BUSI 223 Quiz 8 solutions complete answers

BUSI 223 Quiz 8 solutions complete answers 

 

Which of the following are considered tax-sheltered annuity plans?

 

If you work after age 65, your Social Security benefit will increase by one-fourth of one percent for each month you delay retirement up until what age?

 

According to the Securities and Exchange Commission, one of the easiest ways to boost your retirement savings is:

 

Sarah Logan is a professor at a public university. Her employer makes nontaxable contributions to a plan in her name and reduces her salary by the same amount. What type of retirement plan does Sarah have?

 

What are the two most popular personal retirement plans?

 

Which one of the following is the most widely used source of retirement income?

 

What is most likely to be an individual’s single biggest asset?

 

Brenda Johnson has used a preprinted form that she got from the internet to create her will. However, she was unhappy with one section of the will and crossed out the parts she didn’t like and hand wrote the changes she wanted. The changes that she made most likely made her will:

 

Which one of the following statements is correct regarding wills?

 

Which of the following would keep you from being an executor of a will?

 

Lucy Kelson has been selected to manage the property under a trust agreement for Rodney Peterson until he reaches the age of 30. Rodney is currently 21. In what capacity would Lucy be acting?

 

A federal tax levied on the value of the inheritance of a deceased person to transmit his or her property and life insurance at death is called a(n) ____________ tax.

 

Benjamin Barry has been named by Katie Anderson to follow her instructions and distribute her assets as she has designated in her will, pay any bills, and collect any money owed to her. To which position has Benjamin been named?

 

George Smith worries that his deteriorating health is going to make him incapacitated and unable to conduct his personal affairs. He wants to grant his nephew, Brandon Smith, the ability to act on his behalf. To do this, what document would he most likely need?

 

Jasmine Smith owns a condo worth $250,000, a car valued at $15,000, and miscellaneous assets worth $7,000. She owes $125,000 on the condo and $10,000 on the car and has no other debts. Her retirement account, in which she is fully vested, contains $28,000 in mutual funds. She was just insured with a $200,000 term life insurance policy. What are her total assets?

 

Jasmine Smith owns a condo worth $335,000, a car valued at $29,500, and miscellaneous assets worth $7,500. She owes $176,000 on the condo and $12,000 on the car and has no other debts. Her retirement account, in which she is fully vested, contains $42,500 in mutual funds. She was just insured with a $510,000 term life insurance policy. What are her total assets?

 

Jasmine Smith owns a condo worth $250,000, a car valued at $15,000, and miscellaneous assets worth $7,500. She owes $190,000 on the condo and $10,000 on the car and has no other debts. Her retirement account, in which she is fully vested, contains $28,000 in mutual funds. She was just insured with a $300,000 term life insurance policy. What are her total liabilities?

 

Jasmine Smith owes $175,000 on her condo and $15,000 on her car and has no other debts. Her net worth is $132,000. What are her total assets?

 

Jasmine Smith owns a condo worth $260,000, a car valued at $25,000, and miscellaneous assets worth $7,500. Her retirement account, in which she is fully vested, contains $27,500 in mutual funds. Her net worth is $165,000. What are her total liabilities? 

 

Ted Riley owns a vehicle worth $37,000 and a home worth $290,000. He has a checking account balance of $400, a savings account balance of $1,200, and a mutual fund worth $83,000. His personal assets are worth $87,000. He still owes $18,500 on his car, $113,000 on his home, and $1,400 on his credit card. What is Ted’s net worth?

 

 

You can depend on your employer’s health insurance plan and Medicare to pay all your medical expenses when you retire.

 

It is vital to engage in basic retirement planning activities throughout your working years.

 

Saving now for the future requires tackling the trade-offs between spending and saving.

 

Only saving now and curtailing current spending can ensure a comfortable retirement later.

 

A successful, happy retirement just doesn’t happen; you have to plan for it.

 

One of the misconceptions about retirement is that your expenses will drop when you retire.

 

You can depend on Social Security and your company pension to pay for your basic living expenses.

 

It is almost certain that your pension benefits will increase to keep pace with inflation.

 

Saving money doesn’t come naturally to many young people.

 

The time to begin saving is when you are young.

 

Inflation increases the purchasing power of your retirement savings.

 

Your assets include everything you own that has value.

 

In a reverse annuity mortgage, a lender uses your house as collateral to buy an annuity for you from a life insurance company.

 

During retirement, you should increase your premium payments by increasing the face value of your life insurance.

 

The current value of your life insurance and pensions are included in your assets.

 

Generally, the current value of your jewelry is not included in your assets.

 

Your mortgage, car payments, credit card balances, and taxes due are all examples of your liabilities.

 

Divorcing couples should pay attention to the tax implications of retirement benefits.

 

The exact amount of money you will need in retirement can be predicted accurately.

 

Your expenses for leisure activities will probably decrease during retirement.

 

Your work-related expenses, such as driving back and forth to work, will be lower or eliminated during retirement.

 

Your federal income taxes will probably be lower during the retirement years.

 

Although medical expenses vary from person to person, they tend to decrease with age.

 

The potential loss of buying power during inflation is what makes it so important to plan ahead for your retirement.

 

Too many people make the move to change housing during retirement without doing enough research.

 

To correctly divide retirement benefits during divorce, a couple needs to create a legal document called a qualified domestic relations order (QDRO).

 

If you think you want to live in another city during retirement, it’s a good idea to plan vacations now in areas you might enjoy later.

 

According to the Social Security Administration, disabled workers represent 15% of those who receive Social Security benefits.

 

Social Security was originally intended to provide 100 percent of retirement income.

 

Most people can qualify for reduced Social Security retirement benefits at age 62.

 

The law exempts all Social Security benefits from federal income taxes.

 

Under a 401(k) plan, your employer makes nontaxable contributions to the plan for your benefit and reduces your salary by the same amounts.

 

In a Roth IRA, contributions are not tax-deductible, but earnings can accumulate tax free.

 

Social Security is a package of protection, providing retirement, survivors’, and disability benefits.

 

Social Security should be the only source of your retirement income.

 

Your Social Security payments will start at age 65 whether you apply for benefits or not.

 

The Social Security office will require you to provide proof of your age.

 

If you work after 65, your Social Security benefits will neither increase nor decrease.

 

Because of longer life expectancies, the full retirement age is greater than age 65 for younger individuals.

 

People born after 1928 need at least 60 quarters of coverage to qualify for Social Security benefits.

 

If you leave the company before you retire, then you have a right to a portion of the benefits under an employer pension plan only if you are vested.

 

Your Social Security benefits may be reduced if you earn above a certain amount a year, depending on your age and the amount you earn.

 

Social Security benefits do not increase even if the cost of living increased during the preceding year.

 

When you change jobs, your 401(k) plan savings can be left with the previous employer’s plan, can be rolled over to the new employer’s plan or to an IRA, or can be cashed out

 

According to the 2015 Trustees Report, Social Security is not sustainable over the long term at current benefit and tax rates.

 

Besides Social Security, the federal government administers several other retirement plans for federal government and railroad employees.

 

Employees who are covered under the Railroad Retirement System are also covered by Social Security.

 

Most employer pension plans are either defined-contribution or defined-benefit plans.

 

Over the last two decades, the defined-benefit plan has continued to grow rapidly while the number of defined-contribution plans has generally dropped.

 

A defined-contribution plan has an individual account for each employee; therefore, these plans are also called individual account plans.

 

Profit-sharing plans and 401(k) plans are examples of defined-contribution plans.

 

If your employer is a tax-exempt institution such as a hospital, university, or museum, the salary reduction plan is called a Section 403(b) plan.

 

If you are a government employee, you may have a Section 457 plan.

 

Money-purchase pension plans, stock bonus plans, profit-sharing plans, 401(k), 403(b) plans, and Section 457 plans are examples of defined-contribution plans.

 

All earnings in a tax-sheltered annuity grow without current federal taxation.

 

The biggest benefit of an IRA lies in its tax-deferred earnings growth; the longer the money accumulates tax deferred, the bigger the benefit.

 

With a defined-contribution plan, the plan document specifies the benefits promised to the employee at the normal retirement age.

 

Because of their actuarial aspects, defined-benefit plans tend to be more-complicated and more expensive to administer than defined-contribution plans.

 

The shift to defined-contribution plans has forced employees to take more responsibility for their retirement.

 

Pension plan portability enables you to carry earned benefits from one employer’s pension plan to another’s when you change jobs.

 

Although the full retirement age is rising, you should still apply for Medicare benefits three months before your 65th birthday.

 

ERISA established the Pension Benefit Guaranty Corporation.

 

The Social Security Administration provides a history of your earnings and an estimate of your future monthly benefits online.

 

Your contribution to a Traditional IRA is fully tax deductible regardless of your earned income.

 

You can borrow from your Roth IRA.

 

You can convert your traditional IRA to a Roth IRA.

 

Under certain circumstances, the Roth IRA allows for penalty-free withdrawals as well as tax-free distributions.

 

The Education IRA was renamed the Coverdell Education Savings Account.

 

You can keep money in most retirement plans indefinitely.

 

The amount of the minimum required distribution from an IRA at age 70½ is based on your life expectancy at the time of the distribution.

 

Whether or not you are covered by a pension plan, you can still make nondeductible IRA contributions.

 

A SEP-IRA plan is simply an individual retirement account funded by the employer.

 

Contributions to a SEP-IRA, which may vary from year to year, are tax deductible and earnings accumulate on a tax-deferred basis.

 

You can put your IRA funds in many kinds of investments, including stock, bonds, mutual funds, real estate, and U.S.-minted gold and silver coins.

 

The average 2016 monthly Social Security benefit for a retired worker is approximately $1,300.

 

Keogh plans can be both defined-contribution and defined-benefit plans.

 

An annuity provides guaranteed income for life.

 

You can only buy an annuity by making periodic payments.

 

The rate of return on annuities is rarely pegged to market rates.

 

Earned interest on annuities accumulates tax free until the annuity payments begin.

 

Annuity payouts may either be a fixed or a variable amount.

 

You can create a “my Social Security” account if you are 18 or older and have a Social Security number, valid e-mail, and U.S. mail address.

 

Immediate annuities provide income payments at once and are usually purchased with a lump-sum payment.

 

The EGTRRA was passed by Congress in 2001 and increased the employee annual contribution limit for employer-sponsored retirement plans.

 

A joint-and-survivor annuity pays its installments until the death of the last designated survivor.

 

With a fixed-dollar annuity, the money you pay is invested in common stocks or other equities.

 

The first step in stretching your retirement income is to make sure you are receiving all the income to which you are entitled.

 

More than half of Americans ages 65 to 74 are still in the workforce.

 

During retirement, as long as you do not earn more than the annually exempt amount through part-time work, your Social Security payments will not be affected.

 

To offset inflation, your retirement assets must earn enough to keep up with, and even exceed, the rate of inflation.

 

For the average individual, which one of the following statements is most likely correct regarding retirement?

 

Which one of the following is a true statement about retirement planning?

 

Which of the following is a true statement about retirement planning?

 

Which statement is most likely correct about retirement planning?

 

Your first step in retirement planning is to:

 

The people who are in the best position to save are:

 

Some retirement planning experts suggest that you start retirement planning while you are:

 

Why is financial planning for retirement vitally important?

 

You can determine your net worth by:

 

When a lender uses your house as collateral to buy an annuity for you from a life insurance company, it is called a reverse annuity mortgage or:

 

You can get a reverse mortgage annuity if:

 

During a divorce, pension benefits are generally divided between the spouses primarily based on the:

 

In a marriage that lasts more than 15 years, there’s generally a ____________ split of the marital assets during a divorce.

 

Which statement is correct regarding retirement living expenses?

 

Which one of the following expenditures for retirees is most likely to increase?

 

Which one of the following expenditures for retirees is most likely to decrease?

 

Which type of housing is preferred by most people who are approaching retirement?

 

Which type of housing is designed to allow people to stay in their homes as they grow older and more frail?

 

Which of the following is a tip from retirement specialists on how to uncover hidden taxes and other costs of a retirement area?

 

Which employer retirement plan specifies the benefits promised to the employee at the normal retirement age?

 

Which federal law sets minimum standards for pension plans in private industry and protects more than 50 million workers?

 

Possible sources of income for many retirees include:

 

Which retirement plan is specifically designed for self-employed individuals and their employees?

 

What type of annuity is generally purchased by people of retirement age?

 

An annuity in which you receive an income for the rest of your life, but no payments are made to anyone after your death is called:

 

Which type of annuity gives more income per dollar of outlay than any other type?

 

Once you retire, which of the following is true about drawing on your savings?

 

Which one of the following is probably the best suggestion for staying within your retirement income?

 

With respect to your federal income taxes, which one of the following may you have to do during retirement, even if you did not have to do so prior to retiring?

 

Which one of the following is a disadvantage associated with Social Security retirement income?

 

Beverly Foster is planning for her retirement. She has determined that her car is worth $10,000, her home is worth $150,000, her personal belongings are worth $100,000, and her stocks and bonds are worth $300,000. She owes $50,000 on her home and $5,000 on her car. What step in the retirement planning process is Beverly completing?

 

Nancy Moore is planning for her retirement. She guesses that by the time she retires, her mortgage will be paid off on her home. She expects she will pay $600 a month on food and that her medical expenses will be $400 a month. She also estimates that she will spend $400 a month on things that she enjoys like traveling, going to concerts, reading and other similar activities. What step in the retirement planning process is Nancy completing?

 

Rebecca Murphy is planning for her retirement. She has done some checking and thinks she will get about $1,025 a month from Social Security. She also thinks her pension plan will pay her about $1,125 per month. In addition, she has some personal retirement accounts that she thinks will pay her $500 per month. What step in the retirement planning process is Rebecca completing?

 

Karen Endicott is planning for her retirement. She knows that after she retires she will no longer need her own single family dwelling. She plans on buying a condominium in Chicago, close to the bus and train line and close to a grocery store. What step in the retirement planning process is Karen completing?

 

Janice Jacobs is planning for her retirement. She knows what assets and liabilities she has now and expects to have in the future. She knows what her spending patterns are likely to be and adjusted them for inflation. She also has identified all of her sources of income after she retires. Now she is sitting down and planning her income and expenses each month. After she has finished this plan, she knows that she has enough income to cover her expected expenses and still have $200 extra each month for emergencies and other unplanned activities. Even with inflation, she thinks she can sustain this plan for approximately 30 years. What step in the retirement planning process is Janice completing?

 

As people reach retirement age, what is the most likely housing choice they would make? Assume they are moving to a new geographic area.

 

If you do not plan to retire early, then when should you apply for Social Security?

 

What happens to your Social Security income if you retire early at age 62 instead of 65?

 

John Carpenter works as a manager of a retail store. His employer has been setting money aside for him each month in the amount of 7 percent of his monthly earnings. What type of retirement plan does John have?

 

As its retirement plan contribution, Aaron Copeland’s employer has been buying shares of the company’s stock for Aaron’s benefit. What type of retirement plan does Aaron most likely have?

 

The contribution Billy Freniere’s employer makes to his retirement plan depends on the profits of the company. What type of retirement plan does Billy have?

 

Ben Carmichael has been making contributions into an individual retirement account for his retirement. His contributions are tax deductible as his employer does not offer a retirement plan. What type of individual retirement account does he have?

 

Jeremiah Brown has been making contributions into an individual retirement account for his retirement. His contributions are not tax deductible but his earnings accumulate tax free. What type of individual retirement account does he have?

 

Bruce Willis has been making contributions into an individual retirement account on behalf of his nonworking wife. What type of individual retirement account is this?

 

Sam Waterston has been making contributions into an individual retirement account to help pay for his children to go to college. Which type of account is he most likely using?

 

At a 3 percent rate of inflation, approximately how many years will it take for prices to double?

 

Which is correct with respect to life expectancy?

 

Which of the following is typically a characteristic of a defined benefit plan?

 

Which of the following is typically a characteristic of a defined contribution plan?

 

Which one of the following is not a typical characteristic of a defined benefit plan?

 

Which one of the following is not a typical characteristic of a defined contribution plan?

 

Which one of the following is not a private source of retirement income?

 

Which of the following is a feature of an Education IRA?

 

Social Security covers approximately what percent of all U.S. workers?

 

The Social Security Administration estimates that what percent of individuals age 65 and older would live in poverty without Social Security benefits?

 

According to the 2017 Trustees Report, in what year is it projected that the funds available for paying Social Security benefits will be exhausted at current benefit and tax rates?

 

If a rollover from a retirement fund or other IRA is not made directly to a similar employer-provided retirement plan or an IRA, there will be a mandatory federal income tax withholding equal to what percent of the taxable distribution?

 

Almost one out of every _____ Americans collect over $900 billion in some kind of Social Security benefit.

 

Up to what percent of your Social Security benefits may be subject to federal income tax?

 

People born after 1928 need at least how many quarters of coverage to qualify for Social Security benefits?

 

The full Social Security benefit for a spouse is what percent of the retired worker’s full benefit?

 

Which of the following is considered a tax-sheltered annuity plan?

 

Your right to at least a portion of the benefits you have accrued under an employer pension plan is called:

 

What percent of the average worker’s preretirement earnings is replaced by Social Security?

 

Considering compounding, for every 10 years you delay before starting retirement, you will need to save _____ times as much each month to catch up.

 

Developing the habit of saving for retirement is easier when you are:

 

Jasmine Smith owns a condo worth $240,000, a car valued at $25,000, and miscellaneous assets worth $7,500. Her retirement account, in which she is fully vested, contains $27,500 in mutual funds. Her net worth is $145,000. What are her total liabilities?

 

Before you get a reverse mortgage of any kind, consider that:

 

 

LIMRA International, a financial services research organization, provides information about estate planning to survivors in the form of a booklet.

 

Estate planning is a definite plan for the administration and disposition of one’s property during one’s lifetime and at one’s death.

 

Estate planning is not an essential part of retirement planning.

 

A large percentage of people do little or nothing to provide for those who will survive them.

 

If you never married, you don’t need to organize your financial affairs.

 

Estate planning is useful only to rich and elderly people.

 

Estate planning is an integral part of financial planning.

 

Most people cannot afford the expense of using trusts.

 

Estate planning includes a subject most people would rather avoid: death-your own or that of your spouse.

 

An estate plan is usually implemented by a will and one or more trust agreements.

 

Millions of nontraditional households have unique estate planning problems.

 

Unmarried couples face formidable retirement and estate planning challenges.

 

Last-minute “death-bed” estate planning may fail to carry out your wishes.

 

When death occurs, proof of claims must be produced or the claims will not be processed.

 

If you die without a valid will, you die intestate.

 

A will is a legal declaration of a person’s mind as to the disposition of his or her property after death.

 

If you die intestate, the state’s law of descent and distribution becomes your will.

 

It is unnecessary to modify your will when you divorce or remarry.

 

If you marry after you have made a will, the will is revoked automatically unless certain conditions are met.

 

If you marry after you have made a will, you are better off drawing a new will to fit your new circumstances.

 

The cost of preparing a will varies from place to place.

 

Generally, the cost of writing a will is more than that for writing a living trust.

 

Probate is a legal procedure of proving a valid or invalid will.

 

You should avoid probate because it is expensive, lengthy, and public.

 

A living trust avoids probate at your death.

 

Another name for an executor is an executrix.

 

Wills have existed for thousands of years; the oldest known will was written by an Egyptian pharaoh in 2448 BC.

 

A simple will creates lower overall taxation for all individuals.

 

A statutory will is one type of formal will.

 

Your executor can be the trust department of a bank.

 

A guardian is a person or an institution that holds property for the benefit of someone else.

 

Making any changes on the face of your will can invalidate it.

 

A codicil is a document that explains, adds, or deletes provisions in your existing will.

 

A prenuptial agreement is a documentary agreement between spouses after marriage.

 

The adjusted gross estate is equal to the gross estate minus debts and costs.

 

Probate is less expensive, quicker, and private than a living trust.

 

The main advantage of the exemption trust will is that it eliminates future taxation of the exemption amount and any growth in it.

 

A formal will may be either typed or on a preprinted form.

 

A beneficiary is a person who has been named to receive property under the will.

 

Joint ownership is a good substitute for a will.

 

The state law sets the fees for executors, whether professionals or friends.

 

If only a few changes are needed in your will, adding a codicil may be the best choice.

 

A living will provides for your wishes to be followed if you become so physically or mentally disabled that you are unable to act on your own behalf.

 

A living will is a good substitute for a traditional will.

 

Most states do not recognize living wills.

 

An ethical will is a way to pass on your values and beliefs to your heirs.

 

Related to the concept of a living will is a durable power of attorney also known as a health care proxy.

 

You can assign a durable power of attorney to anyone you choose.

 

A letter of last instruction can provide your heirs with important information.

 

Your estate consists of everything you own, including interests in trusts and powers of appointment.

 

A trust is a legal arrangement through which a trustee holds your assets for your benefit or that of your beneficiaries.

 

An inter vivos trust is a property management arrangement that you establish while you are alive.

 

A credit-shelter trust is perhaps the most common estate-planning trust.

 

A disclaimer trust is designed for the couple who do not yet have enough assets to need a credit-shelter trust.

 

With a marital-deduction trust, you can leave your spouse any money that doesn’t go into a credit-shelter trust.

 

Perhaps the most popular form of marital trust is the Q-TIP trust.

 

A credit-shelter trust is known as a bypass trust, a “residuary” trust, an A/B trust, or a family trust.

 

A qualified personal residence trust, or QPRT, lets you get your home or vacation home out of your estate.

 

A generation-skipping trust allows people to directly leave a substantial amount of money to their grandchildren.

 

Community property is any property that has been acquired by only one of the spouses during the marriage, but not by gift, devise, bequest or inheritance, or, by the income therefrom.

 

Life insurance may be a reasonable, feasible, and economical means of paying your estate tax.

 

Inheritance taxes are imposed only by the state governments.

 

According to a recent American Association of Retired Persons survey, over 50 percent of Americans age 45 or older have not drawn up a will.

 

A unique feature of a self-declaration trust is that the creator of the trust is also the trustee.

 

Which one of the following statements is true about estate planning?

 

Which is true of estate planning?

 

If you are married, your estate planning involves:

 

Which one of the following statements is correct?

 

Estate planning has two parts. The first part consists of:

 

Estate planning has two parts. The second part of estate planning consists of:

 

In estate planning, if you are married:

 

Which of the following is a part of estate planning?

 

Which of the following is true if you are an unmarried couple?

 

Which of the following is an important document needed for estate planning?

 

Gerry Legere has died without writing a will. What is the legal term for this?

 

Gerald Wilkins owns a home worth $250,000, a car worth $15,000, various investments worth $600,000 and other personal assets worth $25,000. What are these things to Gerald?

 

Joseph Vu has assets worth $1,200,000. He has written a legal document that specifies that these assets be divided equally between his wife and his two sons upon his death. What is this legal document?

 

Grady Perdue has assets worth $1,500,000 and has written a legal document that specifies that all of his money go to his children. After he dies, there is a legal process to determine whether his document specifying how his assets be divided is valid. This is also the legal process by which his executor manages and distributes his property. What is this legal process called?

 

A will is:

 

If you die without a valid will:

 

Which one of the following wills is called an “I love you” will?

 

Which one of the following wills leaves everything to your spouse?

 

Which will is sufficient for most smaller estates?

 

Which one of the following wills automatically leaves one-half of your adjusted gross estate to your spouse?

 

Under what type of will is half of your estate taxed at your death and half at your spouse’s death?

 

Under what type of will does everything pass to your spouse, with the exception of an amount equal to the exemption, which passes into trust?

 

Which type of will allows you to pass to your spouse any amount that satisfies your family objective?

 

A handwritten will is called a:

 

Which will should be written, dated, and signed entirely in your own handwriting?

 

Which one of the following provides for the disposition of your assets and is usually prepared with an attorney’s assistance?

 

Which type of will involves serious risks of invalidity and may be out of date with respect to current law?

 

A person who will follow your instructions specified in your will is called a:

 

You should review your will if:

 

Which document identifies the will being amended, confirms the unchanged sections of the will, and changes a provision(s) in the will?

 

A documentary agreement between spouses before marriage in which one or both parties often waive a right to receive property under the other’s will or under state law is called a:

 

A person who assumes the responsibilities of providing the children with personal care and of managing the estate for them is called a:

 

A person or institution that holds or generally manages property for the benefit of someone else under a trust agreement is called a:

 

A legal document authorizing someone to act on your behalf is called a:

 

Benjamin Wiley is married and has assets totaling $7 million. What type of will would most likely result in the lowest overall amount of federal estate taxes? Assume the exemption amount is $3 million.

 

Matthew Miller has created a will and left everything to his wife Kate. What type of will has he created?

 

Kate Wilson has created a will that leaves one-half of her adjusted gross estate to her husband, Matthew. What type of will has she created?

 

Will Jones has created a will that leaves everything to his wife except an exemption amount of $2 million. This exemption amount passes into a trust. What type of will has Will created?

 

James Fitzwater has created a will that leaves exactly $2 million to his wife in anticipation of her income needs. What type of will has James created?

 

Brenda Johnson has used a preprinted form that she got from a stationery store to create her will. What type of will has she created?

 

Benjamin Barry has been named by Andie Anderson to follow her instructions and distribute her assets as she has designated in her will, pay any bills, and collect any money owed to her. To which position has Benjamin been named?

 

Hugh Bowersox has been selected by Sandra Tyler to assume the responsibility of raising her children and managing her estate for those children if she were to die. In what capacity would Hugh be acting?

 

Lucy Kelson has been selected to manage the trust assets of Rodney Peterson until he reaches the age of 30. Rodney is currently 21. In what capacity would Lucy be acting?

 

George Wade has been selected to receive the assets of his brother Kyle in the event of Kyle’s death. What is George?

 

A legal arrangement through which your assets are held by a trustee for your benefit or that of your beneficiaries is called a:

 

If you establish a ____________ trust, you retain the right to end the trust or change its terms during your lifetime.

 

If you establish a ____________ trust, you cannot change its terms or end it.

 

A ____________ trust is a property management arrangement that you establish while you are alive.

 

A trust established by your will that becomes effective upon your death is called a ____________ trust.

 

Under what type of ownership is the property considered owned 50-50 for estate tax purposes and passed automatically to your spouse at your death?

 

In what type of joint ownership may neither spouse sell the property without the consent of the other?

 

A surgeon, who will soon finish paying off college loans, might want to set up a:

 

In what type of ownership is each individual considered to own a proportionate share for tax purposes with only your share being included in your estate?

 

Gary Ruhle has assets worth $2,400,000. Since he plans to travel and does not want to oversee these assets, he has created a legal arrangement so the assets can be managed by an officer of his local bank. What type of legal arrangement has he likely made?

 

Which of the following would be a benefit of establishing a trust?

 

Sally Forth has a trust that she can end at any time she wants. She has assets in the trust that she thinks she may need to use at a later date. What type of trust does Sally have?

 

A federal tax levied on the right of a deceased person to transmit his or her property and life insurance at death is called a ____________ tax.

 

A tax levied on the right of an heir to receive all or part of the estate and life insurance proceeds of a deceased person is called a ____________ tax.

 

A federal and state tax levied on the privilege of making gifts to others is called a ____________ tax.

 

As of 2016, what is the maximum yearly amount that an individual can give as a gift without incurring gift tax liability or having to report the gift to the IRS?

 

How many months after your death is the federal estate tax due and payable in cash?

 

Gerald Wilkins owns a home worth $250,000, a car worth $15,000, various investments worth $600,000 and other personal assets worth $25,000. He still owes $125,000 on his mortgage and $5,000 on a car loan. The probate and administration costs of his estate are estimated at $5,000. What is his estimated net taxable estate?

 

Advance directives are legal documents that allow you to state what kind of health care you want if you were too ill to speak for yourself. Advance directives most often include which of the following?

 

Maryanne Strothman wants to leave some words of encouragement and spiritual advice to her children to encourage their faith in the event that something happens to her. What type of document would be best for her to prepare?

 

Which of the following is not a true statement about a holographic will?

 

The American Taxpayer Relief Act of 2012 provides a permanent gift and estate tax exemption of how much for individuals?

 

A simple document stating that anything you may have neglected to place in your trust during your lifetime should be placed in it at your death is called a:

 

If your beneficiary is too young or unable to handle money wisely, which kind of trust allows the beneficiary to receive small amounts of money at specified intervals?

 

Which will leaves everything to the spouse?

 

Your executor can be which of the following:

 

Which statement is not true about a formal will?

 

Which statement is not true about an ethical will?

 

Which statement is not true about a letter of last instruction?

 

Which of the following is the most practical first step in estate planning?

 

Which of the following are rules to remember when writing a will?

 

To be valid, a will must:

 

A standard will costs:

 

Which of the following is the creator of a trust?

 

Which of the following is a trust established while you are living and receives your life insurance benefits upon your death and administers them in an agreed-on manner?

 

Which of the following is a trust that shelters valuable assets that you can pass on to your heirs with minimal taxes and lets you receive an annuity for as long as the trust lasts?

 

Which of the following is a trust that pays a specified charity income from a donated asset for a set number of years and then transfers the principal to the donor’s beneficiaries with reduced estate or gift taxes at the end of the term?

 

Why is financial planning for retirement critically important?

 

You can get a reverse annuity mortgage if:

 

Which one of the following expenses for retirees is most likely to increase?

 

Which one of the following expenses for retirees is most likely to decrease?

 

Which retirement plan was specifically developed for self-employed individuals and their employees?

 

An annuity in which payments stop when you die, whether a month or many years after the payout begins is called:

 

Karen Endicott is planning for her retirement She knows that after she retires she will no longer need her own single family dwelling. She plans on buying a condominium in Chicago, close to the bus and train line and close to a grocery store. What step in the retirement planning process is Karen completing?

 

The contribution Billy Foster’s employer makes to his retirement plan depends on the profits of the company. What type of retirement plan does Billy have?

 

Which of the following have formidable retirement-planning challenges?

 

Which of the following is not a variable expense?

 

Which of the following is not true of unforeseen expenses?

 

According to the U.S. Bureau of Labor Statistics, the annual inflation rate in the United States was _______ percent in April 2018.

 

Which of the following is not a question that will help assess your financial condition as you approach retirement?

 

Which one of the following may be either typed or on a preprinted form and is usually prepared with an attorney’s assistance?

 

Which type of will involves serious risks of invalidity that the form is out of date with respect to current law?

 

Which of the following should prompt you to review your will?

 

If both parents die at the same time, a(n) _________ is person who assumes the responsibilities of providing the children with personal care and of managing the estate.

 

A legal document authorizing someone to act on your behalf, if you become ill or incapacitated, is called a:

 

Benjamin Wiley is married and has assets totaling $9 million. What type of will would most likely result in the lowest overall amount of federal estate taxes? Assume the exemption amount is $3 million.

 

Will Jones has created a will that leaves everything to his wife except an exemption amount of $3 million. This exemption amount passes into a trust. What type of will has Will created?

 

A tax levied on an heir to receive all or part of the estate and life insurance proceeds of a deceased person is called a(n) ______ tax.

 

Which of the following is a trust that pays a specified charity income from donated asset for a set number of years and then transfers the principal to the donor’s beneficiaries with reduced estate or gift taxes at the end of the term?

 

Which of the following is not true of a Credit-Shelter trust?

 

Which of the following states the seller must give you a written statement of your right to cancel a deal within three business days if you buy a living trust in your home or somewhere other than the seller’s permanent place of business (say, a hotel seminar)?

 

Which of the following is true of a Testamentary trust?

 

A living will that is valid in 42 states can be downloaded from the Aging with Dignity organization and is called: