Worksheets3F: Understanding Estate and Financial Planning
Total questions: 10
Worksheet time: 5mins
What is the primary purpose of estate planning?
To increase annual income
To manage and distribute assets after death
To avoid paying any taxes
To buy more property
Which document allows a person to specify their wishes regarding medical treatment if they become unable to communicate?
Trust
Living will
Guardianship
Power of attorney
What is a will?
A document that outlines funeral arrangements
A legal document stating how a person’s assets should be distributed after death
A type of insurance policy
A savings account
Who is typically appointed to care for minor children if both parents pass away?
Executor
Guardian
Trustee
Beneficiary
Which of the following best describes a trust?
A type of bank account
A legal arrangement where assets are managed by one party for another’s benefit
A retirement plan
A loan agreement
Why might someone create a living will as part of their estate plan?
To avoid paying property taxes
To ensure their medical treatment preferences are followed if they cannot communicate
To increase their investment returns
To name a guardian for their children
How can establishing a trust help in estate planning?
It guarantees higher interest rates on savings
It allows assets to be managed and distributed according to specific wishes, possibly avoiding probate
It eliminates all taxes
It replaces the need for a will
A person wants to ensure their minor children are cared for by a trusted family member if they pass away. Which estate planning tool should they use to accomplish this?
Living will
Will (to name a guardian)
Trust
Power of attorney
Which of the following is a potential tax implication of estate planning?
Estate taxes may be owed on assets transferred after death
All taxes are automatically eliminated
Only income taxes apply
Taxes are paid only by the executor
If someone dies without a will, what is the likely outcome for their assets?
Assets are distributed according to their wishes
Assets are distributed according to state laws of intestacy
Assets are given to charity
Assets are automatically transferred to friends
