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

The federal estate and gift tax exemption for 2024 is $13.61 million per individual, adjusted annually for inflation.

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

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.

Question 3

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

Accepted Answer

$18,000

Answer

The 2024 annual gift tax exclusion is $18,000 per donee, allowing tax-free gifts up to this amount to any number of recipients.

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

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.

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

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.

CFP - Certified Financial Planner Practice Test

CFP - Certified Financial Planner Practice Test

CFP Estate Planning & Wealth Transfer