1. B

Sam's gross estate will increase by $225,000 from these assets ($50K + $75K + $100K). The joint CD will now be owned 100% by his wife. The life insurance proceeds will go to his wife free of gift and federal income tax.

2.
A

Tenancy by the entirety and community property are property arrangements between spouses only.

3.
C

Community property is a property agreement between spouses and does not avoid probate. Assets purchased with community property funds are considered community property.

4. D

Tenants in common are free to transfer their respective shares of the property to other individuals.

5. C

Traditional IRA accounts pass by "contract" which means whoever is named as the beneficiary on the account will receive the assets. Beneficiary designations take precedence over trust and will declarations.

6.
A

Individual accounts and tenancy in common property ownership will both be probated at the death of the owner. TOD (transfer-on-death) and POD (payable-on-death) are both effective beneficiary assignment strategies used to avoid probate. Revocable trusts will also avoid probate, even though these assets are generally included in the gross estate of the grantor.

7.
A Death without a will is known as "intestate."

8. B

Some might consider creditor notification as another disadvantage; however, it is not. It sets a statute of limitations for creditors to come forward to file their claims. This prevents creditor issues in the future on the decedent's property.

9.
D

Annuity contracts and life insurance both pass by contract and avoid the probate process.



Introduction

Related Articles
  1. Retirement

    Tips to Reduce or Avoid Probate on Your Estate

    Avoid or reduce the delays and costs of probate for your estate with these tips.
  2. Personal Finance

    Do Retirement Accounts Go Through Probate?

    It's tough when retirement accounts have go through probate, tying up those funds after death. Here is how you can prevent that from happening.
  3. Retirement

    Do You Need a Living Trust? 7 Reasons Why Not

    In most cases there are easier, less expensive ways to avoid probate than a living trust.
  4. Retirement

    Which Estate Transfer Technique is Right for You?

    This article explains the difference between the two estate transfer methods -- a will and a trust, and the circumstances under which each can be used.
  5. Personal Finance

    State Laws Dictate Division Of Joint Property

    In breakup, divorce or death, community or common law will determine how property is divided.
  6. Investing

    The Benefits And Pitfalls Of Joint Tenancy

    This arrangement allows beneficiaries to access your account without having to go to court.
  7. Retirement

    Estate Planning for Beginners, Part Two

    If you die without a will, what happens to your assets? Here's how the state you live in can determine who will inherit your money and belongings.
  8. Investing

    Holding Titles On Real Property

    Find out how best to claim and convey ownership on your assets.
  9. Managing Wealth

    6 Ways To Lose Your Estate

    Find out why you shouldn't put off putting your affairs in order.
Frequently Asked Questions
  1. What is the difference between Communism and Socialism?

    Learn how some countries are incorporating socialist methods into capitalism.
  2. What's the difference between a stop and a limit order?

    A limit order is an order that sets the maximum or minimum at which you are willing to buy or sell a particular stock. With ...
  3. What is the formula for calculating earnings per share (EPS)?

    Learn why earnings per share (EPS) is often considered to be one of the most important variables in determining a stock’s ...
  4. What is the formula for calculating internal rate of return (IRR) in Excel?

    Understand how to calculate the internal rate of return (IRR) using Excel and how this metric is used to determine anticipated ...
Trading Center