Chartered Financial Consultant (ChFC) Estate Planning Syllabus

Estate Planning syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Estate Planning in Chartered Financial Consultant (ChFC), not a summary of it.

1. 1

   Estate Planning Foundations

   4 topics

   • The Estate Planning Process and Goals
   • Property Ownership and Titling
     • Sole ownership, joint tenancy, and tenancy in common
     • Community property considerations
   • Probate Process and Avoidance
   • Estate Planning Documents
     • Wills and codicils
     • Powers of attorney and advance directives
2. 2

   Trusts and Wealth Transfer Tools

   4 topics

   • Trust Fundamentals
     • Revocable vs. irrevocable trusts
     • Grantor, trustee, and beneficiary roles
   • Common Trust Types
     • Bypass and marital (QTIP) trusts
     • Irrevocable life insurance trusts (ILITs)
     • Charitable remainder and lead trusts
   • Lifetime Gifting Strategies
     • Annual exclusion gifts
     • 529 plans and education gifting
   • Other Transfer Techniques
     • GRATs and family limited partnerships
3. 3

   Transfer Taxation

   4 topics

   • Federal Gift Tax
     • Annual exclusion and applicable credit
     • Gift splitting
   • Federal Estate Tax
     • Gross estate inclusion
     • Deductions and the marital deduction
     • Portability of the exclusion
   • Generation-Skipping Transfer Tax
   • Valuation of Estate Assets
     • Alternate valuation date and special-use valuation
     • Valuation discounts
4. 4

   Advanced Estate Planning Applications

   4 topics

   • Business Succession Planning
     • Buy-sell agreements
     • Entity vs. cross-purchase arrangements
   • Charitable Estate Planning
   • Planning for Incapacity and Special Needs
     • Special needs trusts
   • Postmortem Estate Planning Techniques
     • Disclaimers and elections

Estate Planning flashcards for Chartered Financial Consultant (ChFC)

19 of 53 cards from the Estate Planning deck — real questions with worked answers.

1. What are the two primary objectives of the estate planning process?

   To arrange for the orderly transfer of a person's assets to chosen beneficiaries at death (and during life), and to do so while minimizing transfer taxes, settlement costs, and delays — all consistent with the client's personal goals.

2. List the basic steps in the estate planning process.

   1) Establish the client/planner relationship; 2) Gather data and define goals; 3) Analyze the current situation; 4) Develop and present recommendations; 5) Implement the plan; 6) Monitor and update the plan periodically.

3. Distinguish the gross estate, the probate estate, and the taxable estate.

   Gross estate = all property the decedent owned or controlled for federal estate tax purposes. Probate estate = only assets passing under the will or intestacy (assets titled solely in the decedent's name with no beneficiary/survivorship). Taxable estate = gross estate minus deductions (debts, expenses, marital, charitable).

4. What is fee simple ownership?

   Complete, sole individual ownership of property; the owner has full rights to use, transfer, and dispose of it by will, and it passes through probate at death.

5. How does Joint Tenancy with Right of Survivorship (JTWROS) transfer at death?

   The decedent's interest passes automatically by operation of law to the surviving joint tenant(s), bypassing probate and overriding the will.

6. What is Tenancy by the Entirety and who may hold it?

   A form of joint ownership with right of survivorship available only to married couples; neither spouse can unilaterally transfer or encumber the property, and it offers creditor protection in many states.

7. How does Tenancy in Common differ from joint tenancy at death?

   In tenancy in common each owner holds a separate, undivided fractional interest with no survivorship; the decedent's share passes through their probate estate (by will or intestacy), not to the co-owners.

8. In a community property state, what portion of community property receives a stepped-up basis at the first spouse's death?

   Both halves (100%) of the community property receive a new basis equal to fair market value at the first spouse's death — a 'double step-up' unavailable to common-law jointly held property.

9. For estate inclusion of JTWROS between non-spouses, what is the 'consideration furnished' rule?

   The full value is included in the deceased joint tenant's gross estate except to the extent the survivor can prove they contributed consideration toward the property's acquisition.

10. What fraction of qualified joint interests (spousal JTWROS/tenancy by entirety) is included in the first spouse's gross estate?

    Exactly one-half ($\frac{1}{2}$), regardless of which spouse furnished the consideration.

11. What is probate and what are its main disadvantages?

    Probate is the court-supervised process of validating a will, paying debts/taxes, and distributing assets. Disadvantages: cost (court/executor/attorney fees), delay, and loss of privacy (it is a public proceeding).

12. Name common will substitutes used to avoid probate.

    Revocable living trusts, JTWROS/tenancy by the entirety, payable-on-death (POD) and transfer-on-death (TOD) accounts, and assets with beneficiary designations (life insurance, retirement accounts).

13. What does it mean to die 'intestate' and what governs distribution?

    Dying without a valid will; the decedent's probate assets are distributed according to the state's intestacy statutes (default heirship rules), not the decedent's wishes.

14. What is ancillary probate?

    A separate, additional probate proceeding required in another state where the decedent owned real property, adding cost and complexity — often avoided by holding out-of-state realty in a trust or LLC.

15. What is the function of a durable power of attorney for property?

    It authorizes an agent (attorney-in-fact) to manage the principal's financial/property affairs, and 'durable' means the authority survives the principal's incapacity.

16. What is a 'pour-over' will?

    A will used with a revocable living trust that directs any probate assets not already titled in the trust to 'pour over' into the trust at death, ensuring they are administered under the trust terms.

17. What is an advance medical directive (living will)?

    A legal document expressing a person's wishes regarding life-sustaining medical treatment if they become terminally ill or permanently unconscious and cannot communicate.

18. Identify the three parties to a trust.

    The grantor (settlor/trustor) who creates and funds it, the trustee who holds legal title and manages the property, and the beneficiary who holds equitable/beneficial title and receives benefits.

19. What is the difference between legal title and equitable title in a trust?

    The trustee holds legal title (control and management authority), while the beneficiary holds equitable (beneficial) title (the right to enjoy the property's benefits).

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