Answers to Multiple Choice

Joint tenancy with rights of survivorship. . Tenancy by the entirety. The correct answer is c. When one owner dies owning property held as a joint romance with the right of survivorship, his interest is transferred to the other remaining property owners. In this case, pajamas and Kevin own property STARTS. Kevin will inherit James’ interest in the property if James dies first. When property is owned STARTS, the property does not pass through probate and the transfer is automatic at death. Kevin and James cannot own property via community property or tenancy by the entirety as they are not a married couple.

Tenancy in com mono does not have an automatic survivorship feature and would nor accomplish James’ and Seven’s goals. 2. Jim has bee married to Rebel:a for six yurts. They arc about to buy their first home and have come to you with some questions that they have regaling tiding of the home. In your explanation of the dilettante property ownership arrangements, which of the following tiding structures can only b. Entered into by spouses a. Tenancy by the entirety. B. Tenancy in common. E:. Joint tenancy with rights of survivorship. D. Fee simple. The correct answer is a.

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Of the property ownerships listed, tenancy by the entirety is the only one limited o married couples. 3. Which of the following statements regarding joint tenancy with rights phosphorous is correct:TTL a. Each tenant may bequeath their interest in the property at their death. B. Joint tenancy with rights of survivorship i. The same all community property. C. Only spouses can establish joint tenancies. D. Each tenant under II joint tenancy with rights of survivorship hall an undivided interest in the property. The Cotter answer is d. Only answer d is a Correct statement.

Answer a is incorrect because a joint tenant in a STARTS can transfer his interest during life, but at death the interest s automatically transferred to the surviving tenants. Answer b is incorrect because STARTS is not the same as community property. Community property can only be entered into between married couples and does not provide an automatic right of survivorship, Answer c is Multiple,Chloe PROBLEMS 25 incorrect became- anyone can own property STARTS. And at the death of one joint tenant. His interest will transfer automatically to the surviving joint tenants. . Which of the following statements regarding joint tenancy with rightly of survivorship IL not correct? At the death of a joint tenant, his interest in the property will transfer to the inefficacy listed in his will. B. Property owned ,STARTS transfers by operation of law. C. Each tallest owns the same fractional share in the property. D. During his life, each joint tenant has the right to – hill interest in the property without consent. Answer a is the only incorrect statement because the properly will pass ro the surviving tenants by operation of law. Thou regard to any provisions contained in a will. 5. Which of the following statements regarding community property IL not correct? If one spouse inherits property during the marriage, that property is generally not considered community property. B. Assets lardier by either spouse before marriage generally become community property upon their marriage. Co Community property assets are included in probate. D. If one spouse utility:rest his paycheck from work performed during the marriage to Burch.. В« property. The property is community property. The correct answer is b.

Answer b is the only incorrect statement because assets acquired before marriage remain separate properly. 6. Of the following types of owner. Hip, which is available for married couplets . Tenancy by the entirety. 2. Tenancy in common. 3. STARTS. Tenants by marriage. 4. 1 only. B. 1 and 3. C:. 1. , and 3. D. 1, 2, 3, and 4. Of the properly types listed, tenancy by the entirety is an nonwhites form exclusive to married couples. Ten ants in common and STARTS are available to anyone. Including married couples. Tenants by marriage is not a form of property ownership. 6 CHATTER 3: 1 ‘fees OF PROPERTY INTERESTS 7. At the death of either partner, a same-sex couple would like to ensure that all property, reinsurance policies, and retirement plans transfer to the surviving partner. Which of the following will NOT accomplish the couple’s goal! A. Each partner is listed as the beneficiary of the other partner’s life insurance logic. B. Each partner is listed as the beneficiary of the other partner’s qualified pension plan. C. Each partner i. A joint tenant in all of the couple’s property owned joint tenancy with rights of d. State intestacy laws.

The correct answer is d. State intestacy laws usually do not provide for asset transfers ro non-related parries, including rhea surviving partner in a same-sex couple. The designated beneficiary of a elite insurance policy will receive the proceeds of the life insurance policy by state contract law. The designated beneficiary of a qualified pension plan will also receive the assets by state contract law. A joint tenant of properly had ]TAROS will also receive the decedent joint tenant’s interest per the crate contract law, 8, Kim and Tommy ha”” lived In Tirana since their marriage.

Kim receive””d an inheritance from her father during their marriage. Kim and Tommy are moving to Massachusetts for a new job and have some questions regarding their MO”” TN a common law (separate property) state from a community property state. Which of the following statements is correct? A. When a couple moves from a community-property state too common law (separate property) state, separate property will generally remain separate repertory. B. When a couple moves from a common law (separate property) state to a community property state, separate property will generally become community property. . Community property probate at the death of the first spoke and automatically passes to the surviving spoke by operation of law. D. To get the step-to fair market value in basis at the death of the first spoke, a couple who lives in a common law (separate property) state can elect to treat their separate property as community property. Answer a is the only Correct statement, When a couple moves from a community repertory scare to a common law (separate properly) stare. Separate property will generally remain separate property.

Answer b is incorrect because separate properly does nor generally become community properly when a married couple moves from a common law scare ro a community property State. Answer c is incorrect because community properly may be disposed of by will and does not aromatically pass to the surviving spouse by operation of law. Finally. Answer disc incorrect because couples living in common law states cannot elect community property treatment at the dear of the first spouse in order to get a rep-up in basis, MULTIPLE-C-ICE PROBLEMS 27 9.

Dan huh owned 100% of the stock of DAML Baked Goods, a corporation, for 22 In the current year, she gifted 50% of the blains to her daughter, Sheila, who lives in California. Sheila does not work at the business and reinvests any income back in the company. With respect to the transfer of the bowlines interest, which of the following, statements is correct:t? A. Sheila”. 50% interest in Data’. Baked Goods is community property, owned equally by Sheila and her husband. B. If Sheila’s Havana dies tomorrow, both hi. Share of Dare’s Baked Goods and

Sheila’s share of Dam’s Baked Goods would receive a step-to fair market value in basis e. Sheila owns 50% of Data’s Baked Good. Outright, and the interest will not be considered community property. D. If Sheila dies tomorrow, the executor of her estate would include 25% of the value of Data’s Baked Goods in her ;Ross estate. Answer c is correct because gifted property is generally considered separate property. Answer a is incorrect because gifted property is generally considered separate property unless Shell. Elected to treat the property as community property, or commingled the assets. In this case, Shell. .. Not commingle the assets and the problem does not mention that she elected community property status over the assets. Answer b is incorrect because Sheila’s interest in Oar’s Baked Goods will not be included in her husband’s gross estate. Separate property is only included in the gross estate of the separate property owner. Because the interest is not in her husband’s gross estate, it does not receive a step-to fair market value. Answer d is incorrect because if Sheila dies tomorrow she must include 100% of the value of all forefathers owned as separate property (thus 50% of Oar’s Baked Goods). . Alfalfa died with the following property interests, which would not be included in her probate estate? A. Community property. B. Property held tenants in common. C. Property held as tenant by the entirety. D. Property owned fee simple. All except option c ate included in a decedent’s probate estate. Property held as tenants by the entirety is not included in the decedent’s probate .. Tare as it transfers by law, rather than by will_ 11. Which of the following statements repining joint tenancy is correct? A. Joint tenancies may only be established between spouses. B.

Tenancy by he entirety Is a special form of joint tenancy only available to residents of Louisiana. E. Joint tenancies can only be severed with the permission of a court. D. Each joint tenant in a joint tenancy has an undivided. Equal interest in the property. Each joint tenant in a joint tenancy owns an equal, undivided immerse! In the property. Answer a is false because joint tenancies can be established by any persons, related or unrelated. Answer b is false because ten Nancy by the emits is available in other states. Answer c is pulse because join tenancies can be partitioned at request of one joint tenant.

AU of the other statement, are true. 16. Eric has come to you for estate planning advice. She has been in a long- term relationship with Judy. Because Erica’s family is not aware of the relationship between Judy and Eric, Eric is concerned that at her death, Indy will be overlooked by Decade family. Of the following recommendations, which would you least likely recommend to fulfill Decade’. Goal of transferring .. Sets to Judy at Eric’, death! A. Transfer the ownership of Erica’s real estate investments into Tenancy by the Entirety. B. Name Judy as the beneficiary of Eric’, retirement plan. C.

Advise Eric against creating a will, specifically bequeathing her property to Judy. D. Name Judy the beneficiary of Erica’s life insurance policy. The correct answer IS a. As Erica’s financial planner. You would not advise her to transfer the ownership of her property ro a tenancy by the entirety it is an ownership option only available to married individuals-You would advise Eric ro name Judy as the beneficiary of her retirement plans and life insurance policies as the beneficiary designation would ensure payment of the proceeds to Judy without the delay approbate and challenges to the will.

Advising Eric ro create a will and specifically bequeath assets to Judy would fulfill Erica’s goal of transferring her assets ro Judy. But it also allows for Erica’s family to challenge the will. A challenge ro the will may create delays, increase the costs of estate administration. And potentially could cause the assets to be distributed to someone other than Judy. 17. Three years ago, brothers Darrel and Andy, purchased real property and tided it as joint tenancy with right of survivorship. At the time of the purchase, Darrel did not have any cash, so Andy paid the $50,000 purchase price himself.