Question 1

a(n. _____ is a document that amends and updates a will.

Accepted Answer

A codicil is a legal document that amends and updates a will. It allows the testator (the person who made the will) to make changes or additions to the existing will without having to make an entirely new will.

Question 2

On termination of a revocable trust, the legal title to the trust assets returns to the settlor.

Accepted Answer

When a revocable trust is terminated, the legal title to the trust assets returns to the settlor because the settlor had retained the power to revoke the trust and regain ownership of the assets.

Question 3

A testamentary trust is usually irrevocable.

Accepted Answer

A testamentary trust is created through a will and only comes into effect upon the death of the testator, and it can be revoked or altered by the testator during their lifetime.

Question 4

A system of distribution in which all living descendants share equally, regardless of generation, is said to be a distribution per capita.

Accepted Answer

This is correct. In a distribution per capita, all living descendants receive an equal share of the inheritance regardless of which generation they belong to.

Question 5

Unlike a contract or a deed, a will can be changed as long as the person making the will lives.

Accepted Answer

A will is revocable and can be changed or updated during the testator's lifetime.

Question 6

Floyd died without making a will. He left a wife and two children, one of whom had predeceased him. Under a typical interstate succession law, Floyd's estate will be divided equally between his wife and the living child.

Accepted Answer

Under typical intestate succession laws, the wife would receive a larger portion of the estate, and the living child would receive the remainder. The share of the predeceased child might go to their descendants, if any.

Question 7

Estates and trusts are taxable entities under the federal income tax statutes.

Accepted Answer

Estates and trusts are considered separate entities for tax purposes and are subject to taxation on their income.

Question 8

The trustee is the person, institution for whose benefit the trust has been created.

Accepted Answer

A trustee is the person or institution that manages the trust, not the beneficiary for whom the trust is created.

Question 9

A will can be written in pencil or pen and on any kind of paper.

Accepted Answer

There is no requirement for a will to be written in a specific format or with a specific writing instrument. As long as the document accurately reflects the wishes of the testator and meets the requirements for valid execution under applicable law, it can be written on any kind of paper with any writing instrument. However, it is always advisable to use ink and high-quality paper to ensure the document's durability and legibility over time.

Question 10

Jacob's will stated that $100,000 each would be given to his wife, Melisa, and two children, Tim and Ben. But upon his death, it was found that his estate was worth only $240,750. Hence, the bequests to his wife and two children are said to have _____, and each would only get $80,250.

Accepted Answer

The term used to describe a reduction or decrease in a bequest because of insufficient assets in the estate is known as abatement. Therefore, the correct choice is B, abated. Choices A, C, D, and E do not accurately describe a reduction in a bequest due to insufficient assets in the estate.

Question 11

A specialized court that supervises the process by which a deceased's estate is managed is known as a(n) _____.

Accepted Answer

Probate court specifically deals with the management of a deceased's estate, making it the best choice for this question. Circuit court handles criminal and civil cases within a designated jurisdiction, ecclesiastical court is related to the church and religious matters, private court is not a commonly used term in the legal system, and appellate court reviews decisions made by lower courts.

Question 12

Frances left Jared her 46-inch LCD television in her will. However, when she died, she had just one 32-inch television. According to the rule of ademption, Jared will receive the 32-inch television.

Accepted Answer

The rule of ademption means that if the specific property that was bequeathed in a will is no longer in the possession of the testator at the time of their death, the gift fails and the beneficiary receives nothing. Therefore, since Frances did not have the 46-inch LCD television at the time of her death, the gift fails and Jared will not receive any television.

Question 13

Living wills are an exception to the rule that wills are effective only upon the death of the testator.

Accepted Answer

Living wills, also known as advance directives, specify the medical treatment and care that an individual wishes to receive or not receive in case they become incapacitated or unable to communicate their preferences. They become effective while the individual is still alive.

Question 14

If a person dies intestate, the property escheats to the state.

Accepted Answer

The answer of If a person dies intestate, the property...

Question 15

Aston, the owner of a large mansion in Chicago, died without a will. He did not have any collateral heirs, surviving kin or any known heirs. Hence, his property would _____ to the state.

Accepted Answer

When a person dies without a will and without any known heirs, their property will escheat, which means it will revert to the state. The state will then be responsible for distributing the property or assets as it sees fit. Choices A, B, C, and E are not relevant in this context.

Question 16

_____ of a gift in a will means that the intended legatee forfeits the object because it no longer exists.

Accepted Answer

Ademption is the term used to describe a situation where a gift in a will is no longer in existence at the testator's (person who made the will) death. This can occur if the testator sold or gave away the item before their death, or if the item was destroyed or lost. In such cases, the intended legatee (person who was meant to receive the gift) forfeits the object or item, and does not receive any substitute or replacement. Abatement refers to the reduction of gifts in a will in the event that the estate does not have sufficient assets to fulfill all of the bequests. Intestacy refers to a situation where a person dies without a valid will. Conversion refers to the unauthorized use or transfer of another person's property. Exemption refers to a deduction or tax benefit.

Question 17

A _____ will is one that is declared orally in front of witnesses.

Accepted Answer

A nuncupative will is one that is declared orally in front of witnesses.

Question 18

The inheritance tax rate depends on the relationship to the decedent; that is, the closer the relationship, the higher the tax rate.

Accepted Answer

The inheritance tax rate is generally lower for closer relatives and higher for more distant relatives or non-relatives.

Question 19

According to the Uniform Probate Code (UPC), a will can still be valid even if one of the two witnesses is a beneficiary under the will.

Accepted Answer

The UPC allows for a will to be considered valid even if one of the witnesses is a beneficiary, as long as the other witness is disinterested (not a beneficiary or an heir). This is known as the "interested witness rule." However, some states may have different requirements for witnesses to a will, so it is important to consult the laws of the specific state in question.

Question 20

According to the Uniform Principal and Income Act, any expenses incurred in making any permanent improvements to the property specified in the trust are chargeable to income.

Accepted Answer

The Uniform Principal and Income Act typically charges expenses for permanent improvements to the principal, not income.

Quiz 36: Estate Planning: Wills, Estates, and Trusts