True False (part 3)

Question 1

The marital tax exemption only applies to one surviving spouse. For example, if husband and wife die at the same time, only husband can use the marital exemption.

Answer 1

False

Question 2

The Federal Estate Tax is set at 4 million dollars and the Illinois Estate Tax is set at 5.45 million dollars.

Answer 2

False

Question 3

Another name for an inter vivos trust is a dynasty trust.

Answer 3

False

Question 4

The Estate Tax is a flat 50%.

Answer 4

False

Question 5

If husband dies and left his ex-wife as beneficiary on his life insurance policy but leaves the life insurance policy to his son on a post-dated will, the son automatically gets the life insurance proceeds because the will post-dates the life insurance policy.

Answer 5

False

Question 6

If your estate is under $100,000, a small estates affidavit can be used.

Answer 6

True

Question 7

If a person does not leave a will, the laws of intestacy specific to the state apply.

Answer 7

True

Question 8

Banks carry trust departments that can be named as executors and administer estates.

Answer 8

True

Question 9

For client’s with large estates, advising them to make lifetime gifts is a way to lessen their estate tax.

Answer 9

True

Question 10

If a will is improperly executed, the property of the decedent will be subject to the intestacy statute and possibly probate.

Answer 10

True

Question 11

The IRS must rely on the Attorney General in order to remove a trustee from a trust.

Answer 11

False

Question 12

Distillation of a trust is the act of taking the funds out of one trust, and putting it into a different trust, as long as the trustee satisfies the needs of the trust.

Answer 12

False

Question 13

In a non-general power of appointment, the done can only appoint according to the parameters of the trust.

Answer 13

True

Question 14

Ademption is a common law doctrine used in the law of wills to determine what happens when property bequeathed under a will is no longer in the testator’s estate at the time of the testator’s death.

Answer 14

True

Question 15

If a will is executed while property is outside the state, it gets probated outside the state of domicile. In order to avoid this for real estate, you may place the property in an “intervivos trust.

Answer 15

True

Question 16

There are four elements to Intentional Interference of a Will. They are (1) existence of an expectancy. (2) intentional interference with the expectancy through tortious conduct (3) causation and (4) damages.

Answer 16

True

Question 17

A grantor of a trust cannot also be the trustee of the trust.

Answer 17

False

Question 18

“Term life insurance” builds up in value and “Whole Life Insurance” does not.

Answer 18

False

Question 19

“Domicile” in Probate Court is defined as where the Grantor pays his or her taxes.

Answer 19

False

Question 20

One advantage to probate is that if decedent has debts or potential liability, statute of limitations of creditors is one year.

Answer 20

False

Question 21

There is no way to avoid probate for land that is located in a different state than where the testator is domiciled.

Answer 21

False

Question 22

A post humonus child will not be eligible to inherit from his deceased parent under the law of intestacy.

Answer 22

False

Question 23

Children are not entitled to inherit from their parents and therefore, a parent may “disinherit” their child.

Answer 23

True

Question 24

Husband married and then named his wife as the beneficiary of his life insurance policy. The policy stated that the husband may change the beneficiary of the life insurance policy by writing to the insurance company, and including the beneficiary, the new beneficiary, and the policy number. Husband and wife get divorced and husband remarries. Husband bequeathed the payment of his life insurance policy to his wife, not his ex-wife. When husband dies, his ex-wife will still receive the payment of the life insurance policy.

Answer 24

True

Question 25

A man makes a will and dies. He is now said to die intestate.

Answer 25

False

Question 26

Donald bequeathed to Hilary $1 million in his will. One night, Donald and Hilary were seen leaving a 7-eleven, highly intoxicated, and going to Donald’s hotel room. Donald was found dead the next morning and Hilary was charged with his murder. Hilary was ultimately not convicted. Hilary will still inherit the $1 million from Donald because she was not convicted of the murder.

Answer 26

False

Question 27

The executor carries out the decedents wishes in a will, and the trustee carries out the decedents wishes in a trust.

Answer 27

True

Question 28

The mere threat to engage in a wrongful act is not considered duress.

Answer 28

False

Question 29

A trust is worth $3 million. It contains $1 million in Google stock, $1 million in Facebook stock, and $1 million in Twitter stock. Each stock’s value is increasing. However, the trustee still has a duty to diversify, in order to comply with the Prudent Investor Rule.

Answer 29

True

Question 30

A court may not modify or terminate a trust if such actions will not further the purpose of the trust.

Answer 30

True

Question 31

In Illinois, if two or more beneficiaries die within 120 hours of one another, and no will or other document provides for this situation explicitly, each is considered to have predeceased the other(s).

Answer 31

False

Question 32

In Illinois, you may create a trust for the care of a pet.

Answer 32

True

Question 33

In Illinois, a child conceived through in vitro fertilization will inherit under her father’s will even if she is born two years after his death.

Answer 33

False

Question 34

Illinois recognizes holographic wills.

Answer 34

False

Question 35

In Illinois, a spouse may not recover under his wife’s will if he wrongfully causes her death, even if he is not convicted for her death.

Answer 35

True

Question 36

In Illinois, to be eligible for a small estate affidavit, a decedent’s estate may exceed $200,000.

Answer 36

False

Question 37

Pension plans and real estate are generally a testator’s largest assets.

Answer 37

True

Question 38

A prenuptial agreement is always binding because no consideration is required.

Answer 38

False

Question 39

A beneficiary of a charitable trust generally has standing to sue if the trustees are not acting in accordance with the terms of the trust.

Answer 39

False

Question 40

Two witnesses must be present to revoke a will.

Answer 40

False

Question 41

Testator devises his home “to A for life, then to B.” A has a life estate. B has a reversion.

Answer 41

False, B cannot have a reversion because B is a transferee. B has a vested remainder

Question 42

Generally speaking, the law of the state where the decedent was domiciled at death governs the disposition of personal property and the law of the state where the decedent’s real property is located governs the disposition of real property

Answer 42

True

Question 43

Under the IL Uniform Simultaneous Death Act Sec. 5/3-1 when the title to property or its devolution depends upon priority of death and if the decedents died within 30 days of each other, their assets will be split as if they had both survived.

Answer 43

False. There is not 30 day rule. Under the statute there needs to be no sufficient evidence that the persons have died otherwise than simultaneously.

Question 44

An adopted child can always inherit from adopted parents and the adopted parents’ family members

Answer 44

False there is an exception to this rule: if adopted child after 18 years old AND never lived with adopting parents before turning 18 they CANNOT inherit from lineal or collateral kindred of adopting parent (can still inherit from adopting parent)

Question 45

In Illinois, a posthumous child born 10 months after its father’s death shall receive the same share of an estate as if the child had been born in the decedent’s lifetime;

Answer 45

False, the child needs to be in utero at the time of the father’s death, meaning the child needs to be born within 9 months.

Question 46

Every person who is of sound mind and memory has power to bequeath by will the real and personal estate which he has at the time of his death.

Answer 46

False, the person needs to have attained the age of 18

Question 47

As a general rule, the settlor of a charitable trust is the only person/entity that may enforce the trust terms.

Answer 47

False, the Attorney General has standing to enforce the charitable trust’s terms.

Question 48

A trustee does not have to diversify trust investments if the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.

Answer 48

True

Question 49

The primary benefit of a spendthrift trust is that a beneficiary of a spendthrift trust can voluntarily alienate/transfer her interest, but her creditors can her creditors reach her interest.

Answer 49

False, the beneficiary of a spendthrift trust may not alienate/transfer their interest voluntarily.

Question 50

If a settlor’s charitable purpose becomes illegal, impossible, or impracticable, the court may direct the application of the trust property to another charitable purpose that approximates the settlor’s intention

Answer 50

True: cy pres

Question 51

If the decedent dies testate and in her will names the person who is to carry out the terms of the will and administer the probate estate, such person is called the administrator.

Answer 51

False. If the decedent names a person in the will to carry out the terms of the estate, they are called the executor. An administrator is named by the court to be a personal representative of the estate if a person dies intestate or does not name an executor.

Question 52

If Testator leaves his property to his daughter per stirpes and the daughter predeceases the testator, then the property will pass to the daughter’s husband.

Answer 52

False. Per stirpes means through the root or bloodline. That means the daughter’s property would pass to her children, but not her husband.

Question 53

Testator leaves his property to his descendants in his will. He leaves behind two adopted children. His children will take under the will.

Answer 53

True. An adopted child is treated as a natural child of his adopted parents and is entitled to take under the will or trust of the adoptive parent.

Question 54

In IL, the deceased wrote out her will and signed it. There were no witnesses. This is a valid will and should be probated after her death.

Answer 54

False. Holographic wills are not valid in the state of Illinois.

Question 55

Testator leaves his property to wife in his will. Five years later, they divorce. The ex-wife will no longer take under the will.

Answer 55

True. Divorce revokes any provision in a decedent’s will for the decedent’s divorced spouse.

Question 56

Testator began having insane delusions about Donald Trump and the 2016 election. In her will, she left everything to her daughter. After she died, her son challenged the will and alleged that his Mom lacked capacity due to her insane delusions. The court will hold that testator lacked capacity and the will should not stand.

Answer 56

False. To prevail under an insane illusion, the contestant must show that both the testator labored under an insane delusion and that the will or some part thereof was a product of the insane delusion. If the insane delusion does not affect the dispositions, then the will stands.

Question 57

Testator leaves ½ of her estate to her daughter. Her daughter pre-deceases her. The state has an anti-lapse statute. Her share will do to her daughter.

Answer 57

True. Anti-lapse statutes substitute another beneficiary for the predeceased devisee. If the legatee is a descendant of the testator, and predeceases the testator, the legacy will go to the legatee’s descendants per stirpes.

Question 58

Testator leaves 100 shares of stock to friend. After a stock split, there are now 200 shares. Friend is entitled to the 200 shares of stock.

Answer 58

True. A stock split is a change in form, not substance. A devisee is entitled to additional shares received by the testator as a result of a stock split.

Question 59

Grantor gives X $100,000 to hold in trust. This is a trust.

Answer 59

False. The creation of a trust requires intent by the settlor to create a trust, ascertainable beneficiaries who can enforce the trust, and specific property to be hold in the trust. In this example, there were no ascertainable beneficiaries.

Question 60

A married couple owns a house in joint tenancy. After the death of the wife, the house must be probated for wife to have full ownership.

Answer 60

False. Upon the death of one tenant, the surviving tenant owns the property absolutely. The decedent’s interest vanishes at death. This is a will substitute.

Question 61

Bob finds out his wife cheated on him during the last fifteen years of their marriage. To get back at her for this betrayal Bob writes her out of his will stating “and to my backstabbing and deceitful strumpet of a wife I leave her with her lover and none of my estate.” Assuming Bob’s wife renounced the declaration in the will. Bob’s disinheriting of his wife is valid under Illinois law and justified given her conduct therefore, she gets nothing.

Answer 61

False, Under 755 ILCS 5/2-8 when a spouse renounces a will which disinherits them, they are entitled to either 1/3 or ½ of the entire estate.

Question 62

Jesse when she began working at XYZ law firm was provided a life insurance policy under which she named her spouse as the beneficiary. Three years later, Jesse divorced her spouse and began a relationship with her assistant. Jesse never notified the insurance of the divorce. In her will Jesse left her entire estate and the benefit of the life insurance policy to her assistant. Upon, Jesse’s death her assistant will inherit under the life insurance policy.

Answer 62

False, the contract with the insurance company will be upheld unless there is clear and convincing evidence that Jesse tried to make her assistant the beneficiary under the life insurance policy. In the absence of such evidence, Jesse’s former spouse will benefit from the policy.

Question 63

The legal definition of decanting for estate planning purposes, is used to describe a lawyer filtering out the wishes of their client to determine what should actually be incorporated in a will.

Answer 63

False, decanting is the pouring over of one trust into a new trust because the needs of the beneficiary have changed.

Question 64

Rae is a 25 year old woman living in downtown Chicago. Thinking she was young and had her whole life ahead of her, she did not plan for her untimely death. As such she did not have a medial power of attorney, nor a will. When she was killed by an escaped lion from the Lincoln Park Zoo her vast estate, that she gained from developing a popular dating app, was submitted for probate. She is survived by a brother, three cousins, both parents, and her maternal grandparents. Under Illinois law, her estate will be divided between her brother and her parents.

Answer 64

False, under IL intestacy law if there is no surviving spouse, or decedents, and the parents are alive they will inherit the estate.

Question 65

A special needs trust is a specific type of trust that does not just provide income but instead pays for the care and maintenance of the beneficiary as the trustee sees fit or per the terms of the trust.

Answer 65

True

Question 66

The term “power of attorney” refers to the right of an estate planning attorney to prepare a will or trust.

Answer 66

False, A power of attorney is a legal document that creates an agency relationship in which the agent, called attorney in fact, is given a written authorization to act on behalf of the principal agency relationship in which the agent, called attorney in fact, is given a written authorization to act on behalf of the principal

Question 67

Jackson during his lifetime was a financial wizard in the stock market. To preserve assets for his children he set up a trust listing them as beneficiaries who were entitled to the income, divided equally, once the youngest reached the age of 21. Jackson named his brother, Cam, as the successor trustee. Cam did not have his brother’s investment prowess. After Jackson died Cam invested all of the principal of the trust in a solar energy company his friend ran. The friend ensured Cam it as a sound investment because solar energy was “the way of the future.” Ultimately, the stock plummeted, Jackson’s children then filed a breach of fiduciary duty action against Cam. Jackson’s children will most likely prevail in their suit.

Answer 67

True, a trustee has a fiduciary duty owed to the beneficiaries of a trust to diversify the assets.

Question 68

A lawyer should always attempt to be named as the trustee of a trust he is drafting for a client so that he can also collect trustee fees. This is a lucrative move on the attorney’s part because his legal malpractice insurance will cover the cost of any fiduciary breach as trustee.

Answer 68

False, legal malpractice insurance only covers damages that stem from legal malpractice claims, by acting as a trustee the lawyer is not acting as an attorney.

Question 69

lawyer is not acting as an attorney.
George created an inter vivos trust naming Bank of America and himself as co-trustees. Under the terms of the trust when George passed his wife, Angie, was entitled to the income for her life and the remainder passed equally to the three children they shared, Huey, Dewey, and Louie. Angie had a child from a previous marriage, Daisy, who was not a beneficiary of the trust. After George’s funeral Angie asked for a copy of the trust agreement from Bank of America. The bank refused to supply her with the agreement because prior to his death George told a manager at the bank he did not want his wife to know Daisy was not a beneficiary. The banks refusal to provide Angie with a copy of the trust was valid.

Answer 69

False, a beneficiary of a trust is entitled to request a copy of the trust and an accounting.

Question 70

One benefit of a discretionary trust is that it preserves stability for the beneficiaries, guaranteeing a fixed income.

Answer 70

False, discretionary trust is meant to preserve flexibility. Allowing a trustee to pay out the income according to who of the beneficiaries needs the benefit the most.

Question 71

If a joint tenant dies without a will, the property passes through intestacy.

Answer 71

False, the property passes to the surviving joint tenant.

Question 72

Under illinois intestacy law, if there is a surviving spouse and no descendant of the decedent then ½ of the estate goes to the spouse and ½ to the decedent’s parents.

Answer 72

False, entire estate to surviving spouse.

Question 73

If a gift is made during the lifetime of the decedent to an heir, the value of that gift is subtracted from the heir’s share in the estate.

Answer 73

False, the rule only applied under common law.

Question 74

There is no intelligence requirement for creating a will.

Answer 74

True, but the decedent must be of sound mind.

Question 75

Formalities of a will include channeling, evidentiary, ritual, and bureaucratic functions.

Answer 75

False, they are channeling, evidentiary, ritual, and protective

Question 76

In Illinois, a son and two of the decedent’s friends signed as witnesses to decedent’s will. The son can not inherit under this will without divesting his interest.

Answer 76

False, there need only be two valid witnesses

Question 77

In Illinois, a holographic will is only valid if written entirely in the handwriting of the testator.

Answer 77

False, in Illinois a holographic will is always invalid

Question 78

In Illinois, a codicil to a will is executed in the same manner as a will.

Answer 78

True

Question 79

A trustee of a revocable trust has a fiduciary duty to residuary beneficiaries.

Answer 79

False, a trustee of a revocable trust has a fiduciary duty only to the settlor.

Question 80

To prove undue influence a complainant may show that a business relationship existed between the testator and influencing party.

Answer 80

False. They will prove a confidential relationship.

Question 81

The test for Testamentary Capacity is Capability, not actual knowledge.

Answer 81

True

Question 82

A mutual will is one instrument executed by two persons as the will of both. When one of them dies, the instrument is probated as the decedent’s will. When the other dies, the instrument is again probated as the second decedent.

Answer 82

(F: this is the definition of a Joint will)

Question 83

Illinois recognizes a holographic will as valid.

Answer 83

False

Question 84

Preprinted will forms are entitled to probate as a formal will in compliance with the Wills Act.

Answer 84

False

Question 85

Duress occurs when a donee performs a wrongful act that coerced the donor into making a donative transfer that the donor would not otherwise have made.

Answer 85

True

Question 86

Class gifts cannot be given to the Testator’s neighbors; they can only be given to intended beneficiaries and closely related kin.

Answer 86

False

Question 87

Trustees hold equitable title in the trust, while beneficiaries hold legal title to the trust.

Answer 87

False

Question 88

The Settlor of the Trust is the same name as the Grantor.

Answer 88

True

Question 89

All revocable inter vivos trusts are irrevocable upon the Grantor’s Death.

Answer 89

True

Question 90

The Rule Against Perpetuities does not apply in Illinois, but you can elect for it to apply if you so wish.

Answer 90

True

Question 91

A Power of Attorney is “activated” the day the signer becomes incapacitated and remains active after his death.

Answer 91

False – POA lasts only until the signer’s death

Question 92

A house that is owned by a married couple in joint tenancy is NOT included in a probate estate.

Answer 92

True – the property transfers to the surviving spouse upon the death of the other spouse and does not need to be probated.

Question 93

While most trusts are created by people, they may also be created by courts.

Answer 93

True – constructive trusts

Question 94

A will must be in writing and witnessed while a codicil need only be in writing.

Answer 94

False – codicils must also be witnessed

Question 95

A will can be revoked in a number of ways and, despite the testator’s intent, if the statute is followed to the letter a will be declared destroyed.

Answer 95

False – the testator’s intent is paramount and they must intend the will be invalid and destroyed to be properly revoked

Question 96

Wills are like other contracts and a person must be 21 to enter into one.

Answer 96

False – people under 21 can create a will

Question 97

Creating a living trust will always result in a reduction in the creator’s taxes

Answer 97

False – revocable trusts have no impact on taxes

Question 98

Creating a living trust will not let creditors be able to take my property

Answer 98

False – the assets in a living trust are still deemed to be the grantor’s property

Question 99

A person with a Power of Attorney does not need anything else to be able to access the medical records of the incapacitated person

Answer 99

False – HIPAA laws still in effect

Question 100

A will allows a person to choose who will represent their interests in a will

Answer 100

True – otherwise, a representative will be chosen by the court