Selecting an Appropriate Trust

Which of the following trusts should Jason establish in his Will to provide for his son Gaven’s living expenses until Gaven reaches age 65 if Gaven is currently a 30-year old unemployed aspiring actor? 2503(b) trust 2503(c) trust Crummey trust Totten trust CLICK TO REVEAL ANSWER Expand A is the answer. The 2503(b) trust would…

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Calculating Rate of Return

Course: Investment PlanningLesson 1: Key Principles of Investing Student Question: Hey Dan, Hope you are doing well. Can you help solve a practice question?  I looked through the textbook and my notes, and just couldn’t wrap my brain about how to solve the problem below.  The confusing part to me is that the fund was not…

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Owner of a Grantor Trust

In which of the following situations would the grantor of a trust not be considered the owner? The grantor has a reversionary interest in the trust, of which the grantor’s son is the sole beneficiary, but the grantor cannot exercise this power until eight years after transfer of property to the trust. The grantor retains…

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CFP Board Encourages Pro Bono

CFP® Board Updates Pro Bono is typically thought of as something attorneys provide.  While the work attorneys do to help those in difficult legal situations without access to competent support, it’s just as important that those in financial services provide a similar benefit when possible. If you’re a CFP® Professional with a desire to help…

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Section 303 Redemption

A Sec. 303 redemption is most likely appropriate for which of the following estates? At Fred’s death, Fred owned all of his assets including the stock of a closely-held corporation in joint tenancy WROS with his wife. Before Gloria’s death, she transferred all of her assets including the stock in a closely-held corporation to an…

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Characteristics of a Will

Which of the following statements concerning a Will are correct? A will can be altered, amended, or completely rewritten at any time before a person’s death. A will cannot be rewritten but can be amended at any time by a codicil. A will must be signed by the maker and usually must be witnessed by…

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Underinsured Dwelling

Frank carries an H0-3 policy with $400,000 of coverage and a $1,000 deductible. It would cost $600,000 to rebuild Frank’s house. How much will his insurance company pay on a $100,000 claim related to a fire that started in Frank’s kitchen? $79,000 $82,333 $83,333 $99,000 CLICK TO REVEAL ANSWER Expand B is the answer. Frank…

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Calculating Realized Compound Yield on a Bond

An investor bought a bond at par that matures in 15 years. The bond pays an annual coupon of $130 and the reinvestment rate is 9%. What is the realized compound yield of this bond? 11.05% 12.55% 13.00% 14.10% CLICK TO REVEAL ANSWER Expand A is the answer. One would anticipate a realized compound yield…

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$1 million gift to Center for Financial Planning

CFP® Board Updates The CFP Board Center for Financial Planning seeks to create a more diverse and sustainable financial planning profession.  The center addresses profession-wide challenges in the areas of diversity and workforce development by bringing together industry professionals, educators, firms, and experts to collaborate and conduct and publish research in these areas. On August…

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Section 303 Redemption

A Sec. 303 redemption is most likely appropriate for which of the following estates? At Fred’s death, Fred owned all of his assets including the stock of a closely-held corporation in joint tenancy WROS with his wife. Before Gloria’s death, she transferred all of her assets including the stock in a closely-held corporation to an…

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