AFC Retirement and Estate Planning 2

Question 1

A married couple wants to minimize estate taxes. Which strategy allows one spouse to use the other's unused federal estate tax exemption?

Accepted Answer

Portability election

Answer

Disclaimer trust

Answer

Bypass trust

Answer

QTIP trust

Question 2

Which type of IRA contribution is made with after-tax dollars, allowing qualified withdrawals to be completely tax-free?

Accepted Answer

Roth IRA

Answer

Traditional IRA

Answer

SEP-IRA

Answer

SIMPLE IRA

Question 3

A 55-year-old client separates from service in the year they turn 55. Which penalty exception may allow them to take 401(k) distributions without the 10% early withdrawal penalty?

Accepted Answer

Rule of 55

Answer

Substantially Equal Periodic Payments (SEPP)

Answer

Disability exception

Answer

First-time homebuyer exception

Question 4

Which estate planning document designates who will manage an individual's financial affairs if they become incapacitated?

Accepted Answer

Durable power of attorney

Answer

Living will

Answer

Healthcare proxy

Answer

Letter of instruction

Question 5

What is the primary tax advantage of a Health Savings Account (HSA) in the context of retirement planning?

Accepted Answer

Contributions are tax-deductible and withdrawals for any purpose after 65 are penalty-free

Answer

Contributions grow tax-deferred but withdrawals are always taxable

Answer

Employer contributions are excluded from income but employee contributions are not

Answer

Withdrawals are only tax-free if used before age 65

Question 6

Which retirement account type is most appropriate for a self-employed individual with no employees who wants to maximize retirement contributions?

Accepted Answer

Solo 401(k)

Answer

SIMPLE IRA

Answer

Traditional IRA

Answer

Defined benefit plan

Question 7

In estate planning, what does the term 'per stirpes' mean in the context of beneficiary designations?

Accepted Answer

A deceased beneficiary's share passes to their descendants

Answer

Assets pass equally to all surviving beneficiaries

Answer

Assets are distributed based on age of beneficiaries

Answer

All beneficiaries must survive the grantor to inherit