CFP (Certified Financial Planner) Practice Questions — All Questions

A will primarily:

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

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

Beneficiary designations on accounts like retirement plans generally:

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

Named beneficiaries typically receive assets directly, bypassing probate.

Probate is:

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

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

A revocable living trust can help by:

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

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