American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 31:

  A number of states have passed statutes governing "living wills." Which of the following statements concerning a living will is (are) correct?

  1.

  A living will is an alternative to an inter vivos trust under certain circumstances.

  2.

  A living will is an oral will made by the testator during a final illness when it is impossible to write one.

  A. Neither 1 nor 2
  B. 1 only
  C. 2 only
  D. Both 1 and 2
  A. Neither 1 nor 2

• Question 32:

  All the following are conditions that must be met if an otherwise nonqualified terminable interest is to qualify (as QTIP) for the federal estate tax marital deduction EXCEPT:

  A. The surviving spouse must make a qualified disclaimer to all other property in the deceased spouse's estate within 9 months of death.
  B. The surviving spouse must be given a lifetime right to receive all the property's income at least annually.
  C. The deceased spouse's executor must make an irrevocable election to have the property includible in the surviving spouse's gross estate.
  D. No person can be given the right to direct that the property go to anyone other than the surviving spouse as long as the surviving spouse is alive.
  A. The surviving spouse must make a qualified disclaimer to all other property in the deceased spouse's estate within 9 months of death.

• Question 33:

  On the advice of their attorney and accountant, Betsy and John have decided to make substantial transfers. They would like to pass most of their considerable wealth to their grandchildren. Which of the following statements concerning gifts made to their grandchildren is correct?

  A. Betsy and John may elect to split any GSTT transfers to the grandchildren.
  B. The value of Betsy and John's GSTT exemption amounts are slightly increased when used at death rather than during lifetime.
  C. The GSTT annual exclusion may be utilized by Betsy and John for each grandchild during lifetime and at death.
  D. The GSTT annual exclusion is unavailable for years in which Betsy and John make tuition gifts for the grandchildren.
  A. Betsy and John may elect to split any GSTT transfers to the grandchildren.

• Question 34:

  All the following statements concerning guardians for minors are correct EXCEPT:

  A. A guardian has equitable title to the property he administers for the minor.
  B. A guardian named in a deceased parent's will is not necessarily binding on the court.
  C. A guardian of the person of a minor may not necessarily be the guardian of the minor's property.
  D. A special guardian can be appointed by the court to protect a minor's rights in a legal proceeding.
  A. A guardian has equitable title to the property he administers for the minor.

• Question 35:

  A taxable gift has been made in which of the following situations?

  1.

  A father manages his disabled son's business for a year without compensation since a replacement manager would have cost $25,000.

  2.

  A father verbally promises his 21-year-old daughter that he will give her his antique Mercedes when she graduates from college next year.

  A. 2 only
  B. Neither 1 nor 2
  C. Both 1 and 2
  D. 1 only
  B. Neither 1 nor 2

• Question 36:

  Generally all the following statements concerning life insurance arrangements for partnership buy- sell agreements are correct EXCEPT: A. With an entity-purchase agreement the formula used for determining the number of life insurance policies needed is N (number of partners) + 1.

  B. With an entity-purchase agreement the partnership strives to maintain face amounts of coverage equal to its obligations under the agreement.
  C. With a cross-purchase agreement each partner purchases life insurance on the life of each of the other partners.
  D. With a cross-purchase agreement the individual partners are the applicants, owners, beneficiaries and premium-payers of the policies.
  A

• Question 37:

  Which of the following statements concerning property is correct?

  A. A tree growing on land is tangible personal property.
  B. A mortgage on real estate is real property.
  C. Any property that is not real property is personal property.
  D. A bond issue secured solely by a corporation assets is tangible personal property.
  C. Any property that is not real property is personal property.

• Question 38:

  A married man died intestate. In addition to his wife, he was survived by two minor children and both his parents. Which of the following statements describes the typical intestate distribution in this situation?

  A. The widow receives at least one-third of the estate and the children divide the remainder of the estate equally.
  B. The widow receives one-third of the estate and the remainder is divided equally among the two children and the parents of the decedent.
  C. The widow receives half the estate and the remaining half is divided equally between the decedent's parents.
  D. The widow receives the entire probate estate as trustee for the benefit of the two minor children.
  A. The widow receives at least one-third of the estate and the children divide the remainder of the estate equally.

• Question 39:

  Many trust instruments provide for the removal of the original trustee. Valid reasons for removing the original trustee include which of the following?

  1.

  A shift in trust situs is desirable because of changes in law.

  2.

  The beneficiary has moved his or her residence to a distant state.

  A. 1 only
  B. Both 1 and 2
  C. Neither 1 nor 2
  D. 2 only
  B. Both 1 and 2

• Question 40:

  The personal representative of a decedent has the duty to file all the following tax returns EXCEPT

  A. the federal estate tax return
  B. the decedent's final income tax return
  C. the estate's income tax return
  D. the surviving spouse's income tax return for the year of death
  D. the surviving spouse's income tax return for the year of death