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Exam 43: Insurance, Wills, and Trusts

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Question 1

True/False

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A trust must be express because the essential elements of a trust include a writing.

A) True
B) False

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Question 2

Multiple Choice

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Neon Signs LLC wants to insure the equipment and supplies that it uses to create its products. To obtain insurance, Neon must have an insurable interest in the property

A) at the time a premium is paid.
B) at the time a loss occurs.
C) at the time a policy is obtained.
D) continuously from the time a policy is obtained to the time a loss occurs.

E) None of the above
F) A) and D)

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Question 3

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Life insurance requires that an insurable interest in the continued life of the insured exist when a policy is obtained.

An insurance company can raise as a defense against payment on a policy any of the defenses that would be valid in an ordinary action on a contract.

Faye executes a will in which Gail is appointed to administer the will. After Faye dies, Gail lacks the capacity to serve, and a court appoints Hedy to handle the probate of Faye's estate. In this situation, the administrator is

The laws governing how property is transferred on the death of its owner are a corollary to the concept of the private ownership of property.

Serena decides to create a trust for the benefit of her children. She deeds her property to the trust but retains the power to amend, alter, or revoke the trust. She also serves as the trustee and receives income earned by the property. This is

Insurance is a contract in which the insurer promises to reimburse the insured or a beneficiary in the event of a loss.

For a will to be valid, the testator's signature must appear on it, generally at the end.

Because an insurance agent is an agent of an applicant for insurance, not the insurance company, the agent owes fiduciary duties to the applicant.

Anne obtains a liability insurance policy for her Bagels & Coffee Shop from Choice Insurance Company. In their dealings, the parties must

According to the terms of Kim's will, specific gifts are made, and taxes and other estate debts are paid. The assets of the estate that remain are most likely to be distributed through

The conduct of Edie and Floyd indicate an intention to create a trust. The circumstances raise an inference that Edie is holding legal title to property for Floyd's benefit. This is

Grover does not execute a will before he dies. His survivors include his spouse Helene and their two children, Irene and John. With respect to Grover's estate, under intestacy laws, Helene will probably receive

Mace is asked to serve as a witness to Niles's will. To qualify, Mace must be

Once an insurer has accepted a risk, and an event occurs that gives rise to a claim, the insurer has a duty to investigate to determine the facts.

One way to transfer property outside the probate process, and thereby avoid the costs, is to own property in joint tenancy.

Patty executes a will, leaving her estate to her spouse Quentin. They have a daughter Rita. Later, Patty and Quentin divorce. Patty does not execute a new will before she dies. With respect to Patty's estate, Quentin is entitled to

In her will, Delia makes a gift of $10,000 to Esteban. This is

Aron owns a certificate of deposit with Beth, his sister, and an apartment building with Carl, his brother, in both cases as a joint tenant. Aron, a partner with Debra in Aron & Debra Accountants, obtains a life insurance policy with Debra as the designated beneficiary. Aron writes a will that gives particular items of personal property, as well as specific amounts of cash, to his children and his friends. The will leaves the residue of the estate to Eve, Aaron's favorite cousin. Carl dies. Aron, on his deathbed, makes a gift to the United Way. Will the certificate of deposit, the apartment building, the proceeds from the life insurance policy, and the gift to the United Way become part of Aron's estate and be distributed under the will? If not, how will these items be distributed and to whom?