The primary purpose of a trust is to:

designate heirs to an estate.

provide funding for the education of future heirs.

allow one party to hold property for the benefit of another party.

reduce estate taxes for the heirs of an estate.

Assessment question

Which of the following are typical advantages of establishing a trust? Choose 3 answers.

Establishing a trust is less expensive than probating a will.

A trust is more private than a will.

A trust gives more control over the use of the inherited property than a will does.

A trust does not have to go through probate.

Assessment question

What are the two most important purposes of estate planning? Choose 2 answers.

speeding up the process of estate settlement

reducing estate taxes for the heirs

ensuring that property is distributed as the owner desires

limiting undesired medical intervention in a person's last days

Assessment question

The person named in a will and given the responsibility to implement the terms of the will on behalf of the decedent is called the:

executor.

probationer.

attorney-in-fact.

testatrix.

Assessment question

A will that designates a per stirpes distribution divides the estate:

evenly among the decedent's children, with a deceased child's portion being split evenly among his or her heirs.

so that half goes to the children and half to the grandchildren.

so that half goes to a surviving spouse and the rest is divided among all other heirs.

evenly among all heirs.

Assessment question

When a person dies intestate, how is that person's estate distributed?

The estate is divided evenly among all heirs.

State laws determine how that person's estate is distributed.

The courts will interview next of kin to determine how the decedent wanted his property distributed.

The decedent's spouse automatically inherits the decedent's property, and, if there is no spouse, it goes to the next of kin.

Assessment question

Which of the following are defenses available to an insurance company in a suit on nonpayment of a claim? Choose 3 answers.

illegal actions of the insured

fraud by the insured

lack of insurable interest

commercial infeasibility

Assessment question

The concept that the owner of an insurance policy must be at risk for financial hardship at the loss of the insured subject is called:

calculated risk.

beneficiary designation.

relatable connection.

insurable interest.

Assessment question

A typical homeowner's insurance policy covers:

catastrophic failure of the heating and air conditioning unit.

damage from termites.

personal liability for someone injured on the property.

damage from flooding.

Assessment question

Automobile insurance that covers loss, damage, and destruction due to fire, hurricane, hail, vandalism, and theft is called:

collision coverage.

converted coverage.

complete coverage.

comprehensive coverage.