Accredited Estate Planner (AEP®) Exam — Questions and Answers

Question 1: Which quality improvement method is most applicable to regulatory compliance & ethics in Accredited Estate Planner?

Plan-Do-Check-Act (PDCA) continuous improvement cycle (Correct answer)
Making changes only when mandated by regulators
Ignoring feedback and maintaining status quo
Implementing changes without measuring outcomes

Correct answer: Plan-Do-Check-Act (PDCA) continuous improvement cycle

The PDCA cycle is widely recognized as the most effective quality improvement method, allowing AEP professionals to systematically improve regulatory compliance & ethics practices.

Question 2: A Charitable Lead Annuity Trust (CLAT) differs from a Charitable Remainder Annuity Trust (CRAT) primarily in that:

A CLAT provides the annuity stream to the charity first, with the remainder passing to heirs (Correct answer)
A CLAT must be funded only with cash, not appreciated property
A CLAT requires the grantor to be at least 60 years old
A CLAT eliminates all estate taxes on the transferred assets

Correct answer: A CLAT provides the annuity stream to the charity first, with the remainder passing to heirs

In a CLAT, the charitable organization receives the annuity payments for the trust term, and any remainder passes to the grantor's heirs—opposite of a CRAT's structure.

Question 3: Under the special use valuation rules of IRC §2032A, qualifying real property used in a farm or closely held business can be reduced in value by a maximum of:

$750,000
$1,390,000 (2024 indexed amount) (Correct answer)
$2,000,000
$500,000

Correct answer: $1,390,000 (2024 indexed amount)

IRC §2032A permits qualifying real property to be valued at its actual use rather than highest-and-best use, with the reduction capped at an annually indexed amount (approximately $1,390,000 in 2024).

Question 4: Which type of property ownership includes a right of survivorship that automatically transfers the deceased owner's interest to surviving owners?

Joint tenancy (Correct answer)
Community property
Tenancy by the entirety
Tenancy in common

Correct answer: Joint tenancy

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

Question 5: When implementing regulatory compliance & ethics practices, what should a AEP professional prioritize first?

Speed of completion over thoroughness
Cost reduction at all levels
Compliance with established standards and protocols (Correct answer)
Personal convenience and efficiency

Correct answer: Compliance with established standards and protocols

Compliance with established standards and protocols must be the first priority, as it ensures safety, quality, and legal adherence in professional practice.

Question 6: What is the purpose of naming a beneficiary on a life insurance policy?

To bypass the court process upon death. (Correct answer)
To transfer ownership to the insurer.
To cancel the policy on death.
To avoid paying premiums.

Correct answer: To bypass the court process upon death.

The purpose of naming a beneficiary on a life insurance policy is to bypass the court process upon death. When a beneficiary is designated, the death benefit is paid directly to that individual or entity, outside of the probate process. This ensures a quicker and more private distribution of funds to your chosen recipients.

Question 7: What is a common challenge professionals face when applying regulatory compliance & ethics principles in Accredited Estate Planner?

Having too much support from colleagues
Balancing theoretical knowledge with practical application (Correct answer)
Excessive simplicity of industry regulations
Lack of any professional development opportunities

Correct answer: Balancing theoretical knowledge with practical application

Balancing theoretical knowledge with practical application is a well-recognized challenge, as real-world scenarios often present complexities not covered in standard training.

Question 8: How should a AEP professional handle a situation where financial analysis & reporting protocols conflict with practical constraints?

Make a unilateral decision without consultation
Avoid addressing the conflict entirely
Document the conflict and seek guidance from appropriate authorities (Correct answer)
Always ignore the protocols in favor of practicality

Correct answer: Document the conflict and seek guidance from appropriate authorities

When protocols conflict with practical constraints, the professional approach is to document the conflict and seek guidance, ensuring transparency and compliance while working toward a resolution.

Question 9: Which of the following is true about marital deductions in estate planning?

They allow unlimited transfers between spouses (Correct answer)
They are limited to non-citizens.
They are capped at $1 million.
They apply only to siblings.

Correct answer: They allow unlimited transfers between spouses

The unlimited marital deduction is a fundamental principle in U.S. estate and gift tax law. It allows spouses to transfer an unlimited amount of assets to each other, either during their lifetime or at death, without incurring federal gift or estate tax. This deduction is designed to ensure that married couples can manage their assets without immediate tax implications, deferring any potential estate tax until the death of the surviving spouse.

Question 10: A fiduciary learns that a beneficiary plans to use a trust distribution to fund an illegal activity. What is the most appropriate response?

Seek legal counsel and potentially withhold distribution pending court guidance (Correct answer)
Distribute the funds as required by the trust terms regardless
Immediately terminate the trust to avoid liability
Distribute to a different beneficiary instead

Correct answer: Seek legal counsel and potentially withhold distribution pending court guidance

A fiduciary faced with distributions that may facilitate illegal activity should seek legal counsel and may petition the court for instructions rather than distributing or unilaterally withholding funds.

Question 11: A deferred compensation plan funded by a business for a key owner-employee who has an estate planning concern should typically be structured as a:

Qualified pension plan to maximize creditor protection
Roth IRA for tax-free growth
Non-qualified deferred compensation plan to control timing of inclusion in the taxable estate (Correct answer)
SIMPLE IRA for ease of administration

Correct answer: Non-qualified deferred compensation plan to control timing of inclusion in the taxable estate

A non-qualified deferred compensation plan allows flexible structuring to defer income recognition and coordinate estate inclusion, though it remains subject to creditor claims as an unfunded obligation.

Question 12: Which business succession vehicle allows a parent to transfer a family business to children while retaining an income stream and minimizing gift tax?

Charitable Lead Annuity Trust (CLAT)
Grantor Retained Annuity Trust (GRAT)
Intentionally Defective Grantor Trust (IDGT) with installment sale
Both A and B (Correct answer)

Correct answer: Both A and B

Both an IDGT installment sale and a GRAT can shift business appreciation to the next generation while the grantor retains income, making them complementary succession tools.

Question 13: Which planning technique involves an elderly parent transferring a home to children while retaining the right to live there for a fixed term?

Charitable remainder trust (CRT)
Intentionally defective grantor trust (IDGT)
Qualified personal residence trust (QPRT) (Correct answer)
Grantor retained annuity trust (GRAT)

Correct 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.

Question 14: The generation-skipping transfer (GST) tax exemption amount in 2024 is most closely aligned with:

The annual gift tax exclusion multiplied by the number of skip persons
The applicable federal midterm rate times the transferred assets
The basic exclusion amount for federal estate tax purposes (Correct answer)
$5,000,000 per transferor

Correct answer: The basic exclusion amount for federal estate tax purposes

The GST tax exemption is equal to the basic exclusion amount for federal estate and gift tax purposes, which is $13.61 million in 2024.

Question 15: A donor-advised fund (DAF) allows the donor to:

Avoid gift tax on transfers exceeding the annual exclusion amount
Receive an income stream from the fund for life before distributions to charity
Retain legal control over the assets and direct specific investments
Take an immediate charitable deduction and recommend grants to charities over time (Correct answer)

Correct answer: Take an immediate charitable deduction and recommend grants to charities over time

A DAF allows donors to contribute assets, claim an immediate tax deduction, and then advise the sponsoring organization on charitable grants over time, though legal control passes to the sponsor.

Question 16: Which technology trend is most likely to impact tax planning & strategy in the AEP field in coming years?

Return to exclusively paper-based systems
Reduction in the need for professional certification
Digital tools for enhanced data collection, analysis, and reporting (Correct answer)
Complete elimination of human professionals

Correct answer: Digital tools for enhanced data collection, analysis, and reporting

Digital tools for enhanced data collection, analysis, and reporting represent the most significant and practical technology trend impacting tax planning & strategy, augmenting rather than replacing professional expertise.

Question 17: When a trust terminates and the trustee distributes remaining assets to beneficiaries, the trustee should first obtain which document to protect against future claims?

An IRS closing letter
A notarized affidavit of heirship
A court order of dissolution
A signed receipt and release from each beneficiary (Correct answer)

Correct answer: A signed receipt and release from each beneficiary

Obtaining a signed receipt and release from each beneficiary acknowledges distribution and releases the trustee from further liability related to trust administration.

Question 18: What is a common challenge professionals face when applying financial analysis & reporting principles in Accredited Estate Planner?

Having too much support from colleagues
Balancing theoretical knowledge with practical application (Correct answer)
Excessive simplicity of industry regulations
Lack of any professional development opportunities

Correct answer: Balancing theoretical knowledge with practical application

Balancing theoretical knowledge with practical application is a well-recognized challenge, as real-world scenarios often present complexities not covered in standard training.

Question 19: Which professional would most likely provide tax minimization strategies in an estate plan?

Insurance broker
Attorney
CPA (Correct answer)
Trustee

Correct answer: CPA

A Certified Public Accountant (CPA) specializes in tax law and financial accounting, making them the most suitable professional to provide tax minimization strategies in an estate plan. They can advise on income tax implications, gift tax strategies, estate tax planning, and the tax efficiency of various trusts and asset transfers. Their expertise helps ensure the plan is structured to legally reduce tax liabilities.

Question 20: IRC §303 provides an important business succession benefit by allowing a partial stock redemption from a closely held corporation to be treated as:

A capital gain or loss rather than a dividend (Correct answer)
Ordinary income taxed at full rates
A tax-free reorganization
A charitable contribution deduction

Correct answer: A capital gain or loss rather than a dividend

IRC §303 allows a corporation to redeem stock from a deceased shareholder's estate to pay estate taxes and funeral/administration expenses with the redemption taxed as capital gain rather than a dividend.

Question 21: What is the '65-day rule' in trust taxation under IRC §663(b)?

Trusts must file returns within 65 days of year-end
A trustee may elect to treat distributions made within 65 days after year-end as if made in the prior tax year (Correct answer)
Beneficiaries have 65 days to disclaim a trust inheritance
Trusts must distribute income within 65 days or pay a penalty

Correct answer: A trustee may elect to treat distributions made within 65 days after year-end as if made in the prior tax year

IRC §663(b) allows trustees to elect to treat distributions made within 65 days after the close of the tax year as distributions of the prior year, offering flexibility in income planning.

Question 22: Which of the following best describes the concept of 'portability' under federal estate tax law?

Moving assets into an irrevocable trust to preserve exemption
Allowing a surviving spouse to use the deceased spouse's unused estate tax exemption (Correct answer)
Carrying forward unused gift tax annual exclusions
Transferring assets across state lines tax-free

Correct answer: Allowing a surviving spouse to use the deceased spouse's unused estate tax exemption

Portability allows a surviving spouse to elect to use any unused federal estate tax exemption of the first deceased spouse by filing a timely estate tax return.

Question 23: A charitable lead annuity trust (CLAT) provides an income stream to charity first and then passes remaining assets to:

The grantor's estate
Non-charitable beneficiaries such as family members (Correct answer)
A private foundation exclusively
A donor-advised fund

Correct answer: Non-charitable beneficiaries such as family members

In a CLAT, charity receives annuity payments for the trust term, and the remainder passes to non-charitable beneficiaries, potentially with significant estate and gift tax savings.

Question 24: What is a common reason to use a Grantor Trust in advanced estate planning?

To defer income taxes indefinitely.
To avoid naming beneficiaries.
To allow the grantor to pay taxes on trust income. (Correct answer)
To prevent all asset transfers.

Correct answer: To allow the grantor to pay taxes on trust income.

A common reason to use a Grantor Trust in advanced estate planning is to allow the grantor to pay the income taxes generated by the trust's assets. This strategy, often referred to as an "intentionally defective grantor trust" (IDGT), allows the trust assets to grow income-tax-free for the beneficiaries, effectively making the grantor's tax payments an additional tax-free gift to the trust. This can significantly enhance wealth transfer to future generations.

Question 25: Which of the following best describes the 'duty of impartiality' as it applies to a trustee administering a trust with both income beneficiaries and remainder beneficiaries?

Investing solely for growth to maximize the remainder estate
Distributing all income annually to current beneficiaries as required by law
Balancing investment and distribution decisions so neither class of beneficiaries is unreasonably favored (Correct answer)
Maximizing total return regardless of its allocation between income and principal

Correct answer: Balancing investment and distribution decisions so neither class of beneficiaries is unreasonably favored

The duty of impartiality requires a trustee to balance the competing interests of income and remainder beneficiaries rather than favoring one class over the other.

Question 26: Under the 'reciprocal trust doctrine,' courts collapse two trusts created by spouses for each other when:

The spouses file separate gift tax returns
Both trusts are revocable
Both trusts invest in the same assets
The trusts are interrelated and leave the grantors in approximately the same economic position as before (Correct answer)

Correct answer: The trusts are interrelated and leave the grantors in approximately the same economic position as before

The reciprocal trust doctrine causes mutual SLATs or similar arrangements to be uncrossed, pulling assets back into each grantor's estate, when the trusts are substantially identical and interrelated.

Question 27: How does continuing education relate to financial analysis & reporting for AEP certified professionals?

It is optional and rarely impacts practice quality
It ensures professionals stay current with evolving standards and best practices (Correct answer)
It is required only for entry-level practitioners
It is only needed when changing employers

Correct answer: It ensures professionals stay current with evolving standards and best practices

Continuing education ensures AEP professionals stay current with evolving standards, technologies, and best practices in financial analysis & reporting, maintaining competency throughout their careers.

Question 28: Which IRS form must a taxpayer file to report a noncash charitable contribution exceeding $500?

Form 990-PF
Form 5227
Form 8283 (Correct answer)
Form 8939

Correct answer: Form 8283

IRS Form 8283 (Noncash Charitable Contributions) must be attached to the taxpayer's return when noncash contributions exceed $500, and requires a qualified appraisal for contributions over $5,000.

Question 29: When implementing risk assessment & mitigation practices, what should a AEP professional prioritize first?

Speed of completion over thoroughness
Personal convenience and efficiency
Compliance with established standards and protocols (Correct answer)
Cost reduction at all levels

Correct answer: Compliance with established standards and protocols

Compliance with established standards and protocols must be the first priority, as it ensures safety, quality, and legal adherence in professional practice.

Question 30: Which of the following best describes a key competency required for tax planning & strategy in AEP certification?

Ability to work independently without any oversight
Critical thinking and evidence-based decision making (Correct answer)
Memorization of all relevant regulations verbatim
Delegation of all complex tasks to supervisors

Correct answer: Critical thinking and evidence-based decision making

Critical thinking and evidence-based decision making is essential for tax planning & strategy, as professionals must analyze situations and apply knowledge appropriately.

Question 31: How is a Qualified Personal Residence Trust (QPRT) used in estate planning?

To manage rental properties
To reduce estate and gift taxes (Correct answer)
To protect assets from lawsuits
To sell real estate quickly

Correct answer: To reduce estate and gift taxes

A Qualified Personal Residence Trust (QPRT) is an estate planning tool specifically designed to reduce the value of a primary or secondary residence for estate and gift tax purposes. The grantor transfers their home into the QPRT for a specified term, retaining the right to live there rent-free during that period. At the end of the term, the home passes to the beneficiaries, and its value for gift tax purposes is discounted, effectively removing the future appreciation of the property from the grantor's taxable estate.

Question 32: What is the primary purpose of risk assessment & mitigation in the context of Accredited Estate Planner?

To ensure consistent quality and professional accountability (Correct answer)
To replace established industry guidelines
To reduce organizational costs exclusively
To eliminate the need for ongoing training

Correct answer: To ensure consistent quality and professional accountability

Risk Assessment & Mitigation in Accredited Estate Planner primarily ensures consistent quality and professional accountability, forming the foundation of competent practice in this field.

Question 33: For a Qualified Charitable Distribution (QCD) from an IRA to qualify for exclusion from gross income, which requirement must be met?

The charity must be a private foundation
The distribution must not exceed $100,000 per year per taxpayer (Correct answer)
The IRA must have been open for at least five years
The IRA owner must be at least 59½ years old

Correct answer: The distribution must not exceed $100,000 per year per taxpayer

To qualify as a QCD, the distribution to an eligible public charity must not exceed $100,000 per taxpayer per year (adjusted for inflation in subsequent years), and the owner must be at least 70½.

Question 34: Which of the following is a key advantage of using a 'super-charged CRAT' or 'accelerated charitable remainder trust' strategy?

Eliminating all capital gains tax on highly appreciated assets transferred to the trust
Funding a CRAT with a deferred annuity to defer trust payouts and extend the charitable deduction period (Correct answer)
Using a CLAT inside a CRAT to maximize both income and charitable deductions simultaneously
Converting ordinary income to capital gain within the trust before distribution

Correct answer: Funding a CRAT with a deferred annuity to defer trust payouts and extend the charitable deduction period

A supercharged CRAT is funded with a deferred annuity that accumulates inside the trust on a tax-deferred basis, deferring distributions and potentially extending the charitable benefit period.

Question 35: How does continuing education relate to regulatory compliance & ethics for AEP certified professionals?

It ensures professionals stay current with evolving standards and best practices (Correct answer)
It is required only for entry-level practitioners
It is only needed when changing employers
It is optional and rarely impacts practice quality

Correct answer: It ensures professionals stay current with evolving standards and best practices

Continuing education ensures AEP professionals stay current with evolving standards, technologies, and best practices in regulatory compliance & ethics, maintaining competency throughout their careers.

Question 36: What is the primary purpose of regulatory compliance & ethics in the context of Accredited Estate Planner?

To reduce organizational costs exclusively
To eliminate the need for ongoing training
To ensure consistent quality and professional accountability (Correct answer)
To replace established industry guidelines

Correct answer: To ensure consistent quality and professional accountability

Regulatory Compliance & Ethics in Accredited Estate Planner primarily ensures consistent quality and professional accountability, forming the foundation of competent practice in this field.

Question 37: How does continuing education relate to tax planning & strategy for AEP certified professionals?

It is optional and rarely impacts practice quality
It is only needed when changing employers
It is required only for entry-level practitioners
It ensures professionals stay current with evolving standards and best practices (Correct answer)

Correct answer: It ensures professionals stay current with evolving standards and best practices

Continuing education ensures AEP professionals stay current with evolving standards, technologies, and best practices in tax planning & strategy, maintaining competency throughout their careers.

Question 38: Which documentation practice is most important for tax planning & strategy in the AEP field?

Using informal notes instead of official records
Documenting only when legally required
Recording only successful outcomes
Maintaining complete, accurate, and timely records (Correct answer)

Correct answer: Maintaining complete, accurate, and timely records

Maintaining complete, accurate, and timely records is crucial for accountability, quality assurance, and legal compliance in tax planning & strategy.

Question 39: A Pooled Income Fund differs from a donor-advised fund because contributions to a Pooled Income Fund must be:

Held only in cash equivalents
Used exclusively for educational charities
Commingled with other donors' contributions and invested collectively (Correct answer)
Distributed within five years of the initial gift

Correct answer: Commingled with other donors' contributions and invested collectively

A Pooled Income Fund commingles contributions from multiple donors, similar to a mutual fund, with each donor receiving a pro-rata share of fund income for life before the remainder passes to the charity.

Question 40: An inter vivos trust created during the grantor's lifetime that cannot be changed or revoked is classified as:

Revocable living trust
Testamentary trust
Resulting trust
Irrevocable inter vivos trust (Correct answer)

Correct answer: Irrevocable inter vivos trust

An irrevocable inter vivos trust is established during the grantor's lifetime and, once executed, generally cannot be modified or terminated by the grantor.

Question 41: Which estate planning tool allows a donor to make a large irrevocable gift to a pooled fund managed by a charity while retaining the right to income for life, with the remainder passing to the charity?

Pooled Income Fund (Correct answer)
Supporting Organization
Charitable Lead Trust
Donor-Advised Fund

Correct answer: Pooled Income Fund

A Pooled Income Fund (PIF) pools contributions from multiple donors, each retaining a pro-rata income interest based on investment earnings, with the remainder passing to the sponsoring charity at the donor's death.

Question 42: An AEP serving on an estate planning team is asked by the client's adult child (who is not a client) to share information about the parent's estate plan. The AEP's proper response is to:

Decline to disclose any client information absent the client's explicit authorization (Correct answer)
Provide information only if the child signs a non-disclosure agreement
Share information only after the client's death when probate records become public
Share general information since the child will eventually be a beneficiary

Correct answer: Decline to disclose any client information absent the client's explicit authorization

A professional's fiduciary duty of confidentiality prohibits disclosing any client information to third parties, including family members, without the client's explicit authorization.

Question 43: Which of the following transfers is subject to both gift tax and GST tax simultaneously?

A taxable termination where no gift tax applies
A taxable distribution from a non-exempt trust
A direct skip to a grandchild (Correct answer)
A transfer to a spouse who is a U.S. citizen

Correct answer: A direct skip to a grandchild

A direct skip—a transfer directly to a skip person such as a grandchild—triggers both gift tax (or estate tax) and GST tax on the same transfer.

Question 44: When multiple professionals in an estate planning team have conflicting recommendations for a client, the most ethical resolution process is to:

Present all recommendations to the client, explain the trade-offs, and let the client make an informed decision (Correct answer)
Resolve the disagreement privately and present only the consensus view to the client
Allow the professional with the highest credentials to override the others
Default to the most tax-efficient strategy regardless of other considerations

Correct answer: Present all recommendations to the client, explain the trade-offs, and let the client make an informed decision

Ethical collaboration requires presenting the client with the full range of professional views and their respective trade-offs so the client can make a fully informed decision aligned with their values and goals.

Question 45: When a family business is transferred to the next generation using a self-canceling installment note (SCIN), what unique feature distinguishes it from an ordinary installment note?

It must be secured by real property
It bears no interest
It qualifies for the annual gift tax exclusion each year
The remaining balance is automatically cancelled at the seller's death, removing it from the gross estate (Correct answer)

Correct answer: The remaining balance is automatically cancelled at the seller's death, removing it from the gross estate

A SCIN includes a cancellation-at-death provision so that if the seller dies before the note is paid off, the remaining balance disappears from the taxable estate without triggering income tax.

Question 46: Under the concept of 'bargain sale' to a charity, which of the following correctly describes the tax treatment?

Gain is recognized proportionally based on the ratio of the sale price to the fair market value (Correct answer)
No gain is recognized because the transaction is partially charitable
The donor's basis is fully allocated to the sold portion, eliminating all gain
The entire fair market value is treated as a charitable deduction

Correct answer: Gain is recognized proportionally based on the ratio of the sale price to the fair market value

In a bargain sale, the donor's adjusted basis is allocated between the sold and donated portions proportionally, so gain is recognized on the sold portion in the ratio of sale price to fair market value.

Question 47: A trustee's duty to keep beneficiaries 'reasonably informed' under the Uniform Trust Code typically includes which of the following?

Furnishing annual trust accountings and responding to reasonable requests for information (Correct answer)
Providing beneficiaries with copies of all attorney-client privileged communications
Notifying beneficiaries only when distributions are made
Disclosing all investment strategies in advance and obtaining beneficiary approval

Correct answer: Furnishing annual trust accountings and responding to reasonable requests for information

Under the UTC, the duty to keep beneficiaries reasonably informed generally includes providing annual accountings and responding to reasonable requests for information about trust administration.

Question 48: A Charitable Remainder Unitrust (CRUT) differs from a Charitable Remainder Annuity Trust (CRAT) primarily because the CRUT pays:

Income only, never principal
A fixed dollar amount each year
A fixed percentage of the trust's annually revalued assets (Correct answer)
Payments only to the charitable remainder beneficiary

Correct answer: A fixed percentage of the trust's annually revalued assets

A CRUT pays a fixed percentage (at least 5%) of the trust's fair market value as revalued annually, so distributions fluctuate with asset performance, unlike the fixed dollar payments of a CRAT.

Question 49: A self-canceling installment note (SCIN) differs from a standard installment sale because the note automatically cancels at the seller's death, which creates what income tax consequence for the buyer?

The buyer receives a stepped-up basis equal to the note's fair market value
The buyer has no additional income recognition and inherits a zero basis
The buyer may deduct the unpaid balance as a bad debt
The buyer recognizes cancellation of debt income at the seller's death (Correct answer)

Correct answer: The buyer recognizes cancellation of debt income at the seller's death

When a SCIN is cancelled at the seller's death, the buyer generally recognizes ordinary income equal to the amount of debt forgiven, as it constitutes cancellation of indebtedness income.

Question 50: Which process allows a trustee to transfer trust assets from an old irrevocable trust into a new trust with more favorable terms without requiring court approval in many states?

Trust reformation
Trust termination
Trust merger
Trust decanting (Correct answer)

Correct answer: Trust decanting

Trust decanting allows a trustee with discretionary distribution authority to 'pour' assets from an existing irrevocable trust into a new trust with updated provisions.

Question 51: A trustee who fails to diversify trust investments without adequate justification may be liable for breach of:

The duty to inform the IRS
The spendthrift clause
The no-contest clause
The duty to prudently invest under the Uniform Prudent Investor Act (Correct answer)

Correct answer: The duty to prudently invest under the Uniform Prudent Investor Act

The Uniform Prudent Investor Act requires trustees to diversify trust investments unless special circumstances justify non-diversification, making failure to diversify a potential breach.

Question 52: Which estate planning technique allows a parent to 'freeze' the value of a business interest in their estate while transferring future appreciation to the next generation income-tax free?

Installment sale to an IDGT (Correct answer)
Section 303 stock redemption
Testamentary bypass trust
Charitable remainder trust funded with business interests

Correct answer: Installment sale to an IDGT

An installment sale of business interest to an IDGT freezes the seller's estate at the note value while all future appreciation accrues income-tax free inside the grantor trust for the next generation.

Question 53: How should a AEP professional handle a situation where regulatory compliance & ethics protocols conflict with practical constraints?

Document the conflict and seek guidance from appropriate authorities (Correct answer)
Always ignore the protocols in favor of practicality
Avoid addressing the conflict entirely
Make a unilateral decision without consultation

Correct answer: Document the conflict and seek guidance from appropriate authorities

When protocols conflict with practical constraints, the professional approach is to document the conflict and seek guidance, ensuring transparency and compliance while working toward a resolution.

Question 54: Under IRC Section 2036, an FLP may be included in the grantor's estate if the grantor retained which type of interest?

The right to possess, enjoy, or receive income from transferred property (Correct answer)
Any interest in the FLP exceeding 5% of total value
A limited partnership interest only
A general partner interest with no economic rights

Correct answer: The right to possess, enjoy, or receive income from transferred property

IRC §2036 pulls assets back into the estate when the decedent retained the right to possess, enjoy, or receive income from transferred property, which courts have applied aggressively to FLPs.

Question 55: What is the significance of peer review in regulatory compliance & ethics for AEP professionals?

It is only relevant for newly certified professionals
It replaces the need for self-assessment
It promotes accountability, knowledge sharing, and quality improvement (Correct answer)
It is primarily used for disciplinary purposes

Correct answer: It promotes accountability, knowledge sharing, and quality improvement

Peer review promotes accountability, knowledge sharing, and quality improvement by allowing AEP professionals to benefit from collective expertise and identify areas for growth.

Question 56: For gift tax purposes, which of the following transfers qualifies for the annual exclusion under IRC §2503(b)?

A contribution to a 529 plan exceeding five-year election limits
A gift of a future interest in property
A gift of a present interest in property (Correct answer)
A gift to a trust with no current distribution rights

Correct answer: A gift of a present interest in property

The annual gift tax exclusion applies only to gifts of present interests—those where the donee has an immediate right to use, possess, or enjoy the property.

Question 57: A 'trust protector' clause in an irrevocable trust most commonly grants which type of authority to improve long-term flexibility?

The power to distribute all trust assets within 5 years of formation
The power to add or remove beneficiaries and amend trust terms to adapt to law changes (Correct answer)
The power to override the trustee's investment decisions on a daily basis
The power to file the trust's income tax returns as a grantor trust

Correct answer: The power to add or remove beneficiaries and amend trust terms to adapt to law changes

A trust protector typically holds powers to modify trust terms, change situs, add or remove beneficiaries, and respond to tax law changes, providing flexibility in an otherwise irrevocable structure.

Question 58: Which documentation practice is most important for regulatory compliance & ethics in the AEP field?

Documenting only when legally required
Using informal notes instead of official records
Maintaining complete, accurate, and timely records (Correct answer)
Recording only successful outcomes

Correct answer: Maintaining complete, accurate, and timely records

Maintaining complete, accurate, and timely records is crucial for accountability, quality assurance, and legal compliance in regulatory compliance & ethics.

Question 59: A dynasty trust is designed to last for multiple generations primarily to avoid which tax?

State inheritance taxes in all 50 states
Generation-skipping transfer (GST) tax on repeated transfers (Correct answer)
Self-employment taxes on business income
Income tax on trust earnings

Correct answer: Generation-skipping transfer (GST) tax on repeated transfers

By allocating GST exemption to a dynasty trust at inception, assets can pass through multiple generations without incurring GST tax each time they transfer.

Question 60: What ethical consideration is most relevant to regulatory compliance & ethics in AEP practice?

Maintaining confidentiality and acting in the best interest of stakeholders (Correct answer)
Following only those rules that are convenient
Prioritizing personal advancement over professional duties
Avoiding all professional development activities

Correct answer: Maintaining confidentiality and acting in the best interest of stakeholders

Maintaining confidentiality and acting in the best interest of stakeholders is the cornerstone ethical consideration for regulatory compliance & ethics in professional practice.

Question 61: A 'zeroed-out GRAT' is structured so that the present value of the retained annuity payments equals the full value of assets transferred, which means the taxable gift at inception is:

Equal to the full fair market value of transferred assets
50% of the assets' fair market value
Zero, eliminating any gift tax at formation (Correct answer)
Equal to the §7520 rate applied to the transferred assets

Correct answer: Zero, eliminating any gift tax at formation

A zeroed-out GRAT is designed so the present value of retained annuity payments exactly equals the contribution, resulting in a zero taxable gift at creation while still transferring excess returns to heirs.

Question 62: For a Grantor Retained Annuity Trust (GRAT) to be successful as a wealth transfer tool, the assets transferred must grow at a rate exceeding:

The prime lending rate plus 2%
The long-term capital gains tax rate
The IRC Section 7520 rate (120% of the applicable federal midterm rate) (Correct answer)
The trust's internal rate of return from the prior year

Correct answer: The IRC Section 7520 rate (120% of the applicable federal midterm rate)

A GRAT transfers wealth to heirs only to the extent trust assets outperform the §7520 hurdle rate; if assets grow faster than that rate, the excess passes to heirs gift-tax free.

Question 63: Which valuation discount is most commonly applied when transferring minority interests in a family limited partnership (FLP) for estate tax purposes?

Marketability discount only
Minority interest discount (Correct answer)
Key person discount
Blockage discount

Correct answer: Minority interest discount

A minority interest discount reflects the lack of control a minority owner has, and it is the most frequently applied discount in FLP transfers.

Question 64: The generation-skipping transfer (GST) tax exemption in 2024 is indexed for inflation and applies to transfers that skip how many generations?

One generation
Two or more generations below the transferor
At least one generation below the transferor (Correct answer)
Any transfer to a minor

Correct answer: At least one generation below the transferor

The GST tax applies when assets pass to a 'skip person,' generally a beneficiary at least one generation below the transferor, such as a grandchild.

Question 65: The 'estate equalization' strategy is most beneficial for married couples where one spouse has a significantly larger estate because it:

Maximizes the portability election for the surviving spouse
Minimizes state income taxes on investment income
Allows unlimited marital deduction transfers at the first death
Ensures both estates fully utilize the applicable exclusion amount (Correct answer)

Correct answer: Ensures both estates fully utilize the applicable exclusion amount

Estate equalization transfers assets between spouses so that each estate is sized to fully utilize the applicable exclusion amount, avoiding the scenario where one spouse's estate far exceeds their exclusion while the other's is underutilized.

Question 66: A client with a blended family asks the AEP team to help structure an estate plan that treats children from a prior marriage differently than children from the current marriage. The team's fiduciary and ethical obligation is to:

Require equal shares as a condition of professional engagement
Refuse to draft documents that treat beneficiaries unequally
Advise the client of the implications and implement their informed, competent decision (Correct answer)
Implement the plan only if the current spouse consents in writing

Correct answer: Advise the client of the implications and implement their informed, competent decision

Competent adult clients have the right to distribute their estate as they choose; the professional team's obligation is to ensure the client is fully informed of the consequences and then implement the client's autonomous decision.

Question 67: Which technology trend is most likely to impact regulatory compliance & ethics in the AEP field in coming years?

Return to exclusively paper-based systems
Digital tools for enhanced data collection, analysis, and reporting (Correct answer)
Reduction in the need for professional certification
Complete elimination of human professionals

Correct answer: Digital tools for enhanced data collection, analysis, and reporting

Digital tools for enhanced data collection, analysis, and reporting represent the most significant and practical technology trend impacting regulatory compliance & ethics, augmenting rather than replacing professional expertise.

Question 68: What is the federal gift tax annual exclusion amount per recipient for 2024?

$15,000
$17,000
$16,000
$18,000 (Correct answer)

Correct answer: $18,000

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

Question 69: What does the step-up in basis rule apply to?

Assets sold before death
Income earned after death
Life insurance proceeds
Inherited assets (Correct answer)

Correct answer: Inherited assets

The step-up in basis rule applies specifically to inherited assets. When an asset is inherited, its cost basis for the beneficiary is "stepped up" to its fair market value on the date of the decedent's death, rather than the original purchase price. This rule is highly advantageous for beneficiaries, as it can significantly reduce or even eliminate capital gains tax if they choose to sell the asset shortly after inheritance.

Question 70: An irrevocable life insurance trust (ILIT) keeps life insurance proceeds out of the insured's gross estate primarily because:

The trust files its own estate tax return
The insured holds no incidents of ownership in the policy (Correct answer)
State law exempts life insurance from probate
Life insurance proceeds are always income-tax-free

Correct answer: The insured holds no incidents of ownership in the policy

Under IRC §2042, life insurance is included in the gross estate if the decedent held any incident of ownership; an ILIT ensures the trust, not the insured, owns the policy.

Question 71: Which of the following best describes a key competency required for regulatory compliance & ethics in AEP certification?

Critical thinking and evidence-based decision making (Correct answer)
Memorization of all relevant regulations verbatim
Delegation of all complex tasks to supervisors
Ability to work independently without any oversight

Correct answer: Critical thinking and evidence-based decision making

Critical thinking and evidence-based decision making is essential for regulatory compliance & ethics, as professionals must analyze situations and apply knowledge appropriately.

Question 72: When valuing a closely held business for estate or gift tax purposes, which three approaches are commonly used under IRS Revenue Ruling 59-60?

DCF, EBITDA multiples, and tax basis
Income, market, and asset (cost) approaches (Correct answer)
Fair value, intrinsic value, and assessed value
Book value, replacement cost, and liquidation value

Correct answer: Income, market, and asset (cost) approaches

Revenue Ruling 59-60 directs appraisers to consider the income approach (capitalized earnings), market approach (comparable transactions/multiples), and asset approach (net asset value) when valuing closely held stock.

Question 73: Which type of charitable trust provides the donor with an immediate income tax deduction, pays income to a non-charitable beneficiary for a term, and then distributes the remainder to charity?

Pooled income fund
Private foundation
Charitable remainder trust (CRT) (Correct answer)
Charitable lead trust (CLT)

Correct answer: Charitable remainder trust (CRT)

A charitable remainder trust pays income to the donor or other beneficiaries for a term or life, with the remainder passing to a qualified charity.

Question 74: Why is interdisciplinary collaboration important in estate planning?

To avoid hiring staff.
To avoid estate planning completely.
To ensure all areas of expertise are represented. (Correct answer)
To complete the plan faster.

Correct answer: To ensure all areas of expertise are represented.

Interdisciplinary collaboration in estate planning is vital because it brings together professionals with diverse expertise, such as attorneys, financial advisors, CPAs, and insurance professionals. Each specialist contributes their unique knowledge to address complex financial, legal, and tax aspects of an estate. This integrated approach ensures a comprehensive, well-rounded, and effective estate plan that considers all relevant factors.

Question 75: Which IRC section governs the inclusion of assets in a decedent's gross estate when the decedent retained a life interest in transferred property?

IRC §2036 (Correct answer)
IRC §2042
IRC §2038
IRC §2035

Correct answer: IRC §2036

IRC §2036 requires inclusion of transferred property in the gross estate when the decedent retained the right to income or possession for life.

Question 76: What is the primary estate planning risk of naming a minor child as a direct beneficiary of a life insurance policy or retirement account?

A court-appointed guardian or conservator will be required to manage the assets until the child reaches majority (Correct answer)
The child's inheritance will be permanently lost
The proceeds will be included in the surviving parent's estate
The proceeds will be subject to the kiddie tax

Correct answer: A court-appointed guardian or conservator will be required to manage the assets until the child reaches majority

Minors cannot legally control assets, so a court must appoint a guardian of the property to manage the funds until the child reaches the age of majority, which can be costly and inflexible.

Question 77: Which of the following best describes a key competency required for financial analysis & reporting in AEP certification?

Ability to work independently without any oversight
Memorization of all relevant regulations verbatim
Delegation of all complex tasks to supervisors
Critical thinking and evidence-based decision making (Correct answer)

Correct answer: Critical thinking and evidence-based decision making

Critical thinking and evidence-based decision making is essential for financial analysis & reporting, as professionals must analyze situations and apply knowledge appropriately.

Question 78: Under the Uniform Disposition of Community Property Act, how is community property treated when a couple moves from a community property state to a common law state?

It becomes the separate property of each spouse
It must be retitled within one year
It automatically converts to joint tenancy
It retains its community property character (Correct answer)

Correct answer: It retains its community property character

The UDCPA, adopted by some common law states, preserves the community property character of assets acquired in a community property state.

Question 79: A Qualified Domestic Trust (QDOT) is specifically designed for situations where the surviving spouse is:

Mentally incapacitated
A beneficiary of a prior marriage
A non-U.S. citizen (Correct answer)
A minor child

Correct answer: A non-U.S. citizen

A QDOT allows a non-citizen surviving spouse to qualify for the marital deduction while ensuring the IRS can collect estate taxes before assets leave U.S. jurisdiction.

Question 80: Why should you review your estate plan regularly?

To update based on legal and life changes. (Correct answer)
To impress financial advisors.
To decrease investment returns.
To increase probate fees.

Correct answer: To update based on legal and life changes.

You should review your estate plan regularly to update it based on legal and life changes. Significant life events such as marriage, divorce, births, deaths, or changes in assets, as well as evolving tax laws, can render an outdated plan ineffective or contrary to your current wishes. Regular reviews ensure your plan remains current, accurate, and aligned with your goals.

Question 81: Which federal tax is directly associated with transferring property at death?

Gift tax
Income tax
Sales tax
Estate tax (Correct answer)

Correct answer: Estate tax

The federal tax directly associated with transferring property at death is the estate tax. This tax is levied on the total value of a deceased person's assets, including cash, real estate, stocks, and other property, before distribution to heirs. It is distinct from income tax, which applies to earnings, and gift tax, which applies to transfers made during life.

Question 82: A business owner who wants to transfer a farm or closely held business at a reduced estate tax value may qualify for which special valuation election under IRC §2032A?

Special use valuation (Correct answer)
Conservation easement exclusion
Alternate valuation date election
Qualified family-owned business interest deduction

Correct answer: Special use valuation

IRC §2032A special use valuation allows qualifying real property used in a farm or closely held business to be valued at its current use value rather than highest and best use, reducing estate taxes.

Question 83: How does continuing education relate to risk assessment & mitigation for AEP certified professionals?

It is required only for entry-level practitioners
It is optional and rarely impacts practice quality
It ensures professionals stay current with evolving standards and best practices (Correct answer)
It is only needed when changing employers

Correct answer: It ensures professionals stay current with evolving standards and best practices

Continuing education ensures AEP professionals stay current with evolving standards, technologies, and best practices in risk assessment & mitigation, maintaining competency throughout their careers.

Question 84: How does a Charitable Remainder Trust (CRT) benefit estate planning?

It enables charitable giving with income and tax advantages. (Correct answer)
It increases estate tax liability.
It avoids probate completely.
It allows tax-free withdrawals.

Correct answer: It enables charitable giving with income and tax advantages.

A Charitable Remainder Trust (CRT) allows individuals to make a significant charitable donation while retaining an income stream for themselves or other non-charitable beneficiaries for a specified term or life. Upon the trust's termination, the remaining assets are distributed to the designated charity. This strategy offers immediate income tax deductions, potential capital gains tax avoidance on appreciated assets, and reduces the donor's taxable estate.

Question 85: IRC §6166 provides estate tax relief specifically for estates with a significant closely held business interest by allowing:

A stepped-up basis on all business assets
A charitable deduction equal to 50% of the business value
A full exclusion of the business value from the taxable estate
Installment payments of estate tax attributable to the business over up to 14 years (Correct answer)

Correct answer: Installment payments of estate tax attributable to the business over up to 14 years

IRC §6166 permits estates where the closely held business exceeds 35% of the adjusted gross estate to pay the business-related estate tax in installments over up to 14 years at favorable interest rates.

Question 86: Which quality improvement method is most applicable to tax planning & strategy in Accredited Estate Planner?

Making changes only when mandated by regulators
Ignoring feedback and maintaining status quo
Implementing changes without measuring outcomes
Plan-Do-Check-Act (PDCA) continuous improvement cycle (Correct answer)

Correct answer: Plan-Do-Check-Act (PDCA) continuous improvement cycle

The PDCA cycle is widely recognized as the most effective quality improvement method, allowing AEP professionals to systematically improve tax planning & strategy practices.

Question 87: The 'estate inclusion' problem unique to private foundations involves which transfer tax issue?

Retained control by the founder can cause estate inclusion under §2036 (Correct answer)
Deductions for foundation contributions are limited to 20% of AGI
Contributions to the foundation are subject to gift tax
Foundation assets are subject to a separate estate tax at the founder's death

Correct answer: Retained control by the founder can cause estate inclusion under §2036

If a foundation founder retains significant control over foundation assets, the IRS may argue that §2036 requires inclusion of those assets in the founder's taxable estate.

Question 88: An estate planner recommends a Charitable Lead Annuity Trust (CLAT) to a client when interest rates are LOW primarily because:

Lower rates reduce the IRS §7520 rate, which decreases the value of the charitable lead interest, leaving more for heirs
Lower rates increase the projected remainder value passing to heirs if the trust outperforms the §7520 rate (Correct answer)
Lower rates increase the present value of the annuity paid to charity, maximizing the deduction
Lower rates eliminate capital gains tax on appreciated assets contributed to the CLAT

Correct answer: Lower rates increase the projected remainder value passing to heirs if the trust outperforms the §7520 rate

In a low-rate environment, the §7520 hurdle rate is low, making it easier for the CLAT's investments to exceed that rate—any outperformance accumulates estate-tax-free for the heirs, maximizing the wealth transfer benefit.

Question 89: A disclaimer in estate planning must generally meet which requirement under IRC §2518 to be considered 'qualified'?

Must be filed within 6 months of the transfer
Must be signed by all other beneficiaries
Must be written, irrevocable, and made within 9 months of the transfer (Correct answer)
Must be approved by probate court

Correct answer: Must be written, irrevocable, and made within 9 months of the transfer

A qualified disclaimer under IRC §2518 must be in writing, irrevocable, timely (within 9 months), and the disclaimant must not have accepted any benefits from the interest.

Question 90: What is the significance of peer review in tax planning & strategy for AEP professionals?

It is primarily used for disciplinary purposes
It is only relevant for newly certified professionals
It promotes accountability, knowledge sharing, and quality improvement (Correct answer)
It replaces the need for self-assessment

Correct answer: It promotes accountability, knowledge sharing, and quality improvement

Peer review promotes accountability, knowledge sharing, and quality improvement by allowing AEP professionals to benefit from collective expertise and identify areas for growth.

Question 91: What is the annual exclusion amount for gifts under the federal gift tax (as of recent IRS rules)?

$17,000 (Correct answer)
$15,000
$10,000
$25,000

Correct answer: $17,000

As of recent IRS rules (specifically for 2023, and often updated annually), the annual exclusion amount for gifts under the federal gift tax is $17,000. This means an individual can give up to $17,000 per year to any number of recipients without incurring gift tax or using up any of their lifetime gift tax exemption. This amount is adjusted periodically for inflation.

Question 92: What is the minimum required payout rate for a Charitable Remainder Trust to qualify under IRC Section 664?

5% of net fair market value (Correct answer)
7.5% of net fair market value
3% of initial net fair market value
10% of net fair market value

Correct answer: 5% of net fair market value

IRC §664 requires that a CRT pay at least 5% of net fair market value annually to qualify as a charitable remainder trust.

Question 93: In Accredited Estate Planner, what role does regulatory compliance & ethics play in ensuring client/stakeholder satisfaction?

It replaces the need for direct communication
It only matters during initial certification
It has no direct impact on stakeholder satisfaction
It builds trust through demonstrated competence and consistency (Correct answer)

Correct answer: It builds trust through demonstrated competence and consistency

Regulatory Compliance & Ethics builds trust through demonstrated competence and consistency, which directly contributes to stakeholder satisfaction and confidence in the AEP professional.

Question 94: In Accredited Estate Planner, what role does tax planning & strategy play in ensuring client/stakeholder satisfaction?

It has no direct impact on stakeholder satisfaction
It replaces the need for direct communication
It only matters during initial certification
It builds trust through demonstrated competence and consistency (Correct answer)

Correct answer: It builds trust through demonstrated competence and consistency

Tax Planning & Strategy builds trust through demonstrated competence and consistency, which directly contributes to stakeholder satisfaction and confidence in the AEP professional.

Question 95: A financial advisor on an AEP team learns through the client relationship that a corporate client plans to announce a major acquisition next week. Using that information to trade the target company's stock would constitute:

A permissible use of information gathered in a professional capacity
Insider trading and a violation of both securities law and fiduciary duty (Correct answer)
An acceptable practice if the trades are executed through a family member's account
A gray area only prohibited if the advisor is a registered broker-dealer

Correct answer: Insider trading and a violation of both securities law and fiduciary duty

Using material non-public information obtained through a fiduciary relationship to trade securities constitutes insider trading, violating both securities laws and the advisor's fiduciary duty of confidentiality.

Question 96: In a net gift arrangement, the donee agrees to pay the gift tax due on the transfer. This reduces the taxable gift because:

The donor receives a charitable deduction
Net gifts are excluded from the lifetime exemption
The IRS waives gift tax when the donee pays it
The gift tax paid by the donee is subtracted from the gift's fair market value (Correct answer)

Correct answer: The gift tax paid by the donee is subtracted from the gift's fair market value

Because the donee's assumption of the gift tax liability reduces what the donor actually transfers, the taxable gift equals the FMV of the property minus the gift tax paid by the donee.

Question 97: When an estate attorney on a planning team identifies a strategy that benefits the estate plan but creates a potential malpractice exposure for the attorney, how should this conflict be handled?

The team should collectively decide whether to implement the strategy without informing the client
The attorney should simply decline the representation without explanation
The attorney should implement the strategy and say nothing to avoid alarming the client
The attorney should disclose the conflict to the client and, if necessary, recommend independent counsel (Correct answer)

Correct answer: The attorney should disclose the conflict to the client and, if necessary, recommend independent counsel

An attorney with a conflict of interest must disclose the conflict to the client, obtain informed consent where permissible, and recommend independent counsel when the conflict cannot be waived.

Question 98: What is the primary purpose of a Grantor Retained Annuity Trust (GRAT)?

To transfer assets with reduced gift tax liability. (Correct answer)
To make charitable donations.
To invest in real estate only.
To avoid income tax entirely.

Correct answer: To transfer assets with reduced gift tax liability.

A Grantor Retained Annuity Trust (GRAT) is an estate planning tool used to transfer appreciating assets to beneficiaries with minimal or no gift tax. The grantor places assets into the trust and receives an annuity payment for a specified term. If the assets appreciate beyond the IRS-assumed growth rate, the excess growth passes to the beneficiaries gift-tax free, effectively "freezing" the value of the gift for tax purposes.

Question 99: A Charitable Gift Annuity (CGA) differs from a Charitable Remainder Annuity Trust (CRAT) primarily because:

A CGA is a direct contract between the donor and the charity, not a separate trust (Correct answer)
A CGA provides a larger charitable deduction than a CRAT for the same gift amount
A CGA assets are segregated from the charity's general assets
A CGA requires a minimum transfer of $100,000

Correct answer: A CGA is a direct contract between the donor and the charity, not a separate trust

A CGA is a simple bilateral contract between the donor and the charity where the charity promises annuity payments from its general assets; it does not create a separate trust entity like a CRAT.

Question 100: Which of the following describes a 'net income with makeup charitable remainder unitrust' (NIMCRUT)?

A CRUT that allows the trustee to accumulate all income until the trust terminates
A CRUT that pays a fixed annuity from trust income only
A CRUT that pays the greater of net income or the unitrust percentage, with no makeup provision
A CRUT that pays the lesser of net income or the unitrust percentage, with a makeup account for deficiencies paid in future years (Correct answer)

Correct answer: A CRUT that pays the lesser of net income or the unitrust percentage, with a makeup account for deficiencies paid in future years

A NIMCRUT pays the lesser of net income or the stated unitrust percentage each year, and maintains a 'makeup account' so deficiencies from low-income years can be paid out when trust income exceeds the unitrust percentage in later years.

Accredited Estate Planner (AEP®) Exam

The AEP® designation signifies advanced knowledge and experience in estate planning, covering legal, tax, and financial aspects of wealth transfer.

100

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120 min

Time Limit

70%

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