Test Your Estate Planning Knowledge

Think estate plans are just for the rich and famous? Think again – answer these five questions and find out more about estate planning. 

CTA does not give tax advice. Be sure to consult your tax advisor for more information.

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A will is required to:

You need a will to name guardians for your minor children. You may also use your will to name beneficiaries for your property, but it may not be necessary if the property is titled properly. Life insurance proceeds go to the named beneficiary on the policy, regardless of the contents of the will.



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If you leave your 403(b) or 457 plan to your son in your will, but your daughter is the beneficiary of record with your district, who inherits the account balance upon your death?

Your daughter. Beneficiary designations on 403(b) and 457 plans, annuities and life insurance policies supersede will instructions, so it is important to make sure that your documents are consistent and reflect your current wishes.



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In 2011, what will be the total amount of assets that you can leave to your spouse without triggering federal estate taxes?

You can leave an unlimited amount to your spouse as long as he or she is a U.S. citizen.



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In order to ensure that your wishes regarding your medical care are followed if you are incapacitated, you should:

Complete advance directives. Your will goes into effect only after your death, so instructions included there wouldn’t be seen until it was too late. To ensure that you receive the kind of care you want, complete a living will and a health care power of attorney. State-specific forms generally are available free from your state’s department of aging, your doctor or your local hospital.



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What are some of the advantages of a trust as an estate planning tool?

A trust can allow you to pass along assets without going through probate (the legal process of proving a will, which can be lengthy and expensive). Depending on the type of trust, you may also be able to minimize estate taxes, control the disbursement of assets to beneficiaries and even draw income from the trust while you are alive.