CFP® Practice Question

Which of the following statements concerning a Will are correct? (1) A will can be altered, amended, or completely rewritten at any time before a person’s death. (2)  A will cannot be rewritten but can be amended at any time by a codicil. (3)  A will must be signed by the maker and usually must…

Which of the following transfers would most likely trigger the Generation-Skipping Transfer (GST) Tax, assuming the applicable exemptions have already been fully used? A grandmother gifts $18,000 to her grandson’s 529 college savings plan. A father transfers $10 million to his daughter as part of his estate plan. A grandfather creates a trust that distributes $2…

John and Maria are both 62 years old and considering when to begin collecting Social Security retirement benefits. John has a higher earnings history than Maria. Maria did not work for many years while raising their children and has lower lifetime earnings. They are trying to maximize their combined lifetime benefits. Which of the following…

Lisa, age 35, is a high-income earner with a modified adjusted gross income (MAGI) of $165,000 in 2025. She wants to contribute to a Roth IRA. She is not covered by a retirement plan at work. Lisa also wants to use the funds for a first-time home purchase in 3 years. Based on current IRS…

Which of the following statements concerning a Will are correct? (1) A will can be altered, amended, or completely rewritten at any time before a person’s death. (2)  A will cannot be rewritten but can be amended at any time by a codicil. (3)  A will must be signed by the maker and usually must…

Which of the following statements concerning OASDI disability income benefits is correct? Disability is defined as the inability to perform all major duties of the insured’s own occupation. Unless specifically exempted, a waiting period of 12 months must be satisfied. If the disabled worker is also receiving workers compensation benefits, the full OASDI benefit is…

Which of the following situations is most likely to be excluded from coverage under a standard life insurance policy? The insured dies from a heart attack while on vacation overseas. The insured dies in a car accident while driving under the influence of alcohol. The insured dies two months after purchasing the policy, and the cause…

Dale refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $350,000 at the time of the refinance and the interest rate is 3%? $680 $771 $1,136 $1,242 CLICK TO REVEAL ANSWER Expand A is the answer. Brandon pays his mortgage every two weeks which…

A CFP® professional is working with a client who is considering a complex estate planning strategy involving the transfer of assets to a grantor retained annuity trust (GRAT). The client expresses concern about how the IRS might interpret a unique aspect of the proposed transaction. The CFP® professional suggests the client consult with a tax…

Which of the following statements accurately describes a key difference between a Traditional IRA and a Roth IRA? A. Contributions to both Traditional and Roth IRAs are always tax-deductible, regardless of income level. B. Required minimum distributions (RMDs) must begin at age 73 for both Traditional and Roth IRAs. C. Qualified withdrawals from a Roth…