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Q:
If no children or grandchildren survive a decedent who dies without a will, a surviving spouse is entitled to the entire estate.
Q:
A will is probated in part to establish its validity.
Q:
A divorce necessarily revokes an entire will.
Q:
To "publish" a will means to release it to the media.
Q:
A nuncupative will is a will that is completely in the handwriting of the testator.
Q:
An "X" can qualify as a signature on a will.
Q:
A will must normally be attested to by two or three witnesses.
Q:
Undue influence can occur when a named beneficiary is in a position to influence the making of a will.
Q:
To execute a valid will, a testator must remember the "natural objects of his or her bounty."
Q:
In most states, a person must be sixteen years of age to execute a valid will.
Q:
A testator is a decedent who dies without a will.
Q:
An executor is a personal representative appointed by a court for a decedent who dies without a will.
Q:
If no heirs are found, the property of a decedent is transferred to a charitable organization.
Q:
An insured's lack of an insurable interest is an absolute defense against payment.
Q:
Because insurance law follows contract law, bad faith tort actions against insurers are not allowed.
Q:
In defense against payment, an insurance company can raise any of the defenses that would be valid in an ordinary action on a contract.
Q:
An insurer has a duty to avoid the payment of claims.
Q:
An applicant for insurance has a duty to disclose only material facts that the insurer asks for.
Q:
The words used in an insurance contract are interpreted against the party who applied for the policy.
Q:
A coinsurance clause provides that two or more people will be covered by the same life insurance policy.
Q:
State law may mandate that an incontestability clause be included in an insurance policy.
Q:
Insurance coverage is never effective until a formal written policy is issued.
Q:
If a life insurance applicant pays a premium but dies before the physical exam, there is obviously no coverage.
Q:
A loss sustained between the time of application and the delivery of an insurance policy may not be covered.
Q:
An insurance application is part of the insurance contract.
Q:
A party must own property to have an insurable interest in it.
Q:
A person can insure anything in which he or she has an insurable interest.
Q:
Insurance is classified according to the amount of the payment on a claim.
Q:
The consideration paid to an insurer to obtain an insurance policy is the premium.
Q:
A business firm may have an insurable interest in the life of any of its employees, except a key employee.
Q:
Liability insurance protects against liability imposed on the insured as a result of injuries to the person or property of another.
Q:
Dieter's will provides for a distribution of his assets on his death. Who will "distribute" Dieter's property, and what are the steps involved?
Q:
Patty, who is divorced, owns a house. She has no reasonable expectation of benefit from the life of Quinn, her ex-spouse, but she applies for insurance on his life anyway. She also obtains a fire insurance policy on the house, which she later sells. Five years later, Quinn dies and the house is destroyed in a fire. Can Patty obtain payment on either the death of Quinn or the loss of the house? Explain.
Q:
Mason creates a trust to prevent his son, Newt, the beneficiary, from assigning his rights to future payments of income from the trust. This is
A.a charitable trust.
B.a constructive trust.
C.a spendthrift trust.
D.an illegal trust.
Q:
Benny dies without a will, with no surviving spouse or child. Benny's survivors include his granddaughter Callie, his nephew Duncan, and his cousin Earl. In most states, his estate would pass to
A.Callie.
B.Duncan.
C.Earl.
D.the state.
Q:
Cliff dies without a will. His survivors include his spouse Dana and his two children, Efrem and Fay. Under applicable laws, Dana will probably receive
A.all of Cliff's estate.
B.none of Cliff's estate.
C.one-half of Cliff's estate.
D.one-third of Cliff's estate.
Q:
Orin creates a living trust to pass his assets, including stock in Petro Oil Company and other business investments, to his heirs. One advantage of this arrangement is that
A.income taxes do not have to be paid on trust earnings.
B.the assets are sheltered from the payment of estate taxes.
C.the assets can be transferred without going through probate.
D.the trust does not come into existence until the grantor's death.
Q:
Sherman dies without a will, survived by his granddaughter Roxy and Roxy's brother Pio. Roxy and Pio are Sherman's
A.collateral heirs.
B.settlors.
C.trustees.
D.lineal descendants.
Q:
Dyan executes her will to give "to my nephew Esau my stock in Fargo, Inc." Later, Dyan writes separately, with the same formalities required for a will, to leave the stock to her niece Ginny and cash to Esau. This writing
A.does not affect the will's gift of the stock to Esau.
B.requires a gift of the stock in equal shares to Esau and Ginny.
C.revokes the whole will, which must be redrafted.
D.revokes the will's gift of the stock to Esau.
Q:
Amelia executes a separate written instrument to amend her prior will. This separate document is
A.a codicil.
B.a holographic will.
C.a living will.
D.a nuncupative will.
Q:
Ratzo is asked to be a witness to Sade's will. Before attesting to the will,
A.Ratzo does not have to read the will or be informed of its contents.
B.Ratzo must read the will and recite its contents.
C.Sade must orally tell Ratzo of the will's contents.
D.Sade's attorney must read the will aloud to Ratzo.
Q:
Lani is asked to serve as a witness to Mona's will. To qualify, Lani must be
A.a collateral heir.
B.a lineal descendant.
C.eighteen years of age or older.
D.mentally competent.
Q:
Juli types onto a computer what she intends to be "My Will" and prints it out. Juli has capacity. "My Will" is
A.invalid.
B.valid if Juli signs it.
C.valid if Juli signs it and has three witnesses sign it.
D.valid if Juli signs it, has three witnesses sign it, and files it in a certain state office.
Q:
Lost in a canyon near Gila, Arizona, Hester writes her will in crayon, on a paper bag, while Ivan states orally how he wants his estate distributed. Most states do not permit
A.an olographic will.
B.a nuncupative will.
C.a will written on a paper bag.
D.a will written in crayon.
Q:
Eighty-year-old Clark exhibits confusion, forgetfulness, and disorientation. Dave, Clark's doctor, believes that the symptoms indicate dementia. Elsa, who has significant contact with Clark, believes that he is in a state of mental decline. These facts indicate
A.an urgency that Clark distribute his assets.
B.Clark's lack of capacity.
C.Dave's misdiagnosis.
D.Elsa's intent to take advantage of Clark.
Q:
Gigi, a twenty-year-old, wants to execute a will before she undertakes a mountain-climbing trip on a peak in the Himalaya Mountains. In most states, the legal age for executing a will is
A.sixteen years of age.
B.eighteen years of age.
C.twenty-one years of age.
D.twenty-five years of age.
Q:
The assets in Hong'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
A.full payment in order of seniority until the assets are exhausted.
B.nothing-the assets will descend to the state.
C.reduced benefits.
D.the option of distributing the assets according to their wishes.
Q:
According to the terms of Diego's will, specific gifts are made, and taxes and other estate expenses and debts are paid. The assets of Diego's estate that remain are most likely to be distributed
A.by codicil.
B.holographically.
C.per capita.
D.through a residuary clause.
Q:
Philomena dies without a will. A court appoints Quigley to handle the probate of Philomena's estate. The administrator of the estate is
A.Philomena's closest blood relative.
B.Philomena.
C.Quigley.
D.the court.
Q:
Skyler dies after having made a valid will. Skyler has died
A.in escheat.
B.in probate.
C.intestate.
D.testate.
Q:
Garth dies without a will. The distribution of Garth's property, including his eleven forested acres near Hope, Arkansas, is prescribed by
A.a court-appointed executor.
B.federal probate statutes.
C.state intestacy laws.
D.Garth's relatives.
Q:
Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance policy on Speedy's warehouse. On the application, Speedy misrepresents the age of the property to obtain a lower premium. When a fire soon destroys the warehouse, TransInsurance can
A.deny payment, because a fire destroyed Speedy's warehouse.
B.deny payment, because of Speedy's fraud in the application.
C.not deny payment, because a fire destroyed Speedy's warehouse.
D.not deny payment, because the application is not part of the policy.
Q:
Kelsy obtains a business liability insurance policy from Luminous Insurance Company for Kelsy's Framing & Art Supplies store. When an event occurs that gives rise to a claim, Luminous has a duty to
A.investigate to determine the facts.
B.file a suit against Kelsy so that a court can settle the claim.
C.find a third party on whom to impose liability.
D.refund any unearned amount of the premium.
Q:
Edy obtains a homeowners' insurance policy with First Source Insurance Company. First Source can cancel the policy
A.if Edy appears as a witness in a case against First Source.
B.if Edy fails to pay the premiums.
C.if Edy makes changes that add to the home's value.
D.under no circumstances.
Q:
Kerin obtains a property insurance policy for her art collection from Lawton Insurance Company. Kerin can cancel the policy
A.at any time.
B.only at the end of a period for which a premium has been paid.
C.only if Kerin no longer has an insurable interest in the property.
D.only on advance written notice.
Q:
Myles obtains a business liability insurance policy from Nova Insurance Company for Myles's Hydraulics & Transmission Repair shop. Nova can cancel the policy
A.if Myles increases the risk assumed by the Nova.
B.if Myles files a claim under the policy.
C.if Myles appears as a witness in a case brought against Nova.
D.under no circumstances.
Q:
Haya obtains an insurance policy from Inviolable Insurance Corporation (IIC). IIC may cancel, or refuse to renew, the policy because of
A.Haya's appearance as a witness against IIC.
B.Haya's gender.
C.Haya's national origin.
D.none of the choices.
Q:
Isabel obtains a fire insurance policy on her home from Justice Insurance Company. The home is lost in a fire, but the parties dispute the amount of Justice's liability under an ambiguous clause in the policy. A court would most likely
A.interpret the clause against Isabel.
B.interpret the clause against Justice.
C.rewrite the clause and apply it as rewritten.
D.strike the clause from the policy.
Q:
Ginny obtains a health-insurance policy for her family from Hope Insurance Company. The policy includes an incontestability clause. Under such a clause, after a policy has been in force for a specified period or time, such as two or three years
A.Ginny cannot contest Hope's insurable interest.
B.Ginny cannot contest Hope's refusal to pay a claim under the policy.
C.Hope cannot contest Ginny's eligibility for continued coverage.
D.Hope cannot contest Ginny's statements in the application.
Q:
Root & Branch Lumber Company obtains a fire insurance policy from Statistical Insurers, Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Root & Branch insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. Root & Branch can recover
A.$400,000.
B.$320,000.
C.$200,000.
D.$80,000.
Q:
Rolling Transport & Storage Corporation wants to insure its warehouse to obtain the maximum possible recovery for the lowest possible premium. To obtain the maximum recovery under a coinsurance clause, the percentage of the value of the property that should be insured is
A.80 percent.
B.90 percent.
C.100 percent.
D.120 percent.
Q:
Donald applies for a life insurance policy with Equity Insurance Company through Fletch, an agent who works for Equity. Donald pays the initial premium. Fletch writes a binder, which
A.acknowledges the application and promises to consider it.
B.attests to the truth of each statement in the application
C.evidences receipt of the payment of the initial premium.
D.indicates that a policy is pending and states its essential terms.
Q:
Feta is a partner in the game design firm GR8 Games, Inc., which obtains key-person life insurance on Feta in the amount of $1 million from Halo Insurance Company. Feta quits GR8 Games to join Icy Applications, Inc. Feta dies. Under the principle of insurable interest, Halo must pay the $1 million to
A.Feta's spouse Jo.
B.GR8 Games.
C.Icy Applications.
D.no one.
Q:
Reno is the beneficiary of a life insurance policy on Sula's life obtained from Thayer Insurance Company. The underwriter of this policy is
A.Reno.
B.Sula.
C.Thayer.
D.the agent or broker through whom the policy was obtained.
Q:
Grace applies for a homeowners' insurance policy on her house with Heroic Insurance Company through Ian, a broker. In this transaction, Ian is
A.an agent for both parties.
B.Grace's agent, and not Heroic's agent.
C.Heroic's agent, and not Grace's agent.
D.not an agent.
Q:
Doctors Medical Associates obtains an insurance policy that protects its members against negligence claims by their patients. This is
A.casualty insurance.
B.fidelity or guaranty insurance.
C.malpractice insurance.
D.workers' compensation insurance.
Q:
Shingle & Tile Roofing Contractor, LLC, obtains an insurance policy against liability for injuries or losses sustained by employees during the course of their employment. The policy covers claims not covered by workers' compensation insurance. This is
A.casualty insurance.
B.fidelity or guaranty insurance.
C.key-person life insurance.
D.employer's liability insurance.
Q:
Bret obtains a fire insurance policy on his rental house with Continental Insurance Company. Like all insurance, this policy is an arrangement for
A.avoiding the assumption of responsibility.
B.predicting a potential loss based on unknown factors.
C.shifting the imposition of liability.
D.transferring and allocating risk.
Q:
A constructive trust is "constructed" by a property owner to fulfill certain unique functions outside the usual bounds of a trust.
Q:
A spendthrift trust provides for a beneficiary's transfer of his or her right to future payments of trust funds.
Q:
An express trust is created or declared in explicit terms.
Q:
The trustee is the person for whose benefit a trust is held.
Q:
Andy leases to Burgertown Franchise Corporation a 10,000 square-foot building under a written lease with a twenty-year term, rent payable annually. The lease includes a clause stating that Burgertown is responsible for making all necessary repairs, including rebuilding the structure after its destruction by any cause beyond Andy's control. The lease does not include a clause concerning its assignment. One day after the tenth rental payment, Burgertown, without Andy's knowledge or consent, assigns its interest in the lease to Chicken Hut Restaurants, Inc. Meanwhile, Andy dies and Dotty inherits Andy's interest in the building. Without the knowledge or consent of either Burgertown or Chicken Hut, Dotty sells the building to Earnest Investments, Inc. The next month, the building is destroyed in the flood of a nearby river. Burgertown rebuilds it and files a suit against Earnest for the expense. Earnest responds that the lease has terminated. Is Earnest correct? If so, when did the lease terminate? If not, is Earnest liable for the cost of rebuilding the structure? Why or why not?
Q:
Jai owns an orchard behind Key's house and property. The only access to the orchard is Key's driveway, which Jai uses to get to her orchard. Jai sells the orchard to Laurentz. Can Laurentz use the right-of-way across Key's property?
Q:
Bren leases an apartment from Cris for one year. After two months, she sublets the premises for the next six months to Dee, without obtaining Cris's consent. Dee pays the rent for only four months. For the last two months of Dee's six-month term, Bren is
A.liable for the rent, because Dee defaulted.
B.liable for the rent, because the sublease lacked Cris's consent.
C.not liable for the rent, because Bren does not own the apartment.
D.not liable for the rent, because Bren sublet the premises to Dee.
Q:
Oak Grove Residences, Inc., owns apartment buildings. Pedro leases one of Oak Grove's apartments. Pedro's transfer of his interest in the lease to Quito for a period shorter than the lease term is
A.an assignment.
B.an eviction.
C.a right of entry.
D.a sublease.
Q:
Hobby Farms, Inc., owns rural property that it leases to various tenants, including Ira. Ira's transfer of his entire interest in the leased property to a Jason is
A.an assignment.
B.an eviction.
C.a right of entry.
D.a sublease.
Q:
Xavier owns a duplex that he leases to Yvon and Zack. Xavier may sell
A.the duplex at any time.
B.the duplex, but only after the lease expires and the tenants move out.
C.the duplex, but only with the tenants' permission.
D.the lease, but not the duplex.
Q:
NOW Shopping Mall Corporation leases space to Only U Stores and Pik-Ur-Choice, Inc. Later, Pik-Ur-Choice begins to sell items that are similar to Only U's goods, and Only U abandons its space before the end of the lease term. Only U is liable to
A.not NOW or its other tenants.
B.NOW and its other tenants, except Pik-Ur-Choice, for any effect on their business.
C.NOW and its other tenants, including Pik-Ur-Choice, for any effect on their business.
D.NOW only for the unpaid rent.
Q:
Rita believes that Shady Grove Apartments, Inc., her landlord, has violated the law in a way that entitles her to withhold the rent. This remedy is generally associated with
A.breach of the covenant of quiet enjoyment.
B.breach of the implied warranty of habitability.
C.discrimination.
D.failure to provide security against crimes in common areas.