About This QuizRegardless of age, wealth or health, everyone could stand some estate-planning tips. Test your knowledge -- and learn a few helpful hints -- with the Estate Planning quiz.
How old do you have to be to write a will?
there is no age minimum
Most states require that the testator of a will be 18 years old.
What's the document that outlines your health care wishes in case of severe injury or illness?
A living will states, among other things, if you would want to be kept alive mechanically if you were to be declared brain dead.
What's the word for dying without a will?
Many people die intestate, or without a will. In that case, the state distributes your assets.
What's something that should NOT be included in a will?
instructions for foster children
special gifts of personal property
life insurance beneficiaries
Details about life insurance policies should be restricted to the policies themselves. Putting them in the will could cause delays and tax disadvantages.
What happens if you give someone power of attorney but not durable power of attorney?
Your will becomes null and void.
It goes out of effect if you become incapacitated.
Someone with durable power of attorney can help you if you become incapacitated. "Regular" power of attorney doesn't cover that situation, so it would go out of effect. Your will remains valid, though.
Are oral wills valid in most states?
Oral wills are valid in about 20 states -- but there are limited circumstances.
Is a certain income level necessary if you want to set up a trust for your children?
You don't have to be a millionaire to set up a trust for your kids, but it's more beneficial if you have an estate worth more than $100,000. If your estate is worth more than that, your case will probably have to go through probate court if you haven't set up a trust.
How much could the probate process cost?
1 to 2 percent of your estate's value
2 to 4 percent
You'll probably be able to save about 2 to 4 percent of your estate's value (not to mention a lot of time) if your case can avoid the probate process.
4 to 6 percent
6 to 8 percent
What's the name for the person in charge of a trust's assets?
The trustee is the one in charge of the assests. The grantor is the person who sets up the trust.
True or false: The gift tax is higher on estates willed to children than to grandchildren.
The gift tax is actually higher if you're leaving assets to grandchildren.
Willed assets that aren't put into trusts are subject to a federal gift tax. The gift tax can get as high as 46 percent on estates worth more than this amount.
If you're worth more than $4 million, a whopping 46 percent of that will go to Uncle Sam -- unless you take advantage of trusts and loopholes.
You can also minimize taxes on your estate by making gifts to your heirs while you're still alive. What are these gifts called?
"Inter vivos" means "among the living," so it refers to gifts passed between living people, as opposed to an inheritance.
What's the maximum inter vivos gift a person can give -- tax-free -- to another person each year?
One individual can give gifts totalling $12,000 per year to another individual. Double that for married couples.
What's a codicil?
a stipulation in a will that voids it in certain conditions
a written amendment to a will
A codicil is an amendment to a will -- it can be a tiny change or a major overhaul.
the introductory part of a will
Which of these items is NOT usually part of an estate plan?
If you have a prenuptial agreement, it would be taken into consideration when you die, but it's not included in the estate-planning process.
power of attorney assignment
health care proxy
Can you bequeath assets to a beneficiary on a condition -- say, that he or she quits smoking or graduates from college?
Yes, you can stipulate just about anything.
Which of these is NOT a type of will?
You thought it was holographic, didn't you? Nope, holographic wills are real. Self-fulfilling was the fake.
What is a holographic will?
a new type of will sealed in a hologram
an informal, handwritten will
It's nothing high-tech -- just a will written by the testator, often with no witnesses. They're valid in most states.
a will that's beamed onto a wall
True or false: All states prohibit spouses from being completely cut off in a will.
That is true. Unless you have a prenuptial agreement to the contrary, you can't totally cut off your spouse in your will.
What famous playwright included a contest in his will that called for his fortune to be given to the person who successfully created a new alphabet?
George Bernard Shaw
George Bernard Shaw came up with this crazy idea. An Englishman named Kingsley Read shared the prize money with four other contestants among 400 entries.