CFP (Certified Financial Planner) Practice Questions — All Questions

A will primarily:

• a.Manages assets while alive only
• b.Avoids all taxes automatically
• c.Replaces insurance
• d.Directs how a person's assets are distributed after death✓

A will specifies distribution of assets and can name guardians and an executor.

Beneficiary designations on accounts like retirement plans generally:

• a.Are illegal
• b.Have no effect
• c.Pass assets directly, often outside the will and probate✓
• d.Are overridden by the will always

Named beneficiaries typically receive assets directly, bypassing probate.

Probate is:

• a.An insurance policy
• b.A tax rate
• c.A type of trust
• d.The legal process of validating a will and settling an estate✓

Probate is the court process of administering a deceased person's estate.

A revocable living trust can help by:

• a.Allowing assets to pass to beneficiaries while often avoiding probate✓
• b.Avoiding the need for any planning
• c.Eliminating all taxes
• d.Guaranteeing investment returns

A funded revocable living trust can help avoid probate for the assets it holds.