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American College Fundamentals of Estate Planning test Sample Questions:
1. Which of the following statements concerning the inclusion and valuation of all or part of a commercial annuity in the estate of an annuitant is correct?
A) An annuity is includible to the extent of the value determined by the special 10-year averaging rule.
B) A joint and survivor annuity is includible to the extent that the survivor paid the purchase price of the contract.
C) If the executor elects the alternate valuation date, an annuity is includible at its replacement cost 6 months after death.
D) A life annuity with a period certain is includible to the extent of the present value of any remaining guaranteed payments.
2. Which of the following types of real property ownership will be deemed to be a tenancy in common?
A) Two brothers own equal fractional interests in a piece of real property and at the death of one of the brothers the survivor will own the entire piece of property.
B) Two brothers own equal amounts of all the common stock in a corporation, the only asset of which is real property.
C) Two brothers are equal partners in a general partnership that owns a piece of real property used in the partnership business.
D) Two brothers own equal undivided interests in a piece of real property, with each brother being able to divest himself of his interest by sale, gift, or will.
3. Which of the following members of the estate planning team is responsible for assuring that the client's intentions are expressed in documents that will carry out the final plan?
A) The lawyer
B) The trust officer
C) The investment counselor
D) The life underwriter
4. All the following will be brought back into the donor's gross estate for federal estate tax purposes EXCEPT
A) a gratuitous transfer of real property to a revocable intervivos trust
B) a gratuitous transfer of real property with a reserved right to use and enjoy it for life
C) the gift taxes paid last year on a gratuitous transfer of real property
D) an outright, gratuitous transfer of real property in contemplation of death
5. All the following are proper actions on the part of a trustee EXCEPT
A) purchasing assets for personal use from the trust at their fair market value with the approval of all beneficiaries
B) investing trust assets in speculative securities in accordance with the provisions of the trust instrument
C) placing cash from the sale of securities in a non-interest bearing checking account for an extended period of time
D) purchasing securities in good faith from a third party just prior to a sharp decrease in their value
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: A | Question # 4 Answer: D | Question # 5 Answer: C |







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