Module 6: Estate Planning
What Module 6 tests
Module 6 covers estate transfer: wills, intestacy, probate, trusts, beneficiary designations, gifts, powers of attorney, estate liquidity, and estate taxes. It tests how assets pass and who controls them.
Core rules
- Probate estate includes assets owned solely in the deceased's name, minus debts. Joint property, beneficiary-designated accounts, and trust assets generally pass outside probate.
- A will directs probate assets and guardianship but does not override beneficiary designations or joint ownership.
- Trusts can provide control, privacy, creditor protection, and management, but only if funded and properly drafted.
- Estate liquidity covers taxes, debts, and expenses without forced asset sales. Review titling and beneficiaries after life events.
Worked example
A client dies with a $600,000 house in sole name, $200,000 in a payable-on-death account naming a child, and $100,000 of debts. The probate estate is the $600,000 house minus $100,000 debts = $500,000; the POD account passes by contract. If the will leaves everything to a surviving spouse but the POD names a child, the account still goes to the child. The planner should confirm the client's intent and update designations.
Traps
Assuming a will controls all assets; ignoring beneficiary forms; using joint tenancy only for convenience; creating an unfunded trust; forgetting incapacity planning; overlooking estate liquidity and business succession.