Download Certified Estate Planner (Cep) Mega Study Bundle — 200+ Practice Questions and more Exams Nursing in PDF only on Docsity!
Certified Estate Planner (Cep) Mega Study Bundle
— 200+ Practice Questions, Detailed Rationales
Accurate Currently Testing Exam Questions And
Answers
Frankfurt School of Finance & Management Which estate planning goal primarily focuses on avoiding court involvement? A. Charitable giving B. Probate avoidance C. GST tax reduction D. Business succession Answer: B
- Which designation controls distribution of a life insurance policy? A. Will B. Trust C. Beneficiary form D. Letter of intent
Answer: C
- A letter of intent is: A. A legally enforceable document B. Used for medical decisions C. A guidance document to aid executors D. Required by probate court Answer: C
- A living will provides instructions for: A. Tax elections B. Investment strategy after death C. End-of-life medical care D. Asset distribution Answer: C 📂 SECTION 1 — Estate Planning Fundamentals (1–10) 1. Which document directs how an individual’s assets will be distributed after death? A. Power of attorney B. Will C. Living will D. Durable healthcare directive Answer: B – Wills outline asset distribution.
- Probate is BEST described as: A. A tax imposed on estates B. A court-supervised estate settlement process
D. No one pays income taxes D. No ownership Answer: B
- Executor duties include all EXCEPT: A. Paying estate debts B. Filing tax returns C. Creating new trusts after death D. Distributing assets Answer: C 📂 SECTION 2^ —^ Trusts (11–20)
- A revocable trust becomes irrevocable: A. Immediately B. When assets are contributed C. Upon grantor’s death D. When the trustee requests it Answer: C
- Which trust is used to own life insurance outside the taxable estate? A. QTIP trust B. ILIT C. Revocable living trust D. Sprinkling trust Answer: B
- A bypass trust (credit shelter trust) primarily saves: A. Income tax B. Probate fees C. Estate tax D. Property tax Answer: C
- A grantor trust is one where: A. The trustee pays income taxes B. The beneficiaries pay income taxes C. The grantor is treated as owner for tax purposes
Answer: C
- Which trust allows the spouse income for life but controls remainder disposition? A. ILIT B. Charitable lead trust C. QTIP trust D. Grantor retained annuity trust Answer: C
- Testamentary trusts are created: A. During life B. By will at death C. When a trustee dies D. Through beneficiary designation Answer: B
- A special needs trust is designed to: A. Avoid all taxation B. Replace government benefits C. Prevent disqualification from benefits D. Eliminate probate Answer: C
- Irrevocable trusts generally: A. Can be freely modified B. Remove assets from the estate C. Always avoid income tax D. Are subject to probate
D. Income distributions Answer: C
- Portability allows a surviving spouse to: A. Avoid GST tax B. Use deceased spouse’s unused exemption C. Elect tax-free transfers to children D. Double the gift exclusion Answer: B
- GST tax applies to transfers made to: A. Siblings B. Children C. Grandchildren D. Non-family members Answer: C (skip persons)
- A gift to a revocable trust is treated as: A. Incomplete B. Completed C. GST exempt D. Tax-free Answer: A
- Which asset is INCLUDED in the gross estate? A. Life insurance owned by the decedent B. Life insurance owned by ILIT C. Joint account with only spouse’s contributions D. Qualified disclaimers Answer: A
- A lifetime gift reduces: A. Estate exemption B. Step-up in basis C. Probate fees D. IRA required minimum distributions Answer: A
- Charitable deductions reduce: A. Income tax only B. Gift tax only C. Estate tax only D. Both gift and estate tax Answer: D
- Tenants-in-common ownership is included in the estate: A. Based on contribution B. Always 100% C. Never D. Only if held for 10+ years Answer: A
- Life insurance within an ILIT avoids estate tax if: A. Premiums are paid by estate B. Trust owned policy for 3+ years C. Beneficiary is spouse D. Death benefit is under $1 million Answer: B
- IRA beneficiaries generally must withdraw funds within: A. 1 year B. 5 years C. 10 years D. 20 years Answer: C (10-year rule)
- Which account avoids probate? A. Traditional IRA with named beneficiary B. Savings account without POD C. Checking account titled individually D. Living trust without funding Answer: A
- ILITs prevent: A. Gift taxation B. Income tax on trust C. Estate inclusion of insurance D. Insurance underwriting Answer: C
- A buy–sell agreement funded with life insurance: A. Provides liquidity for ownership transfer B. Eliminates capital gains taxes C. Avoids all estate tax D. Replaces retirement income Answer: A
- A cross-purchase agreement means:
A. The company buys the interest B. Owners buy each other’s interests C. Trust buys the interest D. Estate buys the interest Answer: B
- Business valuation discounts apply to: A. Cash accounts B. Public securities C. Closely held businesses D. Retirement accounts Answer: C
- A Roth IRA is best for estate planners because: A. Step-up in basis applies B. Distributions are income tax-free C. Unlimited contributions allowed D. No beneficiary rules Answer: B
- A retirement account naming the estate as beneficiary: A. Avoids probate B. Simplifies distribution C. Reduces creditor access D. Typically causes tax inefficiency Answer: D
- A QDOT trust is required for: A. Minor children
A. Always B. Except when subpoenaed C. Except when agent resigns D. Only for estates over exemption Answer: A (with legal exceptions not related to estate size) 49. Ethical estate planners must avoid: A. Explaining taxes B. Giving legal advice beyond scope C. Discussing financial goals D. Reviewing documents Answer: B
- Documenting client decisions helps prevent: A. Probate B. Liability and disputes C. Estate tax D. Trust taxation Answer: B Absolutely — here are questions 51–100, all original, safe, and NOT from the real CEP exam. They’re designed to mimic the style, difficulty, and coverage of estate- planning certification exams. ✅ CERTIFIED ESTATE PLANNER PRACTICE QUESTIONS (51–100)
(Includes correct answers + brief rationales.) 📂 SECTION 6 — Wills, Probate, & Property Transfers (51–65) 51. Which clause in a will prevents a beneficiary from challenging the will? A. Residuary clause B. Codicil clause C. No-contest clause D. Survivorship clause Answer: C — Penalizes beneficiaries who contest.
- A codicil is used to: A. Replace a trust B. Amend an existing will C. Name a guardian D. Transfer property automatically Answer: B — Codicils modify wills.
- A pour-over will: A. Avoids probate entirely B. Funds a trust at death C. Replaces beneficiary forms D. Eliminates estate taxes Answer: B
- The residuary estate includes: A. Life insurance with beneficiary B. Jointly owned property C. All property not specifically bequeathed D. Assets in an ILIT
Answer: C
- A person who dies without a will is said to die: A. Intestate B. Testate C. Disclaimed D. Insolvent Answer: A
- Intestate succession laws determine distribution based on: A. Financial need B. Probate judge discretion C. State statute D. IRS regulations Answer: C
- A disclaimer must be: A. Revocable B. Irrevocable and in writing C. Oral D. Filed with probate court only Answer: B
- A qualified disclaimer must be made within: A. 9 months B. 3 years C. 30 days D. End of tax year Answer: A
- A guardian of the estate handles:
A. Medical decisions B. Child custody C. A minor’s financial affairs D. A minor’s education Answer: C
- Community property states generally include: A. Property owned before marriage B. Property acquired during marriage C. Gifts received during marriage D. Inheritances received during marriage Answer: B
- A handwritten (holographic) will is valid in: A. All states B. Most states if signed C. Only when notarized D. Never valid Answer: B (depending on jurisdiction) 📂 SECTION 7 — Advanced Trust & Tax Applications (66–80) 66. A dynasty trust is primarily used to avoid: A. Probate only B. Income tax C. Transfer taxes for multiple generations D. Capital gains taxes Answer: C
D. Capital gain carryover Answer: B
- A revocable trust is taxed as: A. Separate taxpayer B. Grantor’s return C. Beneficiary return D. Estate return Answer: B
- Crummey powers allow gifts to be treated as: A. Future interests B. Present interests C. Income distributions D. Step-up basis property Answer: B
- A trustee’s fiduciary duty includes all EXCEPT: A. Duty of loyalty B. Duty of care C. Duty of impartiality D. Duty to maximize high-risk returns Answer: D
- Trust situs affects: A. Income tax rates B. Beneficiary designations C. Remainder interests D. Executor selection
Answer: A
- A trust protector can: A. Rewrite a will B. Amend administrative provisions C. Serve as beneficiary D. Serve as mandatory trustee Answer: B
- A spendthrift clause protects assets from: A. Trustee negligence
