Estate Planning & Wealth Transfer Flashcards
7 cards from real CFP 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 & Wealth Transfer flashcards as text
What is the federal estate and gift tax exemption amount per individual for 2024?
Answer: $13.61 million
The federal estate and gift tax exemption for 2024 is $13.61 million per individual, adjusted annually for inflation.
Which type of trust allows the grantor to retain full control during their lifetime and avoids probate at death?
Answer: Revocable living trust
A revocable living trust allows the grantor to maintain control, amend, or revoke it during their lifetime, and assets transfer to beneficiaries outside of probate.
What is the annual gift tax exclusion amount per donee for 2024?
Answer: $18,000
The 2024 annual gift tax exclusion is $18,000 per donee, allowing tax-free gifts up to this amount to any number of recipients.
The unlimited marital deduction allows a U.S. citizen spouse to receive estate assets tax-free, but this deduction is NOT available when the surviving spouse is:
Answer: A non-U.S. citizen
The unlimited marital deduction is restricted when the surviving spouse is a non-U.S. citizen; a Qualified Domestic Trust (QDOT) must be used instead.
What is the 'step-up in basis' rule as applied to inherited assets?
Answer: The asset's cost basis is reset to its fair market value at the decedent's date of death
Assets inherited from a decedent receive a new cost basis equal to their fair market value on the date of death, eliminating capital gains tax on pre-death appreciation.
A Qualified Terminable Interest Property (QTIP) trust is primarily used to:
Answer: Provide income to a surviving spouse while controlling the ultimate disposition of assets
A QTIP trust qualifies for the marital deduction while allowing the first spouse to die to direct where the remaining assets go after the surviving spouse's death.
Which document authorizes an individual to make healthcare decisions on behalf of an incapacitated person?
Answer: Healthcare proxy (durable power of attorney for healthcare)
A healthcare proxy or durable power of attorney for healthcare designates an agent to make medical decisions when the principal is unable to do so.