Make A Will
Do you have a will? Is it up-to-date? Do you even know enough to write your own will? Try your knowledge on this quiz to find out
- 1.
If you die without a will, who decides what happens to your money?
- A.
The federal government
- B.
Your state government
- C.
A judge in your local probate court.
- D.
Your heirs, who must come to an agreement
Correct Answer
B. Your state governmentExplanation
Individual state laws dictate who gets what if you die without a will.Rate this question:
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- 2.
You are divorced and remarried. Your divorce agreement does not say anything about the retirement plan you started during your first marriage and you have not looked at it since you divorced. Your will leaves everything to your second spouse. Who gets your retirement plan if you die?
- A.
Spouse number one.
- B.
Spouse number two.
- C.
Each gets half.
- D.
A judge has to decide.
Correct Answer
A. Spouse number one.Explanation
Your first spouse gets the retirement plan money. Be glad that you won’t be around when spouse No. 2 finds this out.Rate this question:
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- 3.
You made a will two years ago, when you were living in another state. Will your new state recognize your will if you die?
- A.
Yes
- B.
No
- C.
Maybe, depending on your state law.
- D.
It depends on whether your will said you would be moving out-of-state
Correct Answer
C. Maybe, depending on your state law.Explanation
Many states recognize wills made in other states. But if you moved to or from a community property state from a state that doesn’t recognize community property, you need a new will.Rate this question:
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- 4.
Who should not sign as a witness to your will?
- A.
Your accountant.
- B.
Your best friend.
- C.
Your lawyer.
- D.
Anyone who is named a beneficiary in your will.
Correct Answer
D. Anyone who is named a beneficiary in your will.Explanation
: If a beneficiary signs as a witness, he’s out of luck — he just gave up his inheritance.Rate this question:
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- 5.
Your brother-in-law just died and his will named you executor, but you do not want the responsibility. Are you obligated to do the job?
- A.
No, because anyone can decline to be an executor or a co-executor.
- B.
No, because he is not a blood relative.
- C.
No, because he did not get your permission to name you executor.
- D.
Yes, because his will is a legal document and you are legally bound.
Correct Answer
A. No, because anyone can decline to be an executor or a co-executor.Explanation
Anyone can decline to be an executor or co-executor. This is why you should always ask in advance.Rate this question:
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- 6.
Your perfectly sane mother always said that each of her three children would inherit one-third of her estate in her will. She died, but that is not what her will stipulated. She left you $25,000 and the rest of her estate ($300,000) is to be split between your two sisters. If you want to contest her will, which of the following could you not use as legal grounds?
- A.
Claiming your mother was not mentally competent at the time she made the will.
- B.
Claiming that she was pressured and being unduly influenced by your two sisters.
- C.
Claiming that she repeatedly told all of you that you would each inherit the same amount.
- D.
Claiming that she had been given incompetent legal advice.
Correct Answer
C. Claiming that she repeatedly told all of you that you would each inherit the same amount.Explanation
Claiming that she repeatedly told all of you that you would each inherit the same amount. What someone tells you doesn’t matter, except in very extreme cases. It’s what’s on paper that counts. (The question asked for the answer which would NOT provide legal grounds for overriding "What’s on paper", or rather, the will.)Rate this question:
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- 7.
Which of the following is not true of a living trust?
- A.
The assets in it do not have to go through the probate process, saving legal and administrative fees.
- B.
Assets in a living trust are not exempt from federal and state estate taxes.
- C.
Its assets are listed in your court’s public record of probate assets.
- D.
If it is a revocable trust, you can dissolve it at any time during your lifetime, and put the assets back in your name.
Correct Answer
C. Its assets are listed in your court’s public record of probate assets.Explanation
The assets of a living trust are not listed in your court’s public records. Many planners believe that this is the biggest misconception people have about living trusts.Rate this question:
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- 8.
You have already made a valid will but now want to change one of the beneficiaries. Which of the following actions will not allow you to do so?
- A.
Making a new will
- B.
Having your attorney write a letter stating that you told her you wanted the beneficiary changed.
- C.
Attaching to the will a codicil (addendum) that has been signed and witnessed.
Correct Answer
B. Having your attorney write a letter stating that you told her you wanted the beneficiary changed.Explanation
: Having your attorney write a letter stating that you told her you wanted the beneficiary changed. (Remember the question asked which of the options will NOT allow you to change beneficiaries.) A new will or codicil will allow you to change beneficiaries. To make one or two changes, you don’t need the time and expense of drafting and signing a new will. Create a codicil instead.Rate this question:
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- 9.
In your current will, you listed your two children by name as beneficiaries but didn’t mention any possible or future children. You just had a new baby. What would the baby get if you died?
- A.
Nothing
- B.
The same as the other two — after all, he is your biological child.
- C.
Depends on applicable state law.
- D.
You executor would decide.
Correct Answer
C. Depends on applicable state law.Explanation
: Omitted children may, in some states, be entitled to what they would inherit if there were no will. In other states, this rule only applies to children born after the will is executed.Rate this question:
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- 10.
You detest your husband and your will reflects that you do not even mention him. If you die, what would he get?
- A.
Nothing.
- B.
All of your estate — he could claim deliberate cruelty or exclusion.
- C.
You can’t disinherit your spouse. He usually would get at least a third
- D.
The local probate judge would decide.
Correct Answer
C. You can’t disinherit your spouse. He usually would get at least a thirdExplanation
You can’t disinherit a spouse. You must be divorced. This is to protect the spouse (usually the wife) who has fewer assets from the spouse (usually the husband) who has the majority of assets.Rate this question:
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- 11.
You and your wife could never agree about who should be guardians of your children, so you never named anyone in your will. You want your brother, while she wants her best friend. If you both die, who becomes guardian?
- A.
Whichever of them can prove that the two of you named that person as guardian.
- B.
Your brother, because he is a blood relative.
- C.
The executor makes the decision.
- D.
The probate court makes the decision.
Correct Answer
D. The probate court makes the decision.Explanation
The probate court decides who is the guardian.Rate this question:
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- 12.
Several years ago, you remarried and made a new will. Your two children each will receive a cash bequest of $50,000 plus any extra money in the estate, and your new husband gets your share of the house that you bought together, held as a joint tenancy with the right of survivorship. You die before your husband. Your share of the house is now worth $200,000 and your only other asset is a $15,000 savings account. What do your children get?
- A.
Your children only get what’s left of the $15,000 after probate because, regardless of the amount you wanted your children to receive, the house is deeded to your husband.
- B.
Your husband must sell the house (because half of it is your estate and therefore must be liquidated). He must then give your children their money, plus his share of the appreciation in the house.
- C.
Your spouse must give your children $50,000 each.
- D.
None of the above.
Correct Answer
A. Your children only get what’s left of the $15,000 after probate because, regardless of the amount you wanted your children to receive, the house is deeded to your husband.Explanation
Property held as joint tenancy with right of survivorship passes to the survivor outright, regardless of any will provisions.Rate this question:
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- 13.
You want your will to set up a trust when you die. What do you have to do now?
- A.
Inform the IRS.
- B.
Get a Social Security number for the trust.
- C.
Tell the future trustee.
- D.
None of the above.
Correct Answer
D. None of the above.Explanation
You don’t need to inform the IRS, get a Social Security number for the trust or tell the future trustee until you’ve actually created the trust.Rate this question:
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- 14.
How much money can one spouse give another at death, before federal estate taxes have to start being paid?
- A.
$100,000.
- B.
$0
- C.
No federal estate taxes are due on assets given to a spouse at death.
- D.
$600,000.
Correct Answer
C. No federal estate taxes are due on assets given to a spouse at death.Explanation
There is an unlimited marital deduction. However, regular estate tax rules apply when the second spouse dies.Rate this question:
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- 15.
Starting in 1997, the amount of the estate exemption (amount of your estate that can pass tax-free to anyone other than your spouse) will rise each year (from $600,000 in 1997) until the year 2006. In that year, how much will you be allowed to exempt from estate taxes?
- A.
$1.5 million
- B.
$800,000
- C.
$ 2 Million
- D.
$1 Million
Correct Answer
D. $1 MillionExplanation
The Taxpayer Relief Act of 1997 set in place a 10-year phase-in period to raise the exemption, culminating at $1 million in 2006.Rate this question:
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- 16.
When you die, all of your tax-deferred retirement plan money is usually hit with income tax for the year of your death. That income tax can be deferred if you name the following as your beneficiary:?
- A.
Your spouse.
- B.
Your parents.
- C.
A testamentary trust (a trust that goes into effect upon your death).
- D.
Your children.
Correct Answer
A. Your spouse.Explanation
Your spouse can roll over your retirement plan assets into an IRA, thereby deferring the tax.Rate this question:
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- 17.
You own a life insurance policy for $100,000 on your life with your sister as beneficiary. If you die, how much of that $100,000 is included in your estate?
- A.
Depends on the beneficiary.
- B.
None of it.
- C.
All of it.
- D.
Half of it.
Correct Answer
C. All of it.Explanation
If you own it, it’s in your estate. But even if you own it, as long as you don’t name your estate as beneficiary, life insurance proceeds do escape probate.Rate this question:
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- 18.
Your will leaves everything to your sister but you forgot that when you took out your life insurance policy, you named your brother as beneficiary. Who gets the life insurance money?
- A.
Your sister.
- B.
Your brother.
- C.
They each get half.
- D.
The probate judge has to decide.
Correct Answer
B. Your brother.Explanation
Your brother gets the money. Life insurance proceeds go to the beneficiaries who are named, regardless of what the will says.Rate this question:
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- 19.
Your father has just given you general power of attorney. What does this mean?
- A.
He has just given you the right to appoint yourself owner of all his assets.
- B.
He has given you the right to make financial decisions and take actions on his behalf, starting now.
- C.
He has given you the right to make financial decisions and take actions on his behalf, but only if he becomes incompetent and cannot do so on his own.
- D.
He has disinherited you, but you have the right to decide who will inherit his money when he dies.
Correct Answer
B. He has given you the right to make financial decisions and take actions on his behalf, starting now.Explanation
General power of attorney means that a person can make financial decisions for another person as soon as the documents are certified. Never give anyone a general power of attorney without competent legal advice.Rate this question:
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- 20.
Your mother has just given you durable power of attorney. What does this mean?
- A.
She has just given you the right to appoint yourself owner of all her assets.
- B.
She has given you the right to make financial decisions and take actions on her behalf, starting now.
- C.
She has given you the right to make financial decisions and take actions on her behalf, but only if she becomes incompetent and cannot do so on her own.
- D.
She has disinherited you, but you have the right to decide who will inherit her money when she dies.
Correct Answer
C. She has given you the right to make financial decisions and take actions on her behalf, but only if she becomes incompetent and cannot do so on her own.Explanation
Your mother is allowing you to make her financial decisions for her once she becomes incompetent by signing a durable power of attorney. If your mother can no longer pay bills, write checks, decide where to live or sign a lease, you can do these things for her, but only after she has been declared incompetent and unable to do these things for herself.Rate this question:
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- 21.
Your friend has just made a living will. What is it?
- A.
A will that lists who is to inherit her property at her death.
- B.
A document that allows the person she has named to write checks from her account to pay medical expenses.
- C.
A document that gives very specific instructions about how she wants her medical care handled at the end of her life and when to stop certain types of care.
- D.
A will that says that no future wills can ever be made.
Correct Answer
C. A document that gives very specific instructions about how she wants her medical care handled at the end of her life and when to stop certain types of care.Explanation
A living will provides specific instructions on how a person wants his or her medical care handled. Living wills allow you to control your medical care once you’re physically and/or mentally incapable of doing so.Rate this question:
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- 22.
Which is the one piece of information that you do not have to give your children when disclosing details of your estate planning?
- A.
The location of any valuables or documents hidden away to protect against theft.
- B.
Approximately how much money you have and how much you think their inheritance will be.
- C.
The location of lists showing all your account numbers and where property and legal documents are located.
- D.
Location of instructions for your burial service and any personal wishes about distribution of assets.
Correct Answer
B. Approximately how much money you have and how much you think their inheritance will be.Explanation
You do not have to tell your children the value of your estate or how much they’re going to receive. You should, however, give them all other information about location of your assets.Rate this question:
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- 23.
After subtracting any marital deductions your estate is claiming, estate taxes are calculated based on which of the following formulas?
- A.
Your total assets.
- B.
Your total assets, less debts.
- C.
Your total assets, less debts, administrative, legal, and all estate fees.
- D.
Your total assets, less the value of any bequests you have made that were part of the lifetime exclusion amount allowed under estate tax law.
Correct Answer
C. Your total assets, less debts, administrative, legal, and all estate fees.Explanation
: It includes your total assets, less debts, administrative, legal and estate fees.Rate this question:
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- 24.
Who should always consult a lawyer or professional when preparing a will?
- A.
A person who is unsure who to name as beneficiary.
- B.
A person who plans to name several different people — including non-family members — as beneficiaries.
- C.
A person whose estate exceeds the amount of the federal estate exemption laws.
- D.
A person who plans to include a stinging rebuke of a family member in the will
Correct Answer
C. A person whose estate exceeds the amount of the federal estate exemption laws.Explanation
A person whose assets are worth more than the amount of the estate exemption should always consult a lawyer.Rate this question:
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- 25.
You need the following documents to have a properly established estate plan, regardless of income:?
- A.
A will.
- B.
A will, living will, durable power of attorney and health care proxy.
- C.
A will, living trust, testamentary trust and estate power of attorney.
- D.
None of the above.
Correct Answer
B. A will, living will, durable power of attorney and health care proxy.Explanation
: A properly drawn plan includes a will, living will, durable power of attorney and a health care proxy.Rate this question:
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Current Version
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Jan 04, 2013Quiz Edited by
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Sep 02, 2009Quiz Created by
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