Question 1

A child who is left nothing under the parent's will is called a

Accepted Answer

A) beneficiary. 
B) decedent. 
C) pretermitted child. 
D) settlor. 
A) beneficiary. 
B) decedent. 
C) pretermitted child. 
D) settlor. C

Question 2

Which type of automobile insurance covers the cost of damage caused by fire,theft,or vandalism?

Accepted Answer

A) liability insurance 
B) comprehensive insurance 
C) collision insurance 
D) uninsured motorist insurance 
A) liability insurance 
B) comprehensive insurance 
C) collision insurance 
D) uninsured motorist insurance B

Question 3

Dr.Gavornne advises his very ill patients to prepare a living will.The purpose of a living will is to

Accepted Answer

A) make a disposition of property. 
B) express a desire not to have extreme medical treatment that would prolong their lives. 
C) transfer life insurance. 
D) consent to organ donation. 
A) make a disposition of property. 
B) express a desire not to have extreme medical treatment that would prolong their lives. 
C) transfer life insurance. 
D) consent to organ donation. B

Question 4

Jose and Juanita are first cousins.Jose lives in San Francisco,California;Juanita lives in Toronto,Canada.The two have met only once in life and may never meet again.Nonetheless,because they are blood relatives,Juanita has an insurable interest in Jose's life.

Accepted Answer

A) True 
 B)False

Question 5

How many witnesses are required for a nuncupative will to be valid?

Accepted Answer

A) one 
B) two 
C) five 
D) seven 
A) one 
B) two 
C) five 
D) seven

Question 6

Which is true of an inter vivos trust?

Accepted Answer

A) It is created by a will. 
B) The grantor cannot serve as trustee. 
C) It is established while the grantor is still alive. 
D) Such a trust is not revocable. 
A) It is created by a will. 
B) The grantor cannot serve as trustee. 
C) It is established while the grantor is still alive. 
D) Such a trust is not revocable.

Question 7

Parents may not disinherit their minor children without good reason.

Accepted Answer

A) True 
 B)False

Question 8

Singleton,an 80-year-old widower,remarried.The next day,he made a will leaving everything to his son,Joey.A week after his marriage,Singleton died.How will his estate be handled?

Accepted Answer

In a community property state,a spouse i

Question 9

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 10

Which of the following is NOT required to create a valid trust?

Accepted Answer

A) legal age and sound mind of the grantor 
B) witnesses 
C) a beneficiary(ies) 
D) property transferred to the trust 
A) legal age and sound mind of the grantor 
B) witnesses 
C) a beneficiary(ies) 
D) property transferred to the trust

Question 11

Traditional health insurance plans are

Accepted Answer

A) managed care plans. 
B) value-based plans. 
C) pay for service plans. 
D) HMO plans. 
A) managed care plans. 
B) value-based plans. 
C) pay for service plans. 
D) HMO plans.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Reva prepares and signs a document that she intends to be her will.If she has not followed the legal technicalities of her state regarding executing a will,the court may not enforce the will.

Accepted Answer

A) True 
 B)False

Question 14

The person who receives the proceeds from an insurance policy is the

Accepted Answer

A) owner. 
B) testator. 
C) insurer. 
D) beneficiary. 
A) owner. 
B) testator. 
C) insurer. 
D) beneficiary.

Question 15

Jacob has been quite ill.When three of his neighbors come to visit one day,he tells them that he is dying and that he wants them to witness his oral will.In some states,he can validly dispose of his personal property by his witnessed,oral statements.

Accepted Answer

A) True 
 B)False

Question 16

Legal requirements for a will depend on state law,but generally include all but which of the following?

Accepted Answer

A) a writing 
B) signatures of at least three witnesses 
C) the testator's signature 
D) witnesses who will not inherit under the will 
A) a writing 
B) signatures of at least three witnesses 
C) the testator's signature 
D) witnesses who will not inherit under the will

Question 17

The major disadvantage of a trust is

Accepted Answer

A) expense. 
B) lack of privacy. 
C) an often lengthy probate process. 
D) lack of control. 
A) expense. 
B) lack of privacy. 
C) an often lengthy probate process. 
D) lack of control.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Pamela applies for a life insurance policy with Forever Young Insurance Company.When completing the application form about past surgeries,Pamela forgot about a past outpatient surgery when she had an infected hang-nail removed and her toe treated.One year after issuing the policy,Pamela died suddenly from a brain aneurysm.Forever Young denies payment under the policy based on misrepresentation.If Pamela's sister,Paula,sues Forever Young,she will most likely

Accepted Answer

A) win,because once an application has been accepted,an insurer may not use a misrepresentation on the application to avoid liability. 
B) win,because Pamela's misrepresentation was not a material fact and did not increase Forever Young's risk in insuring Pamela's life. 
C) lose,because Pamela's application contained a misrepresentation of material fact. 
D) lose,because an insurer can always use any misrepresentation on an application to avoid paying. 
A) win,because once an application has been accepted,an insurer may not use a misrepresentation on the application to avoid liability. 
B) win,because Pamela's misrepresentation was not a material fact and did not increase Forever Young's risk in insuring Pamela's life. 
C) lose,because Pamela's application contained a misrepresentation of material fact. 
D) lose,because an insurer can always use any misrepresentation on an application to avoid paying.

Question 20

The percentage of a decedent's estate that a spouse can claim is called a forced share.

Accepted Answer

A) True 
 B)False

Exam 44: Planning for the Future: Wills, Trusts and Insurance

A child who is left nothing under the parent's will is called a

Which type of automobile insurance covers the cost of damage caused by fire,theft,or vandalism?

Dr.Gavornne advises his very ill patients to prepare a living will.The purpose of a living will is to

Jose and Juanita are first cousins.Jose lives in San Francisco,California;Juanita lives in Toronto,Canada.The two have met only once in life and may never meet again.Nonetheless,because they are blood relatives,Juanita has an insurable interest in Jose's life.

How many witnesses are required for a nuncupative will to be valid?

Which is true of an inter vivos trust?

Parents may not disinherit their minor children without good reason.

Singleton,an 80-year-old widower,remarried.The next day,he made a will leaving everything to his son,Joey.A week after his marriage,Singleton died.How will his estate be handled?

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.

Which of the following is NOT required to create a valid trust?

Traditional health insurance plans are

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

Reva prepares and signs a document that she intends to be her will.If she has not followed the legal technicalities of her state regarding executing a will,the court may not enforce the will.

The person who receives the proceeds from an insurance policy is the

Jacob has been quite ill.When three of his neighbors come to visit one day,he tells them that he is dying and that he wants them to witness his oral will.In some states,he can validly dispose of his personal property by his witnessed,oral statements.

Legal requirements for a will depend on state law,but generally include all but which of the following?

The major disadvantage of a trust is

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

The percentage of a decedent's estate that a spouse can claim is called a forced share.

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