Although the past few decades have brought changes to estate tax laws, estate planning fundamentals remain the same. How much do you understand about the basics of estate planning? Take the following quiz and test your knowledge:
True or False?
- Not having a will is a good way to avoid probate.
- A will prolongs the probate process and increases estate costs.
- Joint property (with rights of survivorship), life insurance proceeds, IRA accounts and other retirement accounts all pass to the beneficiaries you name in your will or revocable trust.
- Probating an estate increases estate taxes.
- Probate can be avoided by placing your assets in a revocable living trust.
- A living trust is generally inflexible and cannot be changed, and the person who creates a trust gives up control of his assets.
- Revocable living trusts can reduce income taxes.
- You are doing a friend or family member a favor by naming him to serve as the personal representative (executor) or trustee.
- The federal estate tax has been rolled back, so I don’t need to worry.