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. Managing Wealth

    Skipping-Out on Probate Costs

    Don't let bad estate planning lead to unnecessary costs and stress for your inheritors.
  2. Retirement

    3 Secrets You Didn't Know About Estate Planning

    Three estate planning secrets every advisor and saver needs to know.
  3. 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.
  4. Retirement

    A Revocable Living Trust Makes an Executor’s Job Easier

    Establish a revocable living trust to give you peace of mind and avoid probate. The executor of your will’s job will be easier, too.
  5. Investing

    The Benefits And Pitfalls Of Joint Tenancy

    This arrangement allows beneficiaries to access your account without having to go to court.
  6. Personal Finance

    State Laws Dictate Division Of Joint Property

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

    Holding Titles On Real Property

    Find out how best to claim and convey ownership on your assets.
Frequently Asked Questions
  1. I want to invest my emergency fund to earn interest. What is a relatively safe and liquid investment I can easily withdraw from if disaster struck?

    Be sure you put your emergency money where you'll be able to access it quickly, easily and without penalty.
  2. What are the Differences Between Affiliate, Associate and Subsidiary Companies?

    The terms affiliate and associate are used synonymously to describe a company whose parent only possesses a minority stake ...
  3. What is arbitrage?

    Arbitrage is basically buying a security in one market and simultaneously selling it in another market at a higher price, ...
  4. What is the difference between upstream and downstream oil and gas operations?

    The closer to the end user a function or firm is, the further downstream it is said to be. Raw material extraction or production ...
Trading Center