NALA Estate Planning and Probate Questions and Answers 1 — Questions and Answers
Question 1: An individual appointed by the probate court to manage and distribute the assets of a person who died without a valid will is known as a(n):
- Trustee
- Executor
- Administrator (Correct answer)
- Guardian ad litem
Correct answer: Administrator
An administrator is appointed by the court to manage an estate when the decedent died intestate (without a will). An executor is named in a will by the testator to carry out the will's provisions.
Question 2: A testator executed a valid will five years ago. Now, she wishes to make a minor change to add a new beneficiary without rewriting the entire will. Which legal document should be prepared to accomplish this?
- A durable power of attorney
- A codicil (Correct answer)
- A letter of instruction
- A self-proving affidavit
Correct answer: A codicil
A codicil is a legal document used to make amendments or additions to an existing will. To be valid, it must be executed with the same legal formalities as the original will, such as being signed and witnessed.
Question 3: A client's primary goal is to ensure their assets are transferred to their children upon death while avoiding the public, often lengthy, and costly probate court process. Which estate planning tool is most effective for achieving this?
- A revocable living trust (Correct answer)
- A simple will
- Joint tenancy with rights of survivorship for all assets
- A holographic will
Correct answer: A revocable living trust
A revocable living trust is specifically designed to hold assets for the benefit of another. Assets properly transferred into the trust (funded) before death bypass the probate process, allowing for a private and typically faster transfer to the beneficiaries as directed by the trust document.
Question 4: Which of the following is considered a non-probate asset that passes directly to a designated person by operation of law, rather than through the terms of a will?
- A vehicle titled solely in the decedent's name
- A personal savings account with no named beneficiary
- A piece of real estate owned as a tenant in common
- A life insurance policy with a named beneficiary (Correct answer)
Correct answer: A life insurance policy with a named beneficiary
Non-probate assets pass outside of the will based on a contract or titling. A life insurance policy is a contract where the proceeds are paid directly to the beneficiary named in the policy, thus bypassing the probate process.
Question 5: If a person dies without a valid will, their property is distributed to their heirs based on state statutes. This legal framework for distribution is known as:
- The doctrine of ademption
- The elective share statute
- The laws of intestate succession (Correct answer)
- The rule against perpetuities
Correct answer: The laws of intestate succession
Intestate succession is the legal process that occurs when a person dies without a will (intestate). Each state has specific laws that dictate the order in which relatives will inherit the decedent's property.
Question 6: After a personal representative is appointed for an estate, one of the first and most critical duties is to provide formal notice to all known and unknown parties to whom the decedent owed money. This formal process is called:
- Filing the petition for administration
- Publishing a notice to creditors (Correct answer)
- Preparing the final accounting
- Distributing assets to beneficiaries
Correct answer: Publishing a notice to creditors
The personal representative is legally required to provide notice to creditors, typically by mailing a notice to known creditors and publishing a notice in a local newspaper for unknown creditors. This action establishes a statutory time limit for creditors to file claims against the estate.
NALA Estate Planning and Probate Questions and Answers 1
An individual appointed by the probate court to manage and distribute the assets of a person who died without a valid will is known as a(n):