Question 1

Which of the following is generally covered under casualty insurance?

Accepted Answer

A)  Employee theft or embezzlement. 
B)  Disability. 
C)  Transportation insurance. 
D)  Vandalism. 
A)  Employee theft or embezzlement. 
B)  Disability. 
C)  Transportation insurance. 
D)  Vandalism. D

Question 2

Property of a person who dies without a will is distributed according to intestacy laws.

Accepted Answer

A) True 
 B)False  True

Question 3

An executor who is related to the testator is not entitled to compensation.

Accepted Answer

A) True 
 B)False  False

Question 4

April purchased a life insurance policy on herself.On her death,the proceeds of the insurance were to be paid to her minor child,Ryan.Ryan is the beneficiary.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following property is not affected by a will?

Accepted Answer

A)  Life insurance. 
B)  Joint tenancy property. 
C)  Retirement benefits. 
D)  All of the above. 
A)  Life insurance. 
B)  Joint tenancy property. 
C)  Retirement benefits. 
D)  All of the above.

Question 6

A later will revokes a prior will only if that revocation is clearly stated.

Accepted Answer

A) True 
 B)False

Question 7

Under the Uniform Anatomical Gift Act:

Accepted Answer

A)  an individual may indicate the desire to be an organ donor by putting a provision in his will. The provision will take effect after probate of the will. 
B)  the willingness to be an organ donor may be indicated by signing an organ donation card in the presence of one disinterested witness. 
C)  family members of a decedent have no right to make a gift of the decedent's organs if the decedent did not make an affirmative indication of the desire to be a donor during her lifetime. 
D)  an effective donation may be made by an individual in a will or on a witnessed organ-donation card or by family members after the person's death as long as the person did not indicate a desire not to be a donor. 
A)  an individual may indicate the desire to be an organ donor by putting a provision in his will. The provision will take effect after probate of the will. 
B)  the willingness to be an organ donor may be indicated by signing an organ donation card in the presence of one disinterested witness. 
C)  family members of a decedent have no right to make a gift of the decedent's organs if the decedent did not make an affirmative indication of the desire to be a donor during her lifetime. 
D)  an effective donation may be made by an individual in a will or on a witnessed organ-donation card or by family members after the person's death as long as the person did not indicate a desire not to be a donor.

Question 8

In purchasing life insurance,Kelsey concealed the fact that she has a muscular disease.The insurance company can void the policy if the muscular disease is found to be a material fact.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true about wills?

Accepted Answer

A)  A will can be amended to change specific terms by execution of a codicil. 
B)  The testatrix cannot disinherit her minor children without stating a reason in the will. 
C)  If the will meets the legal technicalities, the surviving spouse cannot override it. 
D)  Once a will is written, it cannot be changed. 
A)  A will can be amended to change specific terms by execution of a codicil. 
B)  The testatrix cannot disinherit her minor children without stating a reason in the will. 
C)  If the will meets the legal technicalities, the surviving spouse cannot override it. 
D)  Once a will is written, it cannot be changed.

Question 10

The major disadvantage of a trust is:

Accepted Answer

A)  expense. 
B)  lack of privacy. 
C)  it may have to go through an often lengthy probate process. 
D)  lack of control. 
A)  expense. 
B)  lack of privacy. 
C)  it may have to go through an often lengthy probate process. 
D)  lack of control.

Question 11

Which of the following is not required to create a valid trust:

Accepted Answer

A)  mental capacity of the grantor. 
B)  witnesses. 
C)  a beneficiary(ies). 
D)  property transferred to the trust. 
A)  mental capacity of the grantor. 
B)  witnesses. 
C)  a beneficiary(ies). 
D)  property transferred to the trust.

Question 12

If Walter becomes incompetent to manage his affairs:

Accepted Answer

A)  his chosen attorney-in-fact can make decisions for him if he appointed the person in a durable power of attorney with a springing power to become effective upon Walter's incompetence. 
B)  a court will appoint a guardian if Walter had no power of attorney. 
C)  his will becomes effective, and his executor or executrix will manage his business and personal decisions. 
D)  Both a and b are correct. 
A)  his chosen attorney-in-fact can make decisions for him if he appointed the person in a durable power of attorney with a springing power to become effective upon Walter's incompetence. 
B)  a court will appoint a guardian if Walter had no power of attorney. 
C)  his will becomes effective, and his executor or executrix will manage his business and personal decisions. 
D)  Both a and b are correct.

Question 13

Mountain Ridge Bank has been named trustee for a $100,000 trust Fred and Martha Betts established for "the living children of the grantors." List the requirements for establishing a trust.Identify the primary obligation of the trustee and discuss the fiduciary duty of the trustee.

Accepted Answer

There are four requirements for establis

Question 14

In order to travel extensively and not worry about handling her affairs,Lee transfers most of her assets into a trust,with her bank serving as trustee.She has created:

Accepted Answer

A)  a travel trust. 
B)  a testamentary trust. 
C)  a constructive trust. 
D)  an inter vivos trust. 
A)  a travel trust. 
B)  a testamentary trust. 
C)  a constructive trust. 
D)  an inter vivos trust.

Question 15

Parents may not disinherit their minor children without good reason.

Accepted Answer

A) True 
 B)False

Question 16

Identify four ways a trust can be terminated.

Accepted Answer

A trust ends: (a)on the date indicated b

Question 17

Per capita means each heir gets an equal share of an estate.

Accepted Answer

A) True 
 B)False

Question 18

Abraham has just purchased his first car.His bank,First State Bank,loaned him the money to buy the car and has required him to purchase insurance to protect the car as the collateral for the loan.Which basic types of coverage should Abraham buy to satisfy the bank requirement and to protect himself from the risks of operating an automobile?

Accepted Answer

A)  Collision coverage only. 
B)  Collision and comprehensive coverage only. 
C)  Collision, uninsured motorist, and comprehensive coverage. 
D)  Collision, uninsured motorist, comprehensive, and liability coverage. 
A)  Collision coverage only. 
B)  Collision and comprehensive coverage only. 
C)  Collision, uninsured motorist, and comprehensive coverage. 
D)  Collision, uninsured motorist, comprehensive, and liability coverage.

Question 19

Under which of the following does the insurer promise to pay the insured a fixed yearly amount,as guaranteed income,after the insured attains a specified age?

Accepted Answer

A)  Straight life policy. 
B)  Whole life policy. 
C)  Universal life policy. 
D)  Annuity contract. 
A)  Straight life policy. 
B)  Whole life policy. 
C)  Universal life policy. 
D)  Annuity contract.

Question 20

Estate planning has two primary goals: to ensure property is distributed as the owner desires and to minimize estate taxes.

Accepted Answer

A) True 
 B)False

Exam 45: Planning For The Future: Wills,Trusts,And Insurance

Which of the following is generally covered under casualty insurance?

Property of a person who dies without a will is distributed according to intestacy laws.

An executor who is related to the testator is not entitled to compensation.

April purchased a life insurance policy on herself.On her death,the proceeds of the insurance were to be paid to her minor child,Ryan.Ryan is the beneficiary.

Which of the following property is not affected by a will?

A later will revokes a prior will only if that revocation is clearly stated.

Under the Uniform Anatomical Gift Act:

In purchasing life insurance,Kelsey concealed the fact that she has a muscular disease.The insurance company can void the policy if the muscular disease is found to be a material fact.

Which of the following is true about wills?

The major disadvantage of a trust is:

Which of the following is not required to create a valid trust:

If Walter becomes incompetent to manage his affairs:

Mountain Ridge Bank has been named trustee for a $100,000 trust Fred and Martha Betts established for "the living children of the grantors." List the requirements for establishing a trust.Identify the primary obligation of the trustee and discuss the fiduciary duty of the trustee.

In order to travel extensively and not worry about handling her affairs,Lee transfers most of her assets into a trust,with her bank serving as trustee.She has created:

Parents may not disinherit their minor children without good reason.

Identify four ways a trust can be terminated.

Per capita means each heir gets an equal share of an estate.

Under which of the following does the insurer promise to pay the insured a fixed yearly amount,as guaranteed income,after the insured attains a specified age?

Estate planning has two primary goals: to ensure property is distributed as the owner desires and to minimize estate taxes.

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