CLU - CFP Topics 53 - 73 Estate Planning: Wills and Will Substitutes

Question 1

• A method of transferring assets by a decedent at death

- Uses the Probate court to pay debts, pay taxes and make bequests to beneficiaries

Answer 1

Will

Question 2

Transfer techniques at death that override the provisions of Wills

Answer 2

• JTROS & Tenants by Entirety
• Trusts
• TOD’s and POD’s
• Contracts
• Deeds

Question 3

Title:

• At death of first party, assets are automatically transferred to the surviving party(s)
• Typically referred to a “By operation of law”

Answer 3

JTROS - Tenants by Entirety

Question 4

Type of Trust:

- Subject to the terms of the trust and thus not subject to probate

Answer 4

Inter vivos trusts

Question 5

Type of Trust:

- Created by the will and thus are implemented by the probate process

Answer 5

Testamentary trust

Question 6

___ on death: a method of transferring securities to a named beneficiary at death

Answer 6

Transfers on death (TOD)

Question 7

___ on death: a method of transferring a bank account to a named beneficiary at death

Answer 7

Payment at Death (POD)

Question 8

Contracts have a very limited usage in estate planning as ___ ___.

Answer 8

will substitutes

Question 9

Contracts in estate planning are limited to:

Answer 9

• Life insurance contracts on the life of the decedent that are owned by the decedent
• Retirement and pension plans owned by the decedent
• Business contracts
• Prenuptial agreements

Question 10

• Can be a will substitute

- Requires an escrow which is many times an attorney

Answer 10

Deeds

Question 11

Will substitutes:

• Will substitutes ignore ___ ___ & ___ of the deceased
• Statute of ___ may run years after death
• Lack of ___ protection

Answer 11

• outstanding debts, taxes
• limitations
• legal