Business Law, 8e (Cheeseman)
Chapter 52 Wills, Trusts, and Estates
1) A will can be created to come into effect during one’s lifetime.
2) Trusts are used to transfer property that is to be held and managed for the benefit of another
person or persons.
3) A living will states a person’s wishes regarding estate planning.
4) A health care directive names an individual or individuals who can make health care decisions
if the maker of the directive is unable to do so.
5) A will is a testamentary deposition of property.
6) The Statute of Wills permits all orally made wills to be legally binding.
7) Nicknames or titles cannot be used as a testator’s signature in a will.
8) A will has to be composed on legal paper to be considered valid.
9) A beneficiary under the will cannot be the witness of that will.
10) A will cannot be amended by merely striking out existing provisions and adding new ones.
11) A codicil is considered to be a separate instrument from the will it references.
12) A properly executed subsequent will revokes a prior will.
13) If two or more testators execute the same instrument as their will, the document is called a
reciprocal will.
14) A mutual will cannot be unilaterally revoked after one of the parties has died.
15) Nuncupative wills are legal oral wills that are made at a testator’s deathbed in the absence of
witnesses.
16) According to the Uniform Simultaneous Death Act, the deceased’s property goes to the
government in case of simultaneous deaths.
17) A probate can only be conducted by a lineal descendant of the testator.
18) A gift of $100,000 to a named beneficiary is an example of a general gift.
19) A person who inherits property under a will or an intestacy statute takes the property subject
to all the outstanding claims against it.
20) Pursuant to per capita distribution, all the lineal descendants equally share the property of the
estate.
21) According to the doctrine of ademption, the lineal descendants inherit by representation of
their parent.
22) In case of abatement, if a will provides for both general and residuary gifts, the residuary
gifts are abated first.
23) Relatives who receive property under intestacy statutes are called beneficiaries.
24) If the deceased has no surviving relatives, then the deceased’s property escheats to the state.
25) In a trust arrangement, the trustee has legal title to the trust corpus, and the beneficiary has
equitable title.
26) All trusts are deemed irrevocable on creation.
27) The person or entity to receive the trust corpus upon the termination of the trust is called the
remainder beneficiary.
28) In an inter vivos trust, the settlor transfers legal title of property to a named trustee to hold,
administer, and manage for the benefit of named beneficiaries while he or she is alive.
29) A testamentary trust comes into existence while the settlor is still alive.
30) In a spendthrift trust, all control over the trust is removed from the beneficiary.
31) A Totten trust is considered a tentative trust because the trustee can add or withdraw funds
from the account.
32) The primary purpose of using a living trust is to avoid probate associated with using a will.
33) A living trust does not allow creditors to obtain a lien against the property in the trust.
34) A living trust is subject to property division upon divorce.
35) In an allegation of undue influence in making a will, the courts only consider direct evidence
as proof.
36) A living trust is a document that states which life-saving measures the signor does and does
not want.
37) Euthanasia pursuant to a living will is considered legal.
38) A(n) ________ is a declaration of how a person wants his or her property to be distributed
upon death.
A) will
B) tort
C) audit
D) writ
39) Who is a beneficiary of a will?
A) a person assigned in a will to create a trust
B) a person allowed to transfer the testator’s legal title property to another person
C) a person designated in the will to receive the testator’s property
D) a person nominated in a living will to make all health care decisions in accordance with the
testator’s wishes
40) Which of the following statements is true of the requirements of making a will?
A) A will need not be signed by the testator if it was created in the presence of witnesses.
B) A will need not be written to be considered valid only if it is a dying declaration.
C) A will cannot incorporate any other documents by reference.
D) The legal age for executing a will is set at 25 years across all states.
41) Which of the following statements is true of a testator’s signature on a will?
A) The testator’s signature must be obtained in the presence of the sole beneficiary as the
principal witness.
B) The will need not be signed by the testator if it was already attested by witnesses.
C) The use of nicknames and honorary titles to sign a will render it unenforceable and invalid.
D) The testator’s signature must appear at the end of the will to prevent chances of any fraud.
42) The action of a will being witnessed by two or three objective and competent people is
known as ________.
A) attestation
B) abatement
C) escheating
D) ademption
43) What is the attestation clause for wills?
A) the condition that the witness must reside in the jurisdiction in which the testator is domiciled
B) the stipulation that only the testator’s attorney can be a witness to the will
C) the requirement of signatures of witnesses on a will after that of the testator’s
D) the requirement of the beneficiary’s presence when making the will
44) What is a codicil?
A) a type of will that cannot be amended once created
B) a separate document that must be executed to amend a will
C) a will that has been attested by the beneficiary of the will
D) a duplicate of a will that is used in case the original is destroyed
45) A codicil must be ________.
A) executed before the will has been created
B) read as a separate instrument from the will
C) inclusive of a reference to the will it is amending
D) amended in the presence of the same witnesses who signed the will
46) A will that is executed by two or more testators is known as a ________.
A) joint will
B) mutual will
C) reciprocal will
D) nuncupative will
47) A ________ is a will in which two or more testators execute separate wills that leave their
property to each other on the condition that the survivor leave the remaining property on his or
her death as agreed by the testators.
A) nuncupative will
B) mutual will
C) joint will
D) living will
48) Which of the following statements is true of reciprocal wills?
A) They can be held invalid as to one testator but not the other.
B) They are to be executed as one will with mutual terms.
C) Any will that is executed by two or more testators is a reciprocal will.
D) They cannot be unilaterally revoked after one of the parties has died.
49) What is a holographic will?
A) a will that is revoked on behalf of a testator by a legal attorney
B) a will that requires the beneficiary to be the witness of the will
C) a will that is entirely handwritten and signed by the testator
D) a will that is orally declared at a testator’s deathbed
50) An oral will that is made before a witness during the testator’s last illness is defined as a
________.
A) holographic will
B) nuncupative will
C) living will
D) joint will
51) Which of the following wills is an exception to the writing rule of the Statute of Wills?
A) a reciprocal will
B) a holographic will
C) a nuncupative will
D) a codicil
52) Bob and Clara were married for 22 years when they died in a car accident, without leaving
behind a will. They had no surviving children but they were close to many of their living
relatives. According to the Uniform Simultaneous Death Act, how would the couple’s properties
be distributed following their death?
A) It would be made into a charitable fund by a court-appointed trustee.
B) It would escheat to the government.
C) It would be distributed to their respective relatives.
D) It would be sold by the government and its proceedings would then go to their relatives.
53) The process of a deceased’s property being collected, debts and taxes being paid, and the
remainder of the estate being distributed is known as a(n) ________.
A) probate
B) abatement
C) ademption
D) audit
54) A ________ is a specialized state court that supervises the administration and settlement of
estates.
A) small claims court
B) federal court
C) tort court
D) probate court
55) Who is an executor of a probate?
A) a person appointed by the government to conduct the probate
B) a person designated in the will to conduct the probate
C) a person who is beneficiary of the probate
D) an attorney who is usually appointed to help administer the estate and to complete the probate
56) The ________ is an act in the United States that provides that if people who would inherit
property from each other die such that it cannot be determined who died first, each person’s
property is distributed as though he or she had survived.
A) Succession Act of 1995
B) Family Law Act of 1986
C) Uniform Determination of Death Act
D) Uniform Simultaneous Death Act
57) What is the first step in videotaping the signing of a will?
A) The will is recited verbatim by the testator.
B) The will is attested by the witnesses after inspection.
C) The will is signed by the testator.
D) The will and its provisions are explained and justified by the testator for the benefit of
surviving relatives.
58) A gift of real estate by will is called a(n) ________.
A) bequest
B) devise
C) abatement
D) general gift
59) A gift of $30,000 to a named beneficiary is an example of a ________ gift.
A) special
B) general
C) legacy
D) residuary
60) Which of the following statements is true of real property inherited under a will?
A) The person is not allowed to renounce the will after the death of the testator.
B) The person can only renounce the will before a probate is conducted.
C) The person is not allowed to renounce the will if all outstanding claims against it are not
fulfilled by him or her.
D) All outstanding claims against the property like liens and mortgages are inherited by the
beneficiary.
61) Which of the following beneficiaries is considered a lineal descendant of the testator?
A) a parent
B) a child
C) a spouse
D) a sibling
62) A distribution of an estate in which grandchildren and great-grandchildren of the deceased
inherit by representation of their parent is known as a(n) ________.
A) abatement
B) per stirpes distribution
C) per capita distribution
D) ademption
63) A(n) ________ is a distribution of an estate in which each grandchild and greatgrandchild of
the deceased inherits equally with the children of the deceased.
A) abatement
B) per stirpes distribution
C) per capita distribution
D) ademption
64) ________ is a principle that says if a testator leaves a specific devise of property to a
beneficiary, but the property is no longer in the estate when the testator dies, the beneficiary
receives nothing.
A) Ademption
B) Abatement
C) Bailment
D) Attestation
65) The ________ doctrine says that if the property a testator leaves is insufficient to satisfy all
the beneficiaries named in a will and there are both general and residuary bequests, the residuary
bequest is paid last.
A) ademption
B) inter vivos
C) abatement
D) probatement
66) Reductions under the doctrine of abatement are proportionate for all beneficiaries ________.
A) when there are residuary gifts and special gifts
B) when there are residuary and general gifts
C) when there are only general gifts
D) when there are only residuary gifts
67) The state of having died without leaving a will is known as ________.
A) ademption
B) intestate
C) abatement
D) escheatment
68) The receiver of property under intestacy statutes is known as a(n) ________.
A) assignee
B) trustee
C) beneficiary
D) heir
69) When is the deceased’s property, in intestacy, necessarily escheated to the government?
A) when the deceased has no living relatives
B) when the deceased left behind property that has an existing mortgage on it
C) when the deceased has executed a living will prior to illness or death
D) when the deceased has no lineal descendants
70) A(n) ________ is a legal arrangement established when one person transfers title to property
to another person to be held and used for the benefit of a third person.
A) will
B) trust
C) escheatment
D) abatement
71) What is a trust corpus?
A) property and asset that are claimed in case of intestacy
B) property and assets that the trustee has an equitable right to
C) property and assets escheated to the government in the absence of a trustee
D) properties and assets held in trust to be used for the benefit of a third person
72) Who receives the trust res upon the termination of a trust?
A) the heir
B) the trustor
C) the remainder beneficiary
D) the income beneficiary
73) Mr. Rolleck places his estate in a trust while he is alive and he names a local bank as the
trustee to administer the trust and invest its assets. The trust designates his wife as the income
beneficiary of his estate and stipulates that after his wife’s death, their children James and Joyce
will receive the trust. James and Joyce are ________ in this scenario.
A) collateral heirs
B) income beneficiaries
C) remainder beneficiaries
D) settlors
74) Mr. Rolleck writes a will placing his estate in a trust upon his death. He names a local bank
as trustee to administer the trust and invest its assets. The trust provides that when his grandson
reaches the age of 23, the trust will terminate and he will be given legal title to the assets. Mr.
Rolleck dies when the grandson is 12 years old. At the age of 23, the grandson inherits the title to
the assets. What kind of trust did Mr. Rolleck create in this scenario?
A) an inter vivos trust
B) a testamentary trust
C) a constructive trust
D) a resulting trust
75) An equitable trust that is implied by law to avoid fraud, unjust enrichment, and injustice is
defined as a ________.
A) constructive trust
B) testamentary trust
C) spendthrift trust
D) Totten trust
76) Helga wants to buy a painting that is to be sold at an auction next week, but she has an
unforeseen engagement which requires her to go out of town on the day of the auction. She asks
her sister Karina to attend the auction and bid for the painting. If the sale is successful, Karina is
to claim legal title to the painting till Helga returns. What kind of a trust is created between
Helga and Karina?
A) a charitable trust
B) a testamentary trust
C) a totten trust
D) a resulting trust
77) From which of the following parties can a creditor recover in a spendthrift trust?
A) reminder beneficiary
B) income beneficiary
C) trustee
D) successor trustee
78) A ________ is created when a person deposits money in a bank account in his or her own
name and holds it as a trustee for the benefit of another person.
A) resulting trust
B) Totten trust
C) spendthrift trust
D) testamentary trust
79) Which of the following is a similarity between a living trust and an inter vivos trust?
A) both of them are subject to a probate
B) both require the beneficiaries to be present during the time of creation of the trust
C) both of them are created while the settlor is still alive
D) both of them are free from changes resulting from operations of law like annulment
80) Which of the following is a benefit of a living trust?
A) It helps reduce estate taxes more than a will does.
B) It helps avoid probate on the property.
C) It is not subject to property division upon divorce.
D) It does not allow creditors to obtain liens against the property.
81) Which of the following is true of a living trust?
A) It comes in to effect after the death of the grantor.
B) It helps reduce the income tax for the grantor.
C) It can be revoked during the grantor’s lifetime.
D) It is considered a public record subject to probate.
82) Horace Holmes died at the age of 85 leaving behind all his property to Joe Baines, his butler.
The news of the new will that Horace executed three months before his death naming Joe as the
sole beneficiary surprised everyone. By his prior will, he had bequeathed his estate to his two
daughters and three grandchildren on a per capita basis. The court took up proceedings to
determine the validity of his new will because Horace’s rejection of his daughters and
grandchildren in his will was uncharacteristic of him. The court most likely suspected this
change to be a case of ________.
A) constructive trust
B) undue hardship
C) undue influence
D) spendthrift trust
83) A ________ is a document that states which life-saving measures the signor does and does
not want along with specifying that he or she wants such treatments withdrawn if doctors
determine that there is no hope of a meaningful recovery.
A) living will
B) health care directive
C) health care proxy
D) living trust
84) Which of the following does a health care directive outline?
A) which life-saving measures the signor does and does not want
B) what treatments are to be withdrawn if doctors determine there is no hope of a meaningful
recovery
C) why the signor has decided to withdraw life-support systems
D) who is to make all health care decisions in accordance with the living will on behalf of the
signor
85) What are the requirements of the Statute of Wills?
86) What is intestate succession?
87) Who are the beneficiaries of a trust?
88) Give an account of the funding and operation of a living trust.
89) What are the different elements a court considers to determine undue influence in making a
will?
90) What is a person’s right to die? What are the views regarding the legality of euthanasia in the
United States?