CRPC Estate Planning Objectives 2

Question 1

Which estate planning tool allows an individual to transfer assets to a trust during their lifetime while retaining control and avoiding probate?

Accepted Answer

Revocable living trust

Answer

A revocable living trust is created during the grantor's lifetime, allows the grantor to retain control, and transfers assets outside of probate upon death.

Question 2

What is the primary purpose of a durable power of attorney in an estate plan?

Accepted Answer

To authorize someone to act on your behalf if you become incapacitated

Answer

A durable power of attorney remains effective even if the principal becomes incapacitated, allowing the named agent to manage financial affairs.

Question 3

Under current federal law, the estate tax marital deduction allows a surviving spouse to receive:

Accepted Answer

An unlimited amount of assets free of estate tax

Answer

The unlimited marital deduction allows a decedent to transfer any amount of property to a surviving U.S. citizen spouse free of federal estate tax.

Question 4

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

Accepted Answer

Provide income to a surviving spouse while controlling ultimate distribution of assets

Answer

A QTIP trust qualifies for the marital deduction, provides income to the surviving spouse, but allows the decedent to direct where the principal passes after the spouse's death.

Question 5

Which document specifies an individual's wishes regarding medical treatment if they become unable to communicate their decisions?

Accepted Answer

Advance healthcare directive (living will)

Answer

An advance healthcare directive or living will outlines a person's medical treatment preferences when they cannot speak for themselves.

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC Estate Planning Objectives 2