Estate Planning Objectives Flashcards
7 cards from real CRPC 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 Objectives flashcards as text
Which estate planning tool allows an individual to transfer assets to a trust during their lifetime while retaining control and avoiding probate?
Answer: Revocable living trust
A revocable living trust is created during the grantor's lifetime, allows the grantor to retain control, and transfers assets outside of probate upon death.
What is the primary purpose of a durable power of attorney in an estate plan?
Answer: To authorize someone to act on your behalf if you become incapacitated
A durable power of attorney remains effective even if the principal becomes incapacitated, allowing the named agent to manage financial affairs.
Under current federal law, the estate tax marital deduction allows a surviving spouse to receive:
Answer: An unlimited amount of assets free of estate tax
The unlimited marital deduction allows a decedent to transfer any amount of property to a surviving U.S. citizen spouse free of federal estate tax.
A QTIP trust (Qualified Terminable Interest Property trust) is most commonly used to:
Answer: Provide income to a surviving spouse while controlling ultimate distribution of assets
A QTIP trust qualifies for the marital deduction, provides income to the surviving spouse, but allows the decedent to direct where the principal passes after the spouse's death.
Which document specifies an individual's wishes regarding medical treatment if they become unable to communicate their decisions?
Answer: Advance healthcare directive (living will)
An advance healthcare directive or living will outlines a person's medical treatment preferences when they cannot speak for themselves.
What is portability in the context of federal estate taxes?
Answer: A surviving spouse's ability to use the deceased spouse's unused estate tax exemption
Portability allows the executor of a deceased spouse's estate to elect to transfer any unused federal estate tax exemption to the surviving spouse.
Which of the following assets typically passes OUTSIDE of probate?
Answer: Life insurance with a named beneficiary
Life insurance proceeds paid to a named beneficiary pass directly to that beneficiary by contract and are not subject to probate.