WILLS, TRUSTS AND ESTATES CERTIFICATION EXAMINATION
SAMPLE QUESTIONS AND ANSWERS
Sample Questions provided are for illustrative purposes only, and should not be relied on
as an indication of topics that may be covered on the exam. Likewise, the model
answers provided, while correct at the time the questions were written, may not reflect
current law.
SAMPLE ESSAY QUESTION 1
D’s first wife (S1) died in February 1996. In September 1998, D sold his home and
moved to Naples where he rented a lovely apartment overlooking the Gulf of Mexico while
he contemplated what type of residence he would purchase. D married second wife (S2),
a widow, on December 27, 2006. D died on January 21, 2007. S2 asked you to advise
her of her rights in light of D’s death. You had knowledge of D’s assets because D’s
attorney and you were in the process of negotiating a post nuptial agreement. According
to the schedules that were attached to the draft post nuptial agreement:
D’s assets, with an annual income of $200,000.00:
•
•
•
•
•
•
•
•
•
Annuitized Fixed Joint and Survivor Annuity – purchased in 1993 – D and S1
CRUT established in 1995
S1 Marital Trust #1 funded 11/96
S1 Marital Trust #2 funded 11/96
S1 Family Trust funded 11/96
Social Security - $1,859.00 per month
401(k) D owner; beneficiary designation was S1 and contingent beneficiaries
were D’s descendants, per stirpes – value $500,000.00
D had a revocable trust dated February 6, 1992 that had been funded with
securities valued at $650,000.00 during February – March 1992 and was also
funded with proceeds of sale of his homestead $400,000.00 – October 1998.
No additional assets were placed in the trust subsequent to the homestead
proceeds. The value of the trust was $2,500,000.00. Under the terms of D’s
revocable trust, at D’s death Marital Trust #1 and Marital Trust #2 were set up
for the benefit of S1, and, if she did not survive, all trust assets would be
administered under the terms of the Family Trust for the benefit of D’s
descendants, per stirpes. D’s son (C1), a financial planner was trustee of D’s
Revocable Trust.
D established an Irrevocable Trust in June 1992 which held a $1,000,000.00
life insurance policy that was payable to D’s descendants, per stirpes. The
annual premium was paid to D’s trustee each April in the amount of $40,000.00
by transfers from D.
•
•
D had bank accounts valued at $1,000,000.00, titled in his name, an auto
valued at $22,000.00, furnishings valued at $15,000.00, jewelry valued at
$15,000.00, coin collection valued at $15,000.00 and other tangible personal
property valued at $8,000.00
A judgment against C1, which D had purchased from the initial judgment
creditor a number of years ago. No written evidence of the purchase price can
be found; however, the current payoff on the judgment is $150,000.00.
S2’s annual income of $50,000.00 per year was derived from:
•
•
•
•
Husband 1’s (H1) trust
IRA – (H1)
Social Security - $1,320.00 per month (H1’s) prior to her marriage; since
January 1, her own benefits have been reduced to $750.00 per month
Bank accounts valued at $75,000.00
D’s Will, dated February 6, 1992 devised:
•
•
My tangible personal property to my spouse, S1, if she survives me by thirty
days and if she does not survive me, I leave my tangible personal property to
my descendants, per stirpes.
The remainder of my assets to the trustee of my trust, executed earlier, but on
today’s date.
D also executed a separate writing pursuant to a specific provision in his Will that
left his coin collection to C1 and his jewelry to C2.
C1 has been nominated as personal representative of D’s Will. C1 denies liability
on the judgment claiming that D had forgiven it.
FOR THE PURPOSES OF ANSWERING THIS QUESTION, DISREGARD ALL TAX
ISSUES.
You plan to advise S2 what she, as D’s widow, is entitled to receive and who is
entitled to preference in appointment as personal representative. Accordingly, prepare a
memo of what you will discuss with S2 concerning (a) what she is entitled to receive (b)
what action(s), if any, she must take to receive such benefits and (c) who is entitled to
preference in appointment as personal representative.
SAMPLE ESSAY MODEL ANSWER 1
(a)
1)
S2 is a Pretermitted spouse (732.301.) When a person marries after making
a Will and the spouse survives the testator, the surviving spouse shall receive a share in
the estate of the testator equal in value to that which the surviving spouse would have
received if the testator had died intestate, unless waived by prenuptial or postnuptial,
provided for in will; or will discloses an intention not to make provision for the spouse. The
share of the estate that is assigned to the pretermitted spouse shall be obtained in
accordance with 733.805 (abatement statute)
2)
Intestate Share (732.102(3) If there are surviving lineal descendants of the
decedent, one or more of whom are not lineal descendants of the surviving spouse, which
is the case in this estate, surviving spouse (S2) would be entitled to one-half of the
intestate estate. It appears that the bank accounts valued at $1,000,000.00, titled in D’s
name, an auto valued at $22,000.00, furnishings valued at $15,000.00, coin collection
valued at $15,000.00, other tangible personal property valued at
$8,000.00 and judgment valued at $150,000.00 constitute the probate estate.
3)
4)
Exempt Property (732.402)
2(a)
Household furniture, furnishings & appliances up to net value of
$10,000.00
2(b)
All automobiles
4
Exempt property shall be in addition to protected homestead,
statutory entitlement and property passing by Will or intestate
succession
5
Property specifically devised (jewelry, coin collection) shall not be
included in exempt property
7
Property determined as exempt shall be excluded from the value of
the estate before residuary, intestate, or pretermitted or elective
shares are determined
Family Allowance (732.403) Up to $18,000.00
5)
Elective share (732.201 and 732.2065) 30% of the elective estate. It
appears that the following assets would be available for inclusion:
D’s probate estate (732.2035(1)) Bank accounts valued at $1,000,000.00,
titled in D’s name, an auto valued at $22,000.00, furnishings valued at $15,000.00, other
personal property valued at $8,000.00, the value of the jewelry and coin collection
$30,000.00 and the judgment valued at $150,000.00.
The 401(k) – although S2 was not named as the beneficiary of D’s 401(k)
she was his surviving spouse and it should go to her even though D’s descendants were
named as contingent beneficiaries. The postnuptial agreement had not been signed and
no waiver to benefits from a 401(k) IRA had been processed. S2 will be able to roll over
the 401(k) to her 401(k) or IRA.
The value of the 401(k) would be included in the elective estate even in the
event that the 401(k) was not payable to S1 directly. 732.201(7)
It appears that the following assets would be excluded:
The joint and survivor annuity, CRUT and the benefits from S1’s trusts
(which will be extinguished or payable to others upon D’s death). D’s revocable trust was
created and funded prior to October 1, 1999 and the property was an asset of the trust at
all times between October 1, 1999 and the date of D’s death. D was not married to S 2
when the property was transferred to the trust and the property was a nonmarital asset as
defined in s 61.075 immediately prior to D’s death. 732.2155 (6)(a)(b)(c).
The irrevocable life insurance trust was created prior to October 1, 1999
and was irrevocable at all times until D’s death.732.2155 (6)(a)(b)(c) The only potential
claim that S2 could have regarding the irrevocable trust would be the premium paid within
1 year of D’s death, but this was paid prior to S2’s marriage to D and this claim should fail.
6)
S2 should apply to have her Social Security benefits increased based upon
D’s benefits.
Specific Calculations:
Exempt Property is excluded before elective share or pretermitted spouse
benefits:
Auto
Furnishings
$22,000
10,000
$32,000
$32,000.00
Remaining Assets
Bank Account
$1,000,000
401(k)
500,000
Furnishings
5,000
Personal Property
8,000
Value of jewelry and coin collection 30,000
Judgment
150,000
$1,693,000
Family Allowance – up to
(18,000)
$1,675,000
It appears that S2 would receive 30% of $1,675,000.00 or $502,500.00
under the elective share plus exempt property ($32,000.00) and a Family allowance of up
to $18,000.00. This would be satisfied primarily from the 401(k).
As a Pretermitted Spouse, it appears that S2 would receive 1/2 of
$1,043,000.00 or $521,500.00 (bank account, personal property, value of jewelry and
coin collection, $5,000.00 of furnishings remaining after exempt property) or $71,500.00 +
exempt property ($32,000.00) and a Family Allowance of up to $18,000.00. S2 should
also receive the 401(k) ($500,000.00) because she is D’s surviving spouse and she did
not waive the benefits. Thus, it is to S2 economic benefit to forego filing for an elective
share and file as a pretermitted spouse.
(b)
1)
Exempt Property. S2 would file a petition to determine exempt property
within four months after the date of service of the Notice of Administration or within forty
days from the date of termination of any proceeding involving the construction, admission
to probate or validity of the will. (5.406 and 732.402)
2)
Family Allowance. S2 would file a petition to determine family allowance at
any time during the estate administration. (5.407 and 732.403)
3)
401(k). S2 would execute the documents to claim the 401(k).
4)
Elective Share. S2 would file an election to take elective share within the
earlier of 6 months of the date of election service of a copy of the notice of administration
on her, her attorney in fact or her guardian of the property or two years after the date of
D’s death (unless S2 timely petitions for an extension of time to make such election).
(5.360 and 732.2135)
5)
Pretermitted Spouse. S2 would file a petition to determine share of
pretermitted spouse. (732.301)
(c)
1)
Clearly, C1 has preference in appointment as personal representative as
the person nominated in D’s will. However, if any interested party filed a petition to
remove C1 as personal representative, C1 would either be removed or the court would
appoint an administrator ad litem to deal with the judgment. C1 has a clear and actual
conflict of interest with the estate. (733.301 and 733.504(9); Estate of Gainer (Duncan v.
Davis), 579 So.2d 739 (Fla. 1st DCA 1 9 91); Estate of Bell (Hunter v. Johnson), 573
So.2d 57, 59 (Fla. 1st DCA 1990); Vaughn v. Batchelder, 633 So.2d 526 (Fla. 2d DCA
1994).
Date of question: 2007.
SAMPLE ESSAY QUESTION 2
D dies testate at age 75 owning an IRA. What would be the required beginning
date and the minimum required distribution of the IRA under each of the following
scenarios:
1.
No beneficiary is named for the IRA and D's Will directs outright distribution of
her assets to her four children.
2.
D's Trust is named as beneficiary of the IRA and the Trust directs outright
distribution of all the Trust principal to her four children.
3.
D's Trust is named as the beneficiary of the IRA and the Trust directs that each
child's share be held in a separate Trust for the benefit of each child until the death
of such child.
4.
Each separate Trust for a child created under D's Trust is named as the
beneficiary of 1/4 of the IRA.
SAMPLE ESSAY MODEL ANSWER 2
1.
Answer 1: In PLR 201208039 the IRS ruled that when no beneficiary is named, the
estate of the IRA owner becomes the beneficiary. The estate is deemed a form of
conduit and each child can create a separate IRA and use his or her life expectancy to
determine the minimum required distribution. The separate s hare rule is available
because the transmission of the IRA benefits is through an estate. The required
beginning date would be April I of the year following the year in which D died.
2.
In PLR 201208039 the IRS further ruled that the four children could, under this
scenario, also subdivide the IRA into four equal parts. Because the benefits flowing to
the children come through a Trust rather than directly from the estate, the separate share
rule will not be available, meaning that, while four separate IRA accounts can be
established, the minimum required distribution, which will start on April 1 of the year
following D's death, will be calculated using D's remaining life expectancy.
3.
Separate IRA accounts could be established for each child but the minimum
required distribution will be calculated based on the life expectancy of the oldest child as
the separate share rule is not available to a Trust. The required beginning date would be
April I of the year following the year of D's death.
4.
Because the IRA beneficiary form names each separate Trust created for each of
D's children under the terms of D's Trust, each child will be able to use his or her life
expectancy to determine the minimum required distributions. The required beginning date
would be April 1 of the year following D's death.
Date of question: 2013.
SAMPLE ESSAY QUESTION 3
“D”, a widower, died on May 30, 2004. He was survived by 2 children (C1and C2). (C1
has two children of his own, (G1 and G2). D’s will devises his estate equally to C1 and
C2 and nominates them as his co-Personal Representatives. Among the assets owned
by D at the time of his death were:
A.
A judgment against C1, which D had purchased from the initial judgment creditor
many years before his death. No written evidence of the purchase price can be found.
B.
A note and mortgage executed by C1, encumbering land owned by C, which D
purchased from the initial lender.
C.
A certificate of deposit pledged as security for D’s guaranty of C1’s debt of $10,000
to Creditor. C1 defaulted on the debt and Creditor recovered the $10,000 from the
certificate of deposit.
D.
A parcel of real estate deeded to D by C1 several years before D died. C1 denies
liability on the judgment, note and mortgage claiming that D had forgiven them. C2
further denies any obligation to reimburse the estate for the $10,000 taken by Creditor
from the certificate. C1 also claims the parcel of real estate, arguing that D had not
owned the land individually, but rather had merely held it in trust for C1 in order to shield it
from C1’s creditors. Finally, on May 25, 2005, C1 executed, filed and served a
Disclaimer of his interest in D’s estate. C2 petitions to remove C1 as a co-Personal
Representative of the estate.
Discuss the likely outcome of C2’s petition to remove C1 as co-Personal Representative.
1.
Discuss the merits of C1’s claims that D had forgiven the note, mortgage and
judgment, including evidentiary considerations.
2.
Discuss the merits of C1’s claim that D had owned the realty as trustee for C1,
including evidentiary issues.
3.
After C1’s claims are resolved by settlement, G1 and G2 sue C2 claiming that
because of C1’s Disclaimer, C1’s one-half of the estate should have been distributed to
them. Discuss the merits of their claim.
SAMPLE ESSAY MODEL ANSWER 3
1.
C1 has a clear and actual conflict of interest with the estate and should be
removed. Florida Statutes Section 733.504(9); Estate of Gainer (Duncan v. Davis), 579
So.2d 739 (Fla. 1st DCA 1991); Estate of Bell (Hunter v. Johnson), 573 So.2d 57, 59 (Fla.
1st DCA 1990); Vaughn v. Batchelder, 633 So. 2d 526 (Fla. 2d DCA 1994).
2.
With respect to the judgment, note and mortgage, C1 may be permitted to use
evidence of verbal communications between himself and D to the effect that they had
been satisfied as a gift to him. (Former Dead Person’s Statute, Fla. Stat. 90.602, has
been repealed; See 90.804(2)(e). The hearsay rule may apply however to disqualify the
testimony. If other witnesses heard such communications, the transactions could be
established. C2 should argue that the gifts constituted advancements to C1. West v.
Coogler, 427 So.2d 813 (Fla. 5th DCA 1983).
3.
With respect to the realty, C1’s claim should be denied (in the absence of a written
agreement) even if he can prove, through disinterested witnesses, such a verbal
agreement.
4.
The claims of G1 and G2 should be denied because the Disclaimer was untimely.
(Fla. Stat. Section 732.801). It also appears likely that the Disclaimer was invalid due to
C1’s insolvency at the time he executed it.
Date of question: 2005.
(continued on next page)
SAMPLE MULTIPLE CHOICE QUESTIONS
1.
A Will contestant presents his case for undue influence. At the conclusion of the
presentation of his case, the Judge rules that the Will contestant has created a Carpenter
presumption. The effect of this ruling is that:
a.
The burden of proof shifts to the Will proponent respondent who must prove by the
greater weight of the evidence that the Will is valid.
b.
Will proponent has the duty to come forward with a reasonable explanation for
his/her actions.
c.
Will proponent must prove the validity of the Will by clear and convincing evidence.
d.
The Will must be held invalid.
e.
None of the above.
Answer: b. In Re Carpenter’s Estate, 253 So.2d 697 (Fla. 1971).
Date of question: 2000.
2.
A neighbor (N) of the decedent who loaned some expensive tools to the decedent
and is unable to recover his property from the personal representative, files a claim. After
an objection by the personal representative, N files an independent action. Another friend
(F) knows of the loan and wishes to testify along with N. The personal representative’s
attorney objects to either of them testifying as to oral representations regarding the loan
under the dead person’s statute. Which of the following statements is correct?
a.
The objection is only valid if the estate has not waived the dead person’s statute.
b.
The objection is valid as to both persons.
c.
The objection is not valid as to N, but is valid as to F.
d.
The objection is not valid as to F, but is valid as to N.
e.
The objection is not valid as the dead person’s statute does not apply to a claim for
recovery of property from a personal representative.
Answer: d. Florida Statutes §90.602(1) and §733.702(1).
Date of question: 2000.
3.
Which of the following statements is correct with regard to drafting a lifetime
charitable remainder annuity trust?
a.
The interest retained by the donor must be an annuity of 10% or more of the
initial trust value.
b.
The charitable remainder man may be the trustee.
c.
The donor may retain the power to direct investment.
d.
Multiple income beneficiaries are allowed, but a charity may not be an income
beneficiary.
e.
None of the above.
Answer: b. IRC'664(d)(1): Treas. Reg."1.664-1 and 1.664-2
Date of question: 2003.
4.
Attorney has long relationship with client. Client owns Blackacre and wants to sell
Blackacre to attorney for $20,000.0O. its current fair market value. Attorney wishes to buy
Blackacre from client. Which of the following statements is correct?
A.
Attorney cannot buy Blackacre.
B.
Attorney may buy Blackacre if terms are fully disclosed so it can be reasonably
understood by client, client is given the opportunity to seek independent counsel
and client consents in writing.
C.
Attorney may buy Blackacre only if client retains independent legal counsel to
handle the transaction.
D.
Attorney may buy Blackacre if Blackacre is an insignificant portion of client's
estate.
Answer: b. See Rule 4-1.8.
Date of question: 2003.