CLA/CP Exam Estate Planning and Probate 4

Question 1

Which generation-skipping transfer tax exemption feature allows unused exemption to be allocated to transfers made during life or at death?

Accepted Answer

Portability

Answer

Portability allows a surviving spouse to elect to use the deceased spouse's unused federal estate and gift tax exemption (DSUE).

Question 2

Which document allows an individual to state preferences for end-of-life medical treatment in advance?

Accepted Answer

Living will / advance directive

Answer

A living will or advance directive records a person's specific instructions about life-sustaining treatment if they become unable to communicate.

Question 3

What is the primary tax advantage of gifting appreciated property through a charitable remainder trust (CRT)?

Accepted Answer

The grantor avoids all capital gains tax immediately and receives a partial charitable deduction

Answer

Transferring appreciated property to a CRT allows the trustee to sell it without immediate capital gains tax, and the grantor receives an upfront charitable income tax deduction.

Question 4

What term describes the process of distributing a deceased person's share equally among their descendants when a beneficiary predeceases the testator?

Accepted Answer

Per stirpes

Answer

Per stirpes distribution means a deceased beneficiary's share passes to their descendants in equal shares by representation.

Question 5

Under the Uniform Trust Code, what duty requires a trustee to treat all beneficiaries—current and remainder—impartially?

Accepted Answer

Duty of impartiality

Answer

The duty of impartiality requires trustees to balance the competing interests of income beneficiaries and remainder beneficiaries when investing and distributing trust assets.

CLA/CP Exam Practice Test

CLA/CP Exam Practice Test

CLA/CP Exam Estate Planning and Probate 4