PFS Estate Planning

Question 1

Which of the following documents is most commonly used to transfer assets after death?

Accepted Answer

Will

Answer

Living trust

Answer

Power of attorney

Answer

Letter of intent

Question 2

What is the main advantage of using a revocable living trust in estate planning?

Accepted Answer

It bypasses the probate process

Answer

It eliminates estate taxes

Answer

It allows total asset protection from creditors

Answer

It ensures Medicaid eligibility

Question 3

Which type of trust becomes irrevocable upon the death of the grantor?

Accepted Answer

Revocable trust

Answer

Charitable remainder trust

Answer

Bypass trust

Answer

Generation-skipping trust

Question 4

What does the term 'step-up in basis' refer to in estate planning?

Accepted Answer

Adjusting the cost basis of inherited assets

Answer

An increase in estate value for tax purposes

Answer

Adding a new beneficiary to a trust

Answer

Raising the income tax bracket

Question 5

Which of the following is NOT typically a goal of estate planning?

Accepted Answer

Increasing investment risk

Answer

Minimizing estate taxes

Answer

Providing for dependents

Answer

Avoiding probate

Question 6

What is the role of an executor in estate administration?

Accepted Answer

Oversee the estate and distribute assets

Answer

Serve as a trustee for a trust

Answer

Manage the decedent’s healthcare decisions

Answer

Determine guardianship for minors