The estate tax charitable deduction is allowed only
when the decedent transfers cash or property to a
qualified charity in a qualifying form.
24. A decedent’s adjusted taxable gifts are added to his
taxable estate to determine his estate’s tax base.
25. The gift-taxes-payable credit is allowed for gift taxes
paid out of pocket by the decedent since 1932.
22
Module 3 True/False
26. The deduction allowed against the federal estate tax
for state death taxes paid by a decedent who died
after 2004 is limited to the lesser of the state death
taxes actually paid or 10% of the taxable estate.
27. The prior transfer credit may be allowed to the estate
of a decedent who dies within 10 years of receiving
property from another decedent.
28. Through an outright gift, a person can reduce his
potential gross estate by more than the value of the
gifted asset.
23
Module 3 True/False
29. A decedent’s gross estate does not include property
passing to the surviving spouse.
30. For federal estate tax purposes, the taxable estate
consists of the gross estate less available deductions,
plus adjusted taxable gifts made after 1976.
31. For federal estate tax purposes, only one-half of the
value of property owned jointly with the surviving
spouse is included in the gross estate of a decedent.
32. The three most powerful tools in dealing with estate
taxes are the marital deduction, the charitable
deduction, and the applicable credit amount.
24
Module 3 True/False
33. The marital deduction prevents the property to which
it is applied from being subject to transfer taxation
when the recipient spouse disposes of the property.
34. The surviving spouse is given power to name the
remaindermen of a power of appointment trust.
35. The surviving spouse must be one of several income
beneficiaries of a QTIP trust.
36. An outright bequest to children is an example of
bypass planning.
25
Module 3 True/False
37. If a decedent leaves a remainder interest in a farm or
personal residence to a qualified charity, the bequest
will always receive an estate tax charitable deduction.
38. For estate tax deduction purposes, in a charitable lead
trust the qualified charity must receive either an
annuity amount or a unitrust amount.
39. Pooled income funds (PIFs) cannot be for a term
certain.
26
Module 3 True/False
40. If one spouse has a gross estate of $10.5 million and
the other a gross estate of $50,000, transfers from
the richer spouse to the poorer that qualify for the
marital deduction can be used to reduce the overall
estate tax on both estates if the DSUEA of the poorer
spouse is not available to the richer spouse.
41. The estate of a decedent who establishes a
testamentary charitable lead trust with his spouse as
the sole remainder beneficiary will be entitled to both
a charitable and a marital estate tax deduction.
27
Module 3 True/False
42. The best testamentary transfer technique to use when
a decedent wants to give a specific asset to a specific
individual, but retain total control of the asset until
death, is either a bequest in a will or a revocable will
substitute.
28
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Financial Planning Process & Insurance
Module 4
The Federal Gift Tax
©2014, College for Financial Planning, all rights reserved.
Module 4 True/False
1. The federal gift tax and federal estate tax are described
as a “unified” tax system because both are administered
by the Internal Revenue Service.
2. A gift may be valued at the date of gift or six months
later.
3. When a donor transfers a partial interest in an asset,
the gift tax value may be the full fair market value of
the entire asset.
4. To receive favorable tax treatment under IRC sections
2701 and 2702 (Chapter 14 rules), any interest retained
by a donor must be a “qualified” interest.
30
Module 4 True/False
5. Only direct transfers of present interests are completed
transfers that are taxable for federal gift tax purposes.
6. If a donor reserves certain powers over property that
has been irrevocably transferred to a donee, what
would otherwise be a completed transfer will be treated
as an incomplete transfer.
7. An important factor in determining the value of gifted
property is the kind of property gifted.
31
Module 4 True/False
8.
Although some financial advisors recommend hiring
an appraiser and filing an informational gift tax return
for gifts of certain property, this is a waste of time and
money if a donor reasonably believes that the
property has a value that is less than the allowable
annual exclusion amount.
9.
The Internal Revenue Code definition of a gift is
narrower than the common law definition of a gift.
10. When a donee chooses not to accept a gift, he or she
may incur a gift tax liability that is apart and separate
from the gift tax liability incurred by the donor.
32
Module 4 True/False
11. If Eileen writes a $9,900 check payable to her
grandson so he can pay his tuition to Regional
College, the gratuitous transfer will not be considered
a gift for federal gift tax purposes.
12. Expenses incurred for prevention of disease are not
medical care payments to a provider that are
exempted from federal gift tax.
13. Gift splitting is an advantage only if the gift is of a
present interest, which would entitle the spouses to
reduce the gift value by up to twice the annual
exclusion amount.
33
Module 4 True/False
14. If Wes creates an irrevocable trust funded with
securities valued at $90,000 that gives his mother a
mandatory income interest with a present value of
$8,000 and gives his daughter a remainder interest
with a present value of $82,000, his taxable gifts on
these transfers will be $90,000 minus two maximum
annual exclusions.
15. If a gift is taxable, it will decrease the applicable credit
amount available to offset tax on transfers at death.
16. A taxable gift can cause an increase in the amount of
tax paid on each dollar for future taxable gifts.
34
Module 4 True/False
17. A completed gift to a donee spouse that qualifies for
the marital deduction eliminates the estate tax on that
property when it passes to a third party at the donee
spouse’s death.
18. The full date-of-death fair market value of the assets
in a qualified terminable interest property (QTIP) trust
for which the QTIP election has been made is
includible in the donee spouse’s gross estate even
though the donee spouse receives only a life income
interest and cannot control who will receive the assets
at his or her death.
35
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
Module 5
Estate Planning Issues
Related to GenerationSkipping Transfer Tax &
Income Tax
©2014, College for Financial Planning, all rights reserved.
Module 5 True/False
1. The GSTT achieves the goal of replacing all lost revenue
when wealth is not transferred at each generational
level.
2. The GSTT is not solely dependent upon the transfer
being to a lineal descendant of a grandparent of the
transferor or the transferor’s spouse or former spouse
who is two generations younger than the transferor (or
the transferor’s spouse or former spouse where
applicable).
3. The time at which the generation-skipping transfer tax
is due can be at the time the donor makes the transfer
or later.
37
Module 5 True/False
4. The generation-skipping transfer tax is integrated with
the federal estate and gift taxes so as to avoid double
taxation.
5. The deceased ancestor skip rule can prevent application
of the GSTT to a transfer.
6. The generation-skipping transfer tax provides an
exemption for each donee.
7. The use of the exemption in the generation-skipping
transfer tax is elective.
8. For an indirect generation-skipping transfer, the return
computing GSTT due will be filed by either a skip party
or a trustee.
38
Module 5 True/False
9.
An example of a generation-skipping transfer is when
the transferor makes an outright gift to her niece.
10. An indirect generation-skipping transfer occurs when
the only transferees with an interest in the transferred
asset are nonskip parties.
11. An example of a direct generation-skipping transfer is
when the transferor establishes and funds a revocable
trust whose only beneficiary is the transferor’s
grandchild.
12. No annual exclusions are allowed in the computation
of the generation-skipping transfer tax.
39
Module 5 True/False
13. Income tax issues related to estate planning can
affect either gain or ordinary income.
14. When gain is realized, it must be recognized
immediately.
15. Common estate planning goals in regard to income
tax are the deferment of the realization and/or
recognition of gain if possible and, if not possible, the
taxation of such gain as long-term versus short-term,
and at as low a rate as possible.
16. Altering the receipt and/or taxation of ordinary income
can have estate as well as income tax consequences.
40
Module 5 True/False
17. The donee of appreciated property that is acquired by
gift has an income tax basis equal to the fair market
value of the property at the time of the gift.
18. There may be no step-up in basis in a reverse gift
situation.
19. Installment reporting of gain is never available if the
installment payments are unsecured.
20. Assets owned by a decedent at death that are
subsequently received as the beneficiary of an estate
are not reportable as ordinary income unless it
constitutes income in respect of a decedent.
41
Module 5 True/False
21. The transfer for value rule applies when assets are
purchased from an estate.
22. An employer that provides group term life insurance
to its employees cannot deduct the premiums paid.
23. A person who holds a general power of appointment
over trust assets may be taxable on trust income.
24. If trust income is or may be used to pay premiums on
insurance on the life of the grantor or the grantor’s
spouse, trust income will be taxed to the trustee.
42
Module 5 True/False
25. The charitable income tax deduction is available only
for taxpayers who itemize deductions and who give an
inter vivos gift of cash or property to a qualified
charity in a qualified form.
43
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
Module 6
Methods of Estate
Transfer During Life
©2014, College for Financial Planning, all rights reserved.
Module 6 True/False
1. An advantage of giving property away during life rather
than at death is that during life the donor can use the
annual exclusion.
2. A disadvantage of giving property away during life rather
than at death is that a gift during life is more private.
3. The donor cannot make a completed gift and still
maintain an interest in or control over the gifted
property.
4. A donor may initiate a reverse gift transaction in an
attempt to get a stepped-up basis on highly appreciated
property.
45
Module 6 True/False
5. The grantor of a trust holds legal title to trust assets.
6. Gifts to a Section 2503(c) trust do not entitle the
grantor to a gift tax annual exclusion.
7. A GRIT and a GRAT are treated differently for gift tax
purposes if the grantor and the remaindermen are
related.
8. One of the primary goals of an ILIT is to keep the life
insurance death benefit from being included in the
grantor’s gross estate.
9. The payments to be made in an installment sale cannot
be secured without losing the right to report gain on the
installment basis.
46
Module 6 True/False
10. The payments to be made in a private annuity will
contain an ordinary income element.
11. One advantage of a sale-leaseback transaction is that
the seller (or a business entity controlled by the seller)
will get an income tax deduction if the property sold is
used in a trade or business.
12. Custodial gifts can be made only to minors.
13. Since the seller in a remainder interest transaction
(RIT) has sold an interest in the asset to another, he
cannot continue to receive all income from the asset.
47
Module 6 True/False
14. One advantage of a Section 2503(c) minor’s trust is
that it allows the grantor to receive an annual
exclusion without having to distribute income or give
the minor a Crummey power.
15. The annuitant in a private annuity transaction will
never have to include any part of the annuity in his or
her gross estate.
16. A sale or gift of out-of-state real property owned
solely by the donor will allow the donor to avoid
ancillary probate of this asset.
17. A sale of income-producing property can be used to
reduce the seller’s gross estate.
48
Module 6 True/False
18. A major problem with closely held businesses is
realizing their “paper value.”
19. In a cross-purchase buy-sell agreement, the business
entity is obligated to purchase a deceased
shareholder’s interest.
20. Realizing the value of a solely owned business may
require changing the form of the business entity.
21. Use of a buy-sell agreement requires an immediate
transfer of an interest in the business to a third party.
49
Module 6 True/False
22. The tax consequences of a buy-sell agreement always
will be based on the purchase price called for by the
agreement.
23. IRC Section 2701 can be applicable to the transfer of
a closely held business interest when the transferor
and transferee are related.
24. Freezing the value of a business entity for estate tax
purposes is achieved in a preferred stock
recapitalization by retaining an ownership interest that
has a fixed liquidation value.
25. One common use of life insurance is as a source of
income replacement when the insured dies.
50
Module 6 True/False
26. Some life insurance policies pay benefits only when
the insured dies, while others allow access to benefits
before the insured dies.
27. In a split-dollar life insurance plan, the employer can
deduct the premium payments it makes.
28. The value of a life insurance policy for gift tax
purposes is its replacement cost.
29. An advantage of second-to-die life insurance is that it
allows the first spouse to die to leave everything to his
or her surviving spouse without creating a liquidity
problem in the surviving spouse’s estate.
51
Module 6 True/False
30. If a client purchases life insurance on his own life
primarily for estate liquidity purposes, the client’s
estate should be made the beneficiary of the policy.
52
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
Module 7
Estate Liquidity &
Postmortem Actions
©2014, College for Financial Planning, all rights reserved.
Module 7 True/False
1. Insufficient liquidity can cause an estate to be smaller
after a decedent’s death than it was immediately before
his or her death.
2. A commonly recommended estate liquidity planning
strategy is to take steps to eliminate all estate
administrative expenses.
3. To determine an estate’s liquidity requires an analysis of
the estate’s current or future potential to meet its cash
requirements.
4. Generally, there is no direct relationship between the
size of an estate and the need for liquidity.
5. Premortem planning has only a negligible, minor role in
liquidity planning.
54
Module 7 True/False
6. Premortem planning focuses primarily on finding
techniques to reduce the cash needs of a deceased’s
estate.
7. One premortem technique for reducing the possible
cash needs of an estate is to make sure that the
decedent’s will has a nonexoneration clause.
8. Often, reducing or eliminating assets—such as
collectibles, rental property, or closely held business
interests—prior to death can enhance an estate’s
liquidity position.
55
Module 7 True/False
9.
The best way to use life insurance to increase the
cash available to an estate is to make the estate the
beneficiary of the life insurance policy.
10. Selling illiquid assets during life can enhance the
liquidity position of an estate in three different ways.
11. If a client has real estate in a state other than his
state of domicile, making sure that this asset is
specifically devised in the client’s will is the best way
to enhance estate liquidity.
12. Qualifying estate assets for the estate tax marital or
charitable deduction can help estate liquidity.
56
Module 7 True/False
13. For estate liquidity purposes, as clients age, they
should be encouraged to move into investments such
as growth stocks that tend to produce a greater return
on their investment because this should increase the
amount of cash available to their estate at their death.
14. An estate’s personal representative (PR) can enhance
liquidity by diligently carrying out his or her duties
under the probate code.
15. Special-use valuation of property in an estate may
decrease the estate tax and requires only that, at the
time of the decedent’s death, the property be held in
a qualified use and pass to a qualified heir.
57
Module 7 True/False
16. When the marginal estate tax rate is lower than the
marginal fiduciary income tax rate, a PR may minimize
the total tax paid by electing to deduct the decedent’s
unreimbursed medical expenses on the estate’s
fiduciary income tax return (Form 1041) rather than
on the estate tax return (Form 760).
17. A personal representative must select the calendar
year in which to report estate income.
58
Module 7 True/False
18. Qualifying for the installment method of paying estate
tax under Section 6166 can reduce the immediate
need for cash but requires that a decedent’s business
be a going concern at the time of the decedent’s
death and organized as a partnership or corporation.
19. If the obligation to pay transfer taxes falls to a
beneficiary receiving any closely held business
interest, the beneficiary may sell all or part of the
business interest received back to the business and
avoid having the amount received from the business
treated as a dividend (that is, as ordinary income).
59
Module 7 True/False
20. The election to report accrued interest on EE or HH
savings bonds on the decedent’s final income tax
return (Form 1040), rather than over time on the
estate’s income tax return (Form 1041), may minimize
the total tax liability of the estate and its beneficiaries.
21. A disclaimer by a surviving spouse within nine months
of the decedent spouse’s death, on the condition that
the surviving spouse retains an income interest in the
property, will not be subject to the federal gift tax.
60
Module 7 True/False
22. Having family members agree to distribute a
decedent’s assets in a way other than according to the
decedent’s will provisions is preferable to a will
contest because it will not adversely affect the estate’s
liquidity position.
23. If a surviving spouse, who is dissatisfied with his or
her share of the estate, elects against the will to take
a statutory percentage of the estate rather than the
amount given under the will, it can have a profound
effect on both the distribution and liquidity of the
estate.
61
Module 7 True/False
24. Claiming statutory rights, such as the homestead and
exempt property allowances or the family allowance,
can have an adverse affect on estate liquidity.
25. An estate that has a closely held partnership business
interest with a value that exceeds 35% of the
decedent’s adjusted gross estate is eligible for a
Section 303 stock redemption.
26. The PR of an estate that is placed in a QTIP trust
should never make the QTIP election for trust assets
that are necessary to allow the decedent to fully use
his or her applicable credit amount.
62
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
Module 8
Estate Planning for
Special Situations:
Incapacity, Family
Arrangements &
Selecting Fiduciaries
©2014, College for Financial Planning, all rights reserved.
Module 8 True/False
1. A person can be legally and/or mentally incompetent.
2. In states that have adopted the Uniform Probate Code
(UPC), a conservator has only equitable title to the
ward’s property.
3. With a durable power of attorney, the authority of the
attorney-in-fact will survive the principal’s death.
4. A revocable living trust is funded only when the grantor
becomes incompetent.
5. If a patient’s desires concerning medical treatment in a
specific situation are known, they generally will be
enforced by courts.
64
Module 8 True/False
6. A living will must be executed according to state
statutes.
7. A person can preplan his or her own funeral.
8. One requirement to qualify for Medicaid nursing home
benefits is that the applicant must require significant
assistance with two or more activities of daily living or
have a very significant need for supervision.
9. A qualified domestic relations order (QDRO) can identify
the nonparticipant spouse as an alternate payee.
65
Module 8 True/False
10. Minor children may be eligible for a Social Security
death benefit if a parent obligated to pay child support
dies.
11. A sprinkle trust requires distribution of trust assets to
beneficiaries in equal amounts.
12. An adopted child cannot be intentionally disinherited.
13. If the donor or decedent is not a U.S. citizen, he or
she is subject to estate and gift taxation on the same
basis as a U.S. citizen only if he or she is a U.S.
resident.
66
Module 8 True/False
14. Gift splitting is allowed if one spouse is a nonresident
alien, and the other spouse is a resident alien.
15. A person in a nontraditional family arrangement must
be particularly careful not to let the laws of intestate
succession govern the distribution of his or her estate.
16. It is more important for unmarried cohabitants to
enter into a property agreement than for a married
couple.
17. A valid will can give property to someone to whom the
testator is neither married nor related.
67
Module 8 True/False
18. In certain states, common law marriages are
recognized between same-sex cohabitants.
19. Joint tenancy with right of survivorship may not be as
useful as tenancy in common as a way to minimize
the estate taxes of unmarried cohabitants.
20. It may be difficult for an unmarried cohabitant to
obtain a life insurance policy on the other cohabitant.
21. An unmarried cohabitant may be refused the right to
visit the other cohabitant who is a patient in a
hospital.
68
Module 8 True/False
22. A fiduciary can have only such powers as are
prescribed in applicable state statutes.
69
CERTIFIED FINANCIAL PLANNER CERTIFICATION
PROFESSIONAL EDUCATION PROGRAM
Estate Planning
CFP 5
True/False Questions
End of Slides
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