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Exam 36: Insurance, Wills, and Trusts

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Question 41

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Adam has two children, Bob (the eldest) and Carol, both of whom predecease Adam. Bob is survived by a daughter, Dina, and Carol by two sons, Ed and Fred. On Adam's death, if the estate is distributed per stirpes​

A) ​Dina will receive the entire estate.
B) ​Dina will receive one-half of the estate, and Ed and Fred will each receive one-fourth.
C) ​each grandchild will receive one-third of the estate.
D) ​the grandchildren will not receive anything.

E) All of the above
F) A) and B)

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Question 42

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There is little state regulation of the insurance industry.

A) True
B) False

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Question 43

Multiple Choice

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Shea makes a will. As a person who makes a will, Shea is

The assets in Doug's estate, including the value of his home on Elm Street and its contents, are insufficient to pay in full all of the gifts provided for in his will. His heirs will receive​

Risk management is the transfer of certain risks from an individual to an insurance company.

A valid will is one that represents the maker's intention to transfer and distribute his or her property.

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?​

Trial Lawyers, P.A., obtains an insurance policy that protects its members against negligence claims by their clients. This is​

An incontestability clause prohibits an insurer from contesting statements made in an insurance application until a specified time has elapsed.

Energy Industries, Inc., obtains insurance policies with Fidelity Insurance, Inc., and Good worth Insurance Company against the risk of loss of Energy's property. Each policy includes a multiple insurance clause. A fire partially destroys one of Energy's buildings. Energy can collect from Fidelity​

When there is an ambiguity in an insurance policy, the provision generally is interpreted against the insurance company.

Alain and Bette are partners who own and operate Cakes n' Pies, a chain of dessert restaurants. Their partnership obtains insurance on Alain and Bette's lives. This is