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CFP Certification Exam: Estate Planning
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The CFP Certification Exam in the U.S. includes a significant, heavily weighted section on Estate Planning, focusing on transferring wealth, minimizing taxes, and managing client legacies. It tests proficiency in property titling, wills, trusts, gift/estate tax laws, and charitable giving, primarily through scenario-based, multiple-choice questions.  Key Estate Planning Content Areas: Estate Documents & Techniques: Wills, powers of attorney, trust structures (revocable/irrevocable), and probate avoidance. Taxation: Gift tax, estate tax, and generation-skipping transfer tax (GSTT)... Show more
CFP Certification Exam: Estate Planning
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25 Questions

1. Which of the following qualify as income in respect of a decedent (IRD)?
(1) Accrued rental income
(2) Stock dividends paid after the decedent’s death
(3) Required minimum distributions taken after death from an IRA
(4) Deferred compensation
2. In which of the following trusts is the surviving spouse given a general power of appointment by the decedent spouse to distribute the decedent’s property as the surviving spouse determines? Since the surviving spouse holds a general power of appointment, he or she may use trust assets to benefit him or herself directly.
3. All but which of the following are correct regarding completed gifts?
4. If the holder of a general power of appointment may only exercise the power with the consent of the grantor or an adverse third-party, which of the following is correct?
5. To qualify for the Section 6166 election, a decedent’s gross estate must include an interest in a closely-held business that exceeds __________ of the value of his or her adjusted gross estate.
6. Which of the following strategies will avoid ancillary probate?
(1) Irrevocable trust
(2) Testamentary trust
(3) Revocable living trust
(4) Deed delivered to an escrow agent
7. All but which of the following are correct regarding probate?
8. Which of the following is/are correct regarding probate?
(1) A decedent’s estate will pay more federal estate tax if assets pass through probate.
(2) Probate is held only in the state where the decedent dies.
9. A federal gift tax return must be filed if which of the following events occur?
10. Lifetime taxable gifts are __________, meaning that prior taxable gifts must be __________ when computing the current taxable amount of gifts.
11. Which of the following is the limit on direct charitable contributions at death?
12. Which of the following is an irrevocable trust created to pay for the supplemental needs of a disabled individual not covered by government assistance, while at the same time protecting those assets from governmental attachment?
13. Which of the following is/are correct regarding simple and complex trusts?
(1) A simple trust is required to pay out all of its income annually to trust beneficiaries and cannot distribute trust principal.
(2) A complex trust may accumulate income or make distributions from trust principal.
14. Which of the following is/are correct regarding the amount of property that may be gifted between spouses?
(1) There is no limit on the amount of property that may be gifted tax-free between citizen spouses.
(2) For non-citizen spouses, the annual amount of tax-free gifts is limited to $500,000 per year, or $1,000,000 for married couples.
15. A qualified disclaimer must be made within __________ after the later of the date on which the transfer creating the interest was made, or the day on which the individual disclaiming the interest attains age __________.
16. Which of the following is/are correct regarding gifts made to an educational institution or medical care provider?
(1) Gifts made directly to an educational institution or medical care provider are not taxable gifts.
(2) Gifts made first to a donee, who subsequently pays an educational institution or medical care provider, are subject to gift tax.
17. Bill establishes an irrevocable trust for the benefit of his two children and transfers $50,000 to the trustee of the trust. He gives his oldest child the right to lifetime income from the trust and, at the death of that child, the trust corpus will be distributed to the youngest child. Which of the following are correct regarding the transfer Bill has made?
(1) Bill must split the gift of cash into a life estate and income interest.
(2) The life estate of the first child qualifies for the gift tax annual exclusion.
(3) The remainder interest of the second child does not qualify for the gift tax annual exclusion because it is a future interest gift.
(4) Neither the life estate nor the remainder interest will qualify for the gift tax annual exclusion.
18. The fair market value of publicly traded stock, as included in the decedent/owner’s gross estate, is determined by:
19. Which of the following is/are correct regarding self-canceling installment notes (SCINs)?
(1) A SCIN cancels the obligation of the buyer to make any remaining payments to the seller, if the seller dies.
(2) The buyer of a SCIN will receive a discount for the self-canceling feature of the note.
20. In a/an __________ ILIT, the only property included in the trust is a life insurance policy on the life of the grantor.
21. Which of the following is/are correct regarding the generation skipping transfer tax?
(1) Transfers for qualified medical and tuition payments are exempt from gift tax and GSTT.
(2) Transfers to family members are not subject to GSTT.
22. All but which of the following are correct regarding pooled income funds?
23. Which of the following may cause a will to be considered invalid?
(1) The testator was influenced by another person.
(2) The testator did not have adequate mental capacity to execute a will.
24. Which of the following trusts provides a surviving spouse with a lifetime interest in trust assets, and may include a right to invade principal on his or her behalf, limited to an ascertainable standard?
25. Which of the following is/are correct regarding durable powers of attorney?
(1) A durable power of attorney survives the death of the principal.
(2) A durable power of attorney survives disability of both the principal and the agent.

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