CFP Estate Planning & Wealth Transfer

Question 1

What is the federal estate and gift tax exemption amount per individual for 2024?

Accepted Answer

$13.61 million

Answer

$12.92 million

Answer

$11.58 million

Answer

$14.00 million

Question 2

Which type of trust allows the grantor to retain full control during their lifetime and avoids probate at death?

Accepted Answer

Revocable living trust

Answer

Irrevocable living trust

Answer

Testamentary trust

Answer

Spendthrift trust

Question 3

What is the annual gift tax exclusion amount per donee for 2024?

Accepted Answer

$18,000

Answer

$15,000

Answer

$16,000

Answer

$17,000

Question 4

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:

Accepted Answer

A non-U.S. citizen

Answer

Over age 65

Answer

A beneficiary of a trust

Answer

Legally separated

Question 5

What is the 'step-up in basis' rule as applied to inherited assets?

Accepted Answer

The asset's cost basis is reset to its fair market value at the decedent's date of death

Answer

The heir must increase the asset's cost basis by 10% annually

Answer

The heir pays capital gains tax on all appreciation since the original purchase

Answer

The asset basis steps up only for assets held longer than one year

Question 6

A Qualified Terminable Interest Property (QTIP) trust is primarily used to:

Accepted Answer

Provide income to a surviving spouse while controlling the ultimate disposition of assets

Answer

Avoid the generation-skipping transfer tax

Answer

Fund charitable bequests at the grantor's death

Answer

Minimize income taxes during the grantor's lifetime

Question 7

Which document authorizes an individual to make healthcare decisions on behalf of an incapacitated person?

Accepted Answer

Healthcare proxy (durable power of attorney for healthcare)

Answer

Durable power of attorney for finances

Answer

Living will (advance directive)

Answer

Revocable trust