Practice Test Geeks(CES) Certified Estate and Trust Specialist Practice Test
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Estate Planning Principles & Strategies Flashcards

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

Read the first 7 Estate Planning Principles & Strategies flashcards as text

  1. Which of the following best describes the step-up in basis that occurs at death?

    Answer: Inherited assets receive a new basis equal to fair market value at the date of death

    When assets are inherited, their tax basis is stepped up to the fair market value as of the decedent's date of death, eliminating unrealized capital gains.

  2. A Qualified Personal Residence Trust (QPRT) is primarily used to:

    Answer: Transfer a home to heirs at a reduced gift tax value

    A QPRT allows a homeowner to transfer their residence to an irrevocable trust at a reduced gift tax value by retaining the right to live in the home for a specified term.

  3. Under the unlimited marital deduction, which transfers qualify for a full federal estate tax deduction?

    Answer: Outright transfers to a surviving spouse who is a U.S. citizen

    The unlimited marital deduction allows an unlimited amount to pass estate-tax-free to a surviving spouse who is a U.S. citizen.

  4. Which document allows a person to name someone to make healthcare decisions if they become incapacitated?

    Answer: A healthcare proxy (durable power of attorney for healthcare)

    A healthcare proxy, also called a durable power of attorney for healthcare, designates an agent to make medical decisions on behalf of an incapacitated principal.

  5. What is the primary benefit of using a Grantor Retained Annuity Trust (GRAT)?

    Answer: It allows asset appreciation above the IRS hurdle rate to pass to heirs gift-tax-free

    A GRAT transfers appreciation above the IRS Section 7520 hurdle rate to beneficiaries without additional gift or estate tax.

  6. Which estate planning technique is commonly used by non-citizen spouses to qualify for the marital deduction?

    Answer: Qualified Domestic Trust (QDOT)

    A QDOT allows a non-citizen surviving spouse to benefit from the marital deduction, with estate taxes deferred until distributions are made or the spouse dies.

  7. Which of the following is a key characteristic of a spendthrift provision in a trust?

    Answer: It prevents beneficiaries from assigning their interest or creditors from attaching it

    A spendthrift provision restricts a beneficiary's ability to voluntarily transfer their interest and protects it from attachment by creditors.