CSS Estate Planning & Wealth Transfer

Question 1

Which document allows a person to designate someone to manage their financial affairs if they become incapacitated?

Accepted Answer

Durable power of attorney

Answer

Living will

Answer

Revocable trust

Answer

Beneficiary designation

Question 2

What is the primary advantage of a revocable living trust over a will?

Accepted Answer

It avoids probate

Answer

It reduces estate taxes

Answer

It provides more asset protection

Answer

It is legally binding immediately

Question 3

Under current US law, what is the annual gift tax exclusion per recipient (2024)?

Accepted Answer

$18,000

Answer

$10,000

Answer

$15,000

Answer

$20,000

Question 4

Which type of trust is commonly used to remove life insurance proceeds from a taxable estate?

Accepted Answer

Irrevocable life insurance trust (ILIT)

Answer

Charitable remainder trust

Answer

Qualified personal residence trust

Answer

Special needs trust

Question 5

What does 'stepped-up basis' mean for inherited assets?

Accepted Answer

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

Answer

The asset is revalued at the decedent's original purchase price

Answer

The heir must pay capital gains on all appreciation

Answer

The IRS steps up the estate tax rate

Question 6

Which estate planning tool allows seniors to donate assets to charity while retaining an income stream during their lifetime?

Accepted Answer

Charitable remainder trust (CRT)

Answer

Donor-advised fund

Answer

Qualified opportunity zone fund

Answer

Dynasty trust