Practice Test Geeks(AEP) Accredited Estate Planner Practice Test
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Estate Planning Fundamentals Flashcards

7 cards from real AEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Estate Planning Fundamentals flashcards as text

  1. Which document allows an agent to make financial decisions on behalf of a principal even after the principal becomes incapacitated?

    Answer: Durable power of attorney

    A durable power of attorney remains effective upon the principal's incapacity, unlike a standard power of attorney which terminates at incapacity.

  2. What is the primary advantage of a revocable living trust over a will in estate planning?

    Answer: Avoidance of probate

    Assets held in a revocable living trust pass directly to beneficiaries without going through the probate process.

  3. Under the 2017 Tax Cuts and Jobs Act, what happens to the increased federal estate tax exemption after December 31, 2025?

    Answer: It sunsets and reverts to pre-2018 levels adjusted for inflation

    The TCJA's doubled exemption sunsets after 2025, reverting to approximately $5 million (inflation-adjusted) per person.

  4. A testator dies with a will that leaves property to a beneficiary who predeceased the testator. Which doctrine may cause the gift to pass to the deceased beneficiary's descendants instead?

    Answer: Anti-lapse statute

    Anti-lapse statutes in many states save a bequest from lapsing by redirecting it to the deceased beneficiary's descendants.

  5. Which type of property ownership includes a right of survivorship that automatically transfers the deceased owner's interest to surviving owners?

    Answer: Joint tenancy

    Joint tenancy includes the right of survivorship, meaning the deceased joint tenant's share passes automatically to surviving joint tenants.

  6. What is the federal gift tax annual exclusion amount per recipient for 2024?

    Answer: $18,000

    The annual gift tax exclusion increased to $18,000 per recipient in 2024, up from $17,000 in 2023.

  7. Which planning technique involves an elderly parent transferring a home to children while retaining the right to live there for a fixed term?

    Answer: Qualified personal residence trust (QPRT)

    A QPRT allows the grantor to transfer a residence to heirs at a reduced gift tax value while retaining the right to occupy it for a specified term.