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American College HS-330 Exam
HS-330 Fundamentals of Estate Planning Test (Page 8 )

Updated On: 7-Feb-2026
Page 8 of 81
PDF with 400 Questions

Which of the following statements concerning a power of appointment is (are) correct?

1. A power of appointment can be designed to restrict the donee's right to appoint the property in favor of a specific class of recipients.
2. A power of appointment can be designed to restrict the time period during which the donee may exercise the power.

  1. Neither 1 nor 2
  2. 2 only
  3. Both 1 and 2
  4. 1 only

Answer(s): C



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?

  1. Designate his wife as beneficiary and she will establish a testamentary trust in her will to receive the proceeds at her subsequent death
  2. Assign the policy to an irrevocable intervivos trust with five and five powers and designate the trustee to receive the death proceeds
  3. Establish a revocable intervivos trust and designate the trustee to receive death proceeds
  4. Assign the policy to his wife who will establish a revocable intervivos trust to receive the death proceeds

Answer(s): B



All the following statements concerning an estate for a term of years are correct EXCEPT:

  1. An interest may extend beyond the lifetime of the grantor.
  2. The tenant may transfer the property at the end of the term of his interest.
  3. It is an interest in property established for a specific duration.
  4. The tenant has the right to possess the property during the term of his interest.

Answer(s): B



Which of the following statements concerning pooled-income funds is (are) correct?
1. A pooled income fund is similar to a mutual fund maintained by a qualified charity.
2. It is an irrevocable arrangement in which the remainder interest passes to charity.

  1. Neither 1 nor 2
  2. Both 1 and 2
  3. 1 only
  4. 2 only

Answer(s): B



A father deeded a house as a gift to his daughter in 1990 but retained the right to live in it until his death. He died this year while still living in the house. The following are relevant facts:

The father bought the property in 1980 for $130,000. The fair market value of the property when the gift was made in 1990 was $150,000. The father filed a timely gift tax return but paid no gift tax because of the applicable credit amount. The fair market value of the property at the father's death was $220,000. The daughter sold the property 3 months after her father's death for $220,000. She had a gain of?

  1. $140,000
  2. $220,000
  3. $120,000
  4. 0

Answer(s): D



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