CES CES Estate Settlement & Probate Process 2

Question 1

Under the Uniform Probate Code, what is a 'small estate affidavit,' and when can it be used?

Accepted Answer

A simplified procedure allowing heirs to collect assets without formal probate when the estate falls below a state threshold

Answer

A small estate affidavit allows heirs to collect probate assets without formal administration when the gross probate estate falls below the state's threshold, typically ranging from $10,000 to $200,000.

Question 2

What is the purpose of publishing a 'Notice to Creditors' during probate?

Accepted Answer

To give creditors a limited time to file claims against the estate

Answer

Publishing a Notice to Creditors in a local newspaper starts the statutory claims period, after which creditors who fail to file lose their right to collect from the estate.

Question 3

Which asset is NOT included in the probate estate?

Accepted Answer

Bank account with a payable-on-death (POD) beneficiary

Answer

A payable-on-death bank account passes directly to the named beneficiary by contract, bypassing probate entirely.

Question 4

What document must the executor file with the IRS within nine months of the decedent's death if the gross estate exceeds the applicable exclusion amount?

Accepted Answer

Form 706 (United States Estate Tax Return)

Answer

Form 706 must be filed within nine months of death (with a six-month extension available) when the gross estate exceeds the applicable exclusion amount, which is $13.61 million in 2024.

Question 5

What is the stepped-up basis rule, and how does it benefit heirs?

Accepted Answer

It resets the cost basis of inherited assets to fair market value at the date of death, reducing capital gains tax on a future sale

Answer

Under IRC §1014, inherited assets receive a new basis equal to fair market value at the date of death, eliminating the unrealized capital gain that accrued during the decedent's lifetime.

(CES) Certified Estate and Trust Specialist Practice Test

(CES) Certified Estate and Trust Specialist Practice Test

CES CES Estate Settlement & Probate Process 2