Deck 48: Wills and Trusts

Question 1

A testator can revoke a will by having someone else tear it up in the testator's presence and at his or her direction.

Answer 1

True

Question 2

For a will to be valid, the testator's signature must appear on it, generally at the end.

Answer 2

True

Question 3

One way to transfer property outside the probate process, and thereby avoid the costs, is to own property in joint tenancy.

Answer 3

True

Question 4

Because no state limits how property and obligations are transferred on death, a person can freely direct the passage by any means and many methods.

Question 5

Because the rules of descent are uniform among the states, it is necessary to refer only to the language of any state's statute when addressing intestacy distribution.

Question 6

The formalities of a will are intended to ensure that the testator understood his or her actions at the time a will was made and to help prevent fraud.

Question 7

If a will does not provide how an estate will be distributed to grandchildren, under the per stirpes method of distribution, all heirs in a certain class inherit equally.

Question 8

An owner can transfer property outside the probate process by making gifts of property while the owner is still living.

Question 9

A valid will is one that represents the maker's intent to transfer and distribute his or her property.

Question 10

A testator must be able to remember the persons who would naturally be heirs to the estate, as the testator is required to give the estate to the natural heirs.

Question 11

If a legatee dies before the testator or before a legacy is payable, an abatement results, which means that the legatee's heirs receive reduced benefits.

Question 12

Because a general bequest or devise does not single out any particular item of property to be transferred by will, a testator does not have to know the nature and extent of his or her property to create a valid will.

Question 13

The laws governing how property is transferred on the death of its owner are a corollary to the concept of the private ownership of property.

Question 14

In most states, the testator's marriage after the execution of a will may affect the distribution of the estate.

Question 15

Under intestacy laws, if no heirs exist, then the state assumes ownership of the property of an estate.

Question 16

Under intestacy laws, a surviving spouse receives the decedent's entire estate.

Question 17

Once a will is admitted to probate, the decedent's family members can agree among themselves how to distribute the estate, and no court order is needed to clear title to the assets.

Question 18

Intestacy laws determine the distribution of property of one who dies without a valid will, and attempt to carry out the likely intent and wishes of the decedent.

Question 19

A divorce occurring after a will has been written does not revoke dispositions of property made under the will to the former spouse.

Question 20

As a final declaration of how a person desires to have property disposed of after death, a will can serve no purpose other than distribution of the property.

Question 21

The elements of a trust include actual delivery by the grantor to the beneficiary with the intent of passing title.

Question 22

A living will is a will in the usual sense that it disposes of property.

Question 23

The costs of long-term improvements to the assets of a trust and the proceeds from a sale of the assets are allocated to the principal's beneficiary.

Question 24

A durable power of attorney authorizes an individual to act on behalf of another only if he or she is not incapacitated-which is why the power is called durable .

Question 25

If a trustee fails to comply with the terms of the trust or the governing statute, he or she is personally liable for any loss.

Question 26

A party should always check the succession and inheritance laws of the state most likely to be involved in the resolution of a conflict related to the settling of an estate because

A)the Uniform Probate Code codified principles covering such disputes.
B)the requirements for a will and its probate are uniform among the states.
C)those laws vary widely among the states.
D)almost half of the states have enacted some part of the UPC.

Question 27

In an irrevocable living trust , legal title to the trust property passes to the beneficiary.

Question 28

Faye executes a will in which Gail is appointed to administer the will. After Faye dies, Gail lacks the capacity to serve, and a court appoints Hedy to handle the probate of Faye's estate. In this situation, the administrator is

A)Faye.
B)Gail.
C)Hedy.
D)the court.

Question 29

With a resulting trust , assets held in the trust can pass to the heirs after going through probate.

Question 30

With a constructive trust, a court declares a property owner to be a trustee for parties who are, in fairness, entitled to the benefits that flow from the property.

Question 31

On the death of the owner, property can be transferred through a will, a trust, or a state law prescribing its distribution. This indicates our laws require that, on death, title to property must be

A)dissociated from a decedent's estate.
B)disposed of by a trustee.
C)dissolved in favor of a beneficiary.
D)delivered in full somewhere.

Question 32

A spendthrift trust provides for a beneficiary by giving him or her sufficient funds to maintain an extravagant lifestyle and still meet his or her obligations.

Question 33

A trust can be created to take effect during a person's lifetime but not after a person's death because the grantor must remain in control of the trust assets.

Question 34

Health-care powers of attorney have grown in importance as medical technology has enabled physicians and hospitals to keep people alive for ever-increasing periods of time.

Question 35

A trust is a popular estate-planning option because at the grantor's death, assets held in a living trust revert to the decedent's estate.

Question 36

Determining in advance how one's property and obligations should be transferred on death is the process of

A)risk management.
B)intestacy law.
C)debt maintenance.
D)estate planning.

Question 37

The trustee's duty of loyalty requires that he or she act in the exclusive interest of the grantor or settlor.

Question 38

Because estate planning involves difficult decisions about the future, powers of attorney and living wills are often executed in conjunction with a will or trust.

Question 39

A trust must be express because the essential elements of a trust include a writing.

Question 40

If a will does not provide how an estate will be distributed to grandchildren, under the per capita method of distribution, an heir takes the share that his or her deceased parent would have been entitled to inherit.

Question 41

Leif executes a will in which he leaves everything to his spouse, Marta, and in which he appoints Nora to administer the estate. The will must be signed by

A)Leif only.
B)Leif and Marta only.
C)Leif, Marta, and Nora.
D)a probate judge.

Question 42

Nadia does not execute a will before she dies. The distribution of her estate is regulated by

A)the comprehension of the natural objects of her bounty.
B)the decisions of a trustee appointed by a probate court.
C)the state's intestacy statutes.
D)the terms of a different decedent's will disposing of a similar estate.

Question 43

In her will, Delia makes a gift of $10,000 to Esteban. This is

A)a bequest.
B)a devise.
C)a legacy.
D)residuary.

Question 44

Under intestacy laws, if Darlene has no heirs, then the property of her estate

A)passes to a person designated by a probate court.
B)is transferred to the state.
C)devolves to a preselected charity.
D)is held in trust for future beneficiaries.

Question 45

Emmett has two children, Franklin and Genevieve, both of whom predecease Emmett. Franklin is survived by his daughter Hermione. Genevieve is survived by her sons Ishmael and Joshua. On Emmett's death, if the distribution of his estate is per stirpes , Hermione will receive

A)everything.
B)nothing.
C)one-half.
D)one-third.

Question 46

Grover does not execute a will before he dies. His survivors include his spouse Helene and their two children, Irene and Johann. With respect to Grover's estate, under intestacy laws, Helene will probably receive

A)everything.
B)nothing.
C)one-half.
D)one-third.

Question 47

Patty executes a will, leaving her estate to her spouse Quentin. They have a daughter Rita. Later, Patty and Quentin divorce. Patty does not execute a new will before she dies. With respect to Patty's estate, Quentin is entitled to

A)everything.
B)nothing.
C)one-half.
D)one-third.

Question 48

Leda executes a separate written instrument to revoke her prior will. This separate document is

A)a residuary clause.
B)a codicil.
C)none of the choices.
D)a type of trust.

Question 49

Kit has two children, Lea and Merl, both of whom predecease Kit. Lea is survived by her son Nat. Merl is survived by her daughters Opal and Pearl. On Kit's death, if the distribution of the estate is per capita, Pearl will receive

A)everything.
B)nothing.
C)one-half.
D)one-third.

Question 50

Carl dies without a will, survived by his granddaughter Doral and her brother Elton. The grandchildren are Carl's

A)collateral heirs.
B)decedents.
C)trustees.
D)lineal heirs.

Question 51

Jason does not execute a will before he dies. With respect his estate, the assets are distributed first to

A)pay his debts.
B)support his surviving spouse and children.
C)benefit his collateral heirs.
D)satisfy gifts to his lineal heirs.

Question 52

A will must comply with statutory formalities to ensure that the testator understood his or her actions at the making of the will. These formalities are intended to

A)raise revenue.
B)support probate courts, attorneys, and other professionals.
C)prevent fraud.
D)all of the choices.

Question 53

Sally handwrites her will on a sheet of blank paper. This will is

A)invalid.
B)holographic.
C)nuncupative.
D)residuary.

Question 54

Diego executes a will that clearly states his brother Enrique is to receive none of Diego's estate, which is to be distributed entirely to Diego's friend Frieda. At the time of Diego's death, Frieda has died, leaving no heirs, and Diego's only surviving natural heir is Enrique. Most likely, the estate will be distributed to

A)no one.
B)Frieda in abatement.
C)Enrique.
D)the state.

Question 55

Molly is not married and has no children. She executes a will, disposing of her estate to her sister Nina. Later, Molly marries Owen. They have no children. Molly does not execute a new will before she dies. With respect to Molly's estate, Owen is entitled to

A)everything.
B)nothing.
C)one-half.
D)one-third.

Question 56

Finn does not execute a will before he dies, with no surviving spouse or child. His survivors include his grandson Gage and his niece Hailey. In most states, his estate would pass to

A)Gage only.
B)Hailey only.
C)Gage and Hailey in equal measure.
D)the state.

Question 57

In his will, Rowan makes a gift of a rare Shakespeare folio to his sister Tiffany. Tiffany dies before her brother, survived by her daughter Uma. On Rowan's death, the gift of the folio

A)fails.
B)lapses.
C)is made to Uma.
D)escheats.

Question 58

Marie is asked to serve as a witness to Nicki's will. To qualify, Marie must be

A)a U.S. citizen.
B)all of the choices.
C)at least eighteen years old.
D)mentally competent.

Question 59

Under a certain state's law, the legal age for executing a will is eighteen. In that state, Mocha writes a will when she is diagnosed with a life-threatening illness at age sixteen. Mocha dies at age twenty-one. Her will is

A)valid because of her diagnosis.
B)valid because she was of sound mind.
C)valid because of her age at death.
D)invalid.

Question 60

According to the terms of Kim's will, specific gifts are made, and taxes and other estate debts are paid. The assets of the estate that remain are most likely to be distributed through

A)a codicil.
B)a type of trust.
C)none of the choices.
D)a residuary clause.

Question 61

A party can be given the power to choose what type of and how much medical treatment a person who is unable to make such decisions will receive through

A)a living will.
B)a durable power of attorney.
C)a health-care power of attorney.
D)a constructive trust.

Question 62

An advance health directive that allows a person to control what medical treatment he or she may receive after a serious accident or illness is

A)a living will.
B)a durable power of attorney.
C)a health-care power of attorney.
D)a constructive trust.

Question 63

Joe establishes a trust for the benefit of his grandchildren. The trust will fail if

A)the trust fails to name a trustee.
B)none of the choices
C)the named trustee will not serve.
D)the named trustee can not serve.

Question 64

Kai establishes a trust, naming Loo as the trustee and giving him discretionary investment power. A state statute confines trustees to investments in conservative debt securities. In investing the trust assets, Loo does not follow the statute, but generally exercises the degree of care that a prudent person would exercise in his personal affairs. In this situation, Loo is liable for

A)not complying with the purposes of the trust.
B)none of the choices
C)failing to follow the statute.
D)exercising the same degree of the care as he would in his own affairs.

Question 65

Wanda, an elderly woman, is diagnosed with cancer. The prognosis is that her condition will worsen and that eventually she will become too weak to breathe without the assistance of a respirator. She does not want to be kept alive in a "vegetative state." What are Wanda's options?

Question 66

Aron owns a certificate of deposit with Beth, his sister, and an apartment building with Carl, his brother, in both cases as a joint tenant. Aron, a partner with Debra in Aron & Debra Accountants, obtains a life insurance policy with Debra as the designated beneficiary. Aron writes a will that gives particular items of personal property, as well as specific amounts of cash, to his children and his friends. The will leaves the residue of the estate to Eve, Aaron's favorite cousin. Carl dies. Aron, on his deathbed, makes a gift to the United Way. Will the certificate of deposit, the apartment building, the proceeds from the life insurance policy, and the gift to the United Way become part of Aron's estate and be distributed under the will? If not, how will these items be distributed and to whom?

Question 67

Flem owns shares of stock in Gas & Oil Inc. To create a trust with the stock for the benefit of his spouse Hana, Flem must convey the shares to

A)a grantor.
B)a settlor.
C)a trustee.
D)a court.

Question 68

A party can be given the authority to write checks, collect insurance proceeds, and otherwise manage the affairs of a person who is incapacitated through

A)a living will.
B)a durable power of attorney.
C)a health-care power of attorney.
D)a constructive trust.

Question 69

Rollo opens an account for $250,000 at Savers Bank. The account provides that the funds are held in trust for Thea, Rollo's daughter. This is

A)a constructive trust.
B)a living trust.
C)a resulting trust.
D)a testamentary trust.

Question 70

Selena decides to create a trust for the benefit of her children. She deeds her property to the entity that she creates but retains the power to amend, alter, or revoke the arrangement. She also continues to hold the property and receive the income that it earns. This is

A)not a trust.
B)a revocable living trust.
C)an irrevocable living trust.
D)a constructive trust.

Question 71

Idina executes a deed conveying ownership of her home to a trust for the benefit of her son Jem. The trust designates Idina as the trustee. When she dies, the house will pass without going through probate to

A)Jem.
B)Idina's estate.
C)the trust.
D)the state.

Question 72

Miki establishes a trust for the benefit of Nan, naming Obi as the trustee. The terms of the trust instrument do not expressly state the event on which Miki wishes it to terminate. The trust will end

A)when the trust's purpose is fulfilled, or becomes impossible or illegal.
B)any of the choices-whichever occurs first.
C)on the death of Nan.
D)on the death of Obi.

Question 73

The conduct of Edie and Floyd indicate an intention to create a trust. The circumstances raise an inference that Edie is holding legal title to property for Floyd's benefit. This is

A)not a trust.
B)a living trust.
C)a resulting trust.
D)a constructive trust.