1. When a person dies without leaving a valid will, how is the distribution of
his or her property determined?
2. Under what circumstance does an estate have an executor?
3. When an estate does not have sufficient assets to satisfy all claims
against it, what claim has the highest priority?
4. What is the
process of abatement
?
5. A
demonstrative legacy
is a
6. In a will, a
devise
is a
7. What guidelines must be followed to classify a transaction as associated
with the principal of an estate or as an income transaction?
8. Executor’s fees and court costs for settling an estate usually
9. In an executor’s accounting for an estate, debts and other obligations are
recorded
10. A
testamentary trust
is a trust
11. Which of the following is usually accounted for as an adjustment to a
trust’s principal?
12. Which of the following is usually
not
accounted for as an adjustment to a
trust’s income?
13. The
trustor
is the
14. The terms of a will currently undergoing probate are: “A gift to my brother
David of $25,000 cash; to my son James, $50,000 from my savings account; and
to my Daughter Lila, all of my remaining property.” At the time of death, the
balance in the savings account was $40,000, and there was additional cash (after
payment of funeral expenses and all claims against the estate) of $70,000.
The gift to David is a
15. The terms of a will currently undergoing probate are: “A gift to my brother
David of $25,000 cash; to my son James, $50,000 from my savings account; and
to my Daughter Lila, all of my remaining property.” At the time of death, the
balance in the savings account was $40,000, and there was additional cash (after
payment of funeral expenses and all claims against the estate) of $70,000.
The gift to James is a
16. The terms of a will currently undergoing probate are: “A gift to my brother
David of $25,000 cash; to my son James, $50,000 from my savings account; and
to my Daughter Lila, all of my remaining property.” At the time of death, the
balance in the savings account was $40,000, and there was additional cash (after
payment of funeral expenses and all claims against the estate) of $70,000.
How much would James have received from the estate?
17. The terms of a will currently undergoing probate are: “A gift to my brother
David of $25,000 cash; to my son James, $50,000 from my savings account; and
to my Daughter Lila, all of my remaining property.” At the time of death, the
balance in the savings account was $40,000, and there was additional cash (after
payment of funeral expenses and all claims against the estate) of $70,000.
How much would Lila have received from the estate?
18. The provisions of a will currently undergoing probate are: “Two thousand
shares of Dorn stock to my son; $30,000 in cash from my savings account to my
brother; $50,000 in cash to my daughter; and any remaining property divided
equally between my son and daughter.”
Assume that, at the time of death, the estate included 1,200 shares of Dorn
stock, $60,000 cash in the savings account, and $70,000 in cash from other
sources. What would the son have received from the settlement of the estate?
19. The provisions of a will currently undergoing probate are: “Two thousand
shares of Dorn stock to my son; $30,000 in cash from my savings account to my
brother; $50,000 in cash to my daughter; and any remaining property divided
equally between my son and daughter.”
Assume that the estate included 1,200 shares of Dorn stock, $22,000 cash in the
savings account, and $70,000 in cash from other sources. What would the
daughter have received from the settlement of the estate?
20. Which of the following is
not
subtracted to arrive at the taxable value of an
estate?
21. Assume that Bob Smith dies on May 25, 2011. Mr. Smith’s assets include
the following: ABC Stock costing $30,000 but valued at $40,000; a house costing
$280,000 but valued at $620,000; life insurance in the amount of $600,000; and
cash from various sources totaling $50,700. Three credit cards in Mr. Smith’s
name had balances totaling $8,530 on the date of death. The estate paid funeral
and final medical expenses in the amount of $50,492. There were no charitable
gifts designated by the will, and Mr. Smith was single at the time of his death.
What is the amount of the taxable estate?
22. What is the amount of the personal exemption on an estate income tax
return?
23. Which of the following is normally viewed as an adjustment to the
principal of an estate?
24. Which of the following is
not
normally viewed as an adjustment to the
principal of an estate?
25. What are the goals of probate laws?
(1) gather and preserve all of the decedent’s property;
(2) carry out an orderly and fair settlement of all debts;
(3) discover and follow the decedent’s intent for the remaining property
26. After expenses of administering an estate, which claims would be next in a
typical order of priority to establish which creditors will get paid?
(1) funeral expenses
(2) medical expenses of the last illness
(3) debts and taxes given preference under laws
(4) all other claims.
27. A gift that is specified in a will as “I leave my collection of baseball cards
to my son” is a
28. A gift that is specified in a will as “I leave $5,000 in cash from my checking
account to my daughter” is a
29. A gift that is specified in a will as “I leave $5,000 in cash to my son” is a
30. A gift of any remaining estate property is a
31. The provisions of a will currently undergoing probate are: “One thousand
shares of Wal-Mart stock to my son; $10,000 in cash from my savings account to
my brother; $5,000 in cash to my daughter; and any remaining property divided
equally between my son and daughter.” At the time of death, the estate included
1,400 shares of Wal-Mart stock and $25,000 cash in the savings account.
What would the son have received from the settlement of the estate?
32. The provisions of a will currently undergoing probate are: “One thousand
shares of Wal-Mart stock to my son; $10,000 in cash from my savings account to
my brother; $5,000 in cash to my daughter; and any remaining property divided
equally between my son and daughter.” At the time of death, the estate included
1,400 shares of Wal-Mart stock and $25,000 cash in the savings account.
What is the remaining principal to be divided equally between the son and the
daughter?