5. Which of the following is/are characteristics of a "general power of appointment?"

I. Property is not included in the decedent's gross estate.
II. No conditions or restrictions.
III. Property may not be appointed to the decedent's creditors.
IV. Holder of the power can transfer property to themselves.

A) I and II only
B) I and III only
C) II and IV only
D) III and IV only

6. Ashley is the income beneficiary of a trust whereas she is entitled to the 5-and-5 powers. She died in 2013 without exercising her power for the year. The trust value was $750,000. What is included in Ashley's gross estate?

A) $0
B) $37,500
C) $87,500
D) $750,000

7. All of the following are acceptable reasons for trust funds to be paid for the benefit of the trust beneficiary under the "ascertainable standard" EXCEPT:

A) Payment to the University of Miami for college tuition of the beneficiary.
B) Payment of asthma medication.
C) Cost of a drug addiction program.
D) Payment of credit card debt used to buy an engagement ring.

8. Harold Harrington gave his son (Bruce) a general power of appointment over his trust assets. Which of the following are true statements regarding Bruce and his power?

I. Bruce can only appoint funds using an ascertainable standard.
II. Bruce can use the funds to buy a car for his father.
III. Bruce can use the funds to pay his father's creditors.
IV. If Bruce dies before his father, the assets would be included in the gross estate of his father.

A) I only
B) I and IV only
C) II and III only
D) II, III and IV only



Sample Questions 9 - 14

Related Articles
  1. Financial Advisor

    6 Proven Tips For Series 6 Success

    These techniques can help you pass this test without the added stress.
  2. Retirement

    How To Set Up A Trust Fund In The U.K.

    A guide to the whys and wherefores of setting up this most versatile of estate-planning instruments in the United Kingdom.
  3. Managing Wealth

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  4. Financial Advisor

    Passing an IRA to a Trust: The Good and Bad

    Creating a trust is a common estate planning tactic, but naming a beneficiary to an IRA to a trust may have unintended consequences.
  5. Personal Finance

    Tips for Taking the CFA Exam: Part 2

    Peter Mackey, head of exam development for the CFA Institute, shares his tips for passing the CFA level I, II and III exams.
  6. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  7. Personal Finance

    Buying a Home in Trust

    Buying a home in a real estate trust allows for tax advantages, possibly avoiding probate court, and future family conflict. Below we outline the two different types and what to arm yourself ...
  8. Retirement

    A Look at Protecting Children With an IRA Trust

    Too many people make huge and irreversible mistakes when naming the beneficiaries for their retirement accounts.
Frequently Asked Questions
  1. Where else can I save for retirement after I max out my Roth IRA?

    The first option to explore is to determine if you can contribute to a 401(k), 403(b), or 457 plan at work. If your employer ...
  2. How did George Soros "break the Bank of England"?

    In Britain, Black Wednesday (September 16, 1992) is known as the day that speculators broke the pound. They didn't actually ...
  3. What counts as "debts" and "income" when calculating my debt-to-income (DTI) ratio?

    It's important to know your debt-to-income ratio because it's the figure lenders use to measure your ability to repay the ...
  4. Who are Monsanto's main competitors?

    Learn about Monsanto Company's two main operating divisions and its main competitors within each sector, including The Mosaic ...
Trading Center