CIM Estate Planning 2 — Questions and Answers
Question 1: A client's will leaves assets to descendants 'per stirpes.' One of her three children predeceased her, leaving two grandchildren. How is that deceased child's share distributed?
- The two grandchildren split the deceased child's one-third share equally (Correct answer)
- The surviving two children split the entire estate equally
- All five living descendants share the estate equally
- The deceased child's share lapses and passes under intestacy
Correct answer: The two grandchildren split the deceased child's one-third share equally
Under per stirpes, descendants of a predeceased beneficiary take that beneficiary's share by representation.
Question 2: What is the primary purpose of a pour-over will used alongside a revocable living trust?
- To avoid federal estate tax on trust assets
- To transfer any assets left outside the trust into the trust at death (Correct answer)
- To appoint a trustee for the living trust
- To revoke the trust automatically at the grantor's death
Correct answer: To transfer any assets left outside the trust into the trust at death
A pour-over will catches assets not retitled to the trust during life and directs them into the trust, though they still pass through probate.
Question 3: Which asset would most likely pass through probate?
- A brokerage account titled as joint tenants with right of survivorship
- A life insurance policy with a named living beneficiary
- A brokerage account held solely in the decedent's name with no TOD designation (Correct answer)
- An IRA with a named spouse beneficiary
Correct answer: A brokerage account held solely in the decedent's name with no TOD designation
Individually titled assets without a beneficiary or transfer-on-death designation must pass under the will through probate.
Question 4: A Texas resident dies owning a vacation home titled in her own name in Colorado. What additional proceeding will likely be required?
- A Section 2032A special use valuation
- A disclaimer proceeding
- A guardianship proceeding
- Ancillary probate in Colorado (Correct answer)
Correct answer: Ancillary probate in Colorado
Real property is governed by the law of the state where it is located, so an ancillary probate is generally needed there.
Question 5: A holographic will is best described as one that is:
- Handwritten and signed by the testator, often without witnesses (Correct answer)
- Recorded on video before a notary
- Made orally by a person in imminent peril of death
- Drafted by an attorney and signed before two witnesses
Correct answer: Handwritten and signed by the testator, often without witnesses
Holographic wills are written in the testator's own handwriting and are valid in some states without witnesses.
Question 6: Which of the following is NOT typically a duty of an executor?
- Inventorying and valuing estate assets
- Paying the decedent's valid debts and taxes
- Choosing new beneficiaries when the will is unclear about intent (Correct answer)
- Distributing remaining assets according to the will
Correct answer: Choosing new beneficiaries when the will is unclear about intent
An executor carries out the will's terms and cannot substitute their own choice of beneficiaries; ambiguities are resolved by the court.
Question 7: If a person dies intestate, their probate assets are distributed according to:
- The wishes of the oldest surviving child
- The state's intestate succession statute (Correct answer)
- The decision of the probate judge based on fairness
- Federal estate tax regulations
Correct answer: The state's intestate succession statute
Without a valid will, state intestacy laws dictate the order of heirs who inherit.
CIM Estate Planning 2
A client's will leaves assets to descendants 'per stirpes.' One of her three children predeceased her, leaving two grandchildren.
How is that deceased child's share distributed?