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American College HS330 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Estate Planning Process & Legal Foundations | 20% | - Probate process and non-probate transfers - Wills, powers of attorney, and advance directives - Objectives and ethical considerations - Property ownership forms and titling |
| Topic 2: Federal Gift Tax System | 20% | - Taxable gifts and filing requirements - Exclusions, exemptions, and valuation rules - Gift tax calculation and strategies |
| Topic 3: Advanced Planning Strategies | 15% | - Business succession planning & buy-sell agreements - Life insurance in estate planning - Planning for incapacity and special needs - Charitable giving techniques |
| Topic 4: Federal Estate Tax System | 25% | - Credits and tax computation - Marital and charitable deductions - State death taxes and basis adjustments - Gross estate inclusion rules |
| Topic 5: Trusts & Fiduciary Arrangements | 20% | - Trust income taxation - Generation-skipping transfer tax (GSTT) - Specialized trust structures - Revocable and irrevocable trusts |
American College Fundamentals of Estate Planning test Sample Questions:
1. Which of the following statements concerning marital transfers to a non-U.S. citizen spouse is (are) correct?
1.A marital deduction is automatically available as long as property is transferred outright to the non-citizen spouse.
2.A marital deduction is automatically available if the transferor-decedent spouse is a U.S. citizen.
A) Neither 1 nor 2
B) 2 only
C) 1 only
D) Both 1 and 2
2. Generally all the following statements concerning life insurance arrangements for partnership buy-sell agreements are correct EXCEPT:
A) With an entity-purchase agreement the formula used for determining the number of life insurance policies needed is N (number of partners) + 1.
B) With a cross-purchase agreement each partner purchases life insurance on the life of each of the other partners.
C) With a cross-purchase agreement the individual partners are the applicants, owners, beneficiaries and premium-payers of the policies.
D) With an entity-purchase agreement the partnership strives to maintain face amounts of coverage equal to its obligations under the agreement.
3. A married man died this year leaving a gross estate of $2,700,000. Some additional facts concerning his estate are:
1.Administration expenses and debts $300,000
2.Marital deduction 800,000
3.Applicable credit amount (2005) 555,800
4.Applicable exclusion amount (2005) 1,500,000
5.State death taxes payable 17,700
Under the Unified Rate Schedule for computing estate taxes if the amount with respect to which the tentative tax to be computed is over $1,000,000 but not over $1,250,000, the tentative tax is $345,800, plus 41 percent of the excess of such amount over $1,000,000. If the amount is over $1,250,000 but not over $1,500,000, the tentative tax is then $448,300, plus 43 percent of the excess of such amount over $1,250,000. If the amount is over $1,500,000 but not over $2,000,000 the tentative tax is then $555,800 plus 45% of the excess of such amount over $1,500,000. Based on these facts, the net federal tax payable is
A) 0
B) $47,065
C) $42,865
D) $37,035
4. In all cases a trustee must invest trust assets in accordance with the
A) requirements of a state's mandatory legal list
B) requirements of a state's permissive legal list
C) stated provisions of the trust instrument
D) common law standard of the prudent person
5. In addition to substantial probate assets, a married man with two minor children has a $1,000,000 ordinary life insurance policy payable to his estate. He wants to make certain that if he predeceases his wife the death proceeds will be available to provide income for his wife during her lifetime and to provide for their two children after her death. He would like the policy and/or its death proceeds to be as free of federal gift and estate taxes as possible with respect to both him and his wife. Which of the following courses of action would best accomplish these objectives?
A) Assign the policy to his wife who will establish a revocable intervivos trust to receive the death proceeds
B) Designate his wife as beneficiary and she will establish a testamentary trust in her will to receive the proceeds at her subsequent death
C) Establish a revocable intervivos trust and designate the trustee to receive death proceeds
D) Assign the policy to an irrevocable intervivos trust with five and five powers and designate the trustee to receive the death proceeds
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: A | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: D |





