Quiz: Estate Planning | Learn

1. If you die without a will (intestate), your assets are distributed according to:

Your verbal wishes expressed to familyYour state's intestacy laws, which may not match your wishesWhatever your oldest child decidesFederal estate guidelines

Without a valid will, state intestacy statutes dictate who inherits your assets, typically spouse and children in specified proportions. These default rules may not align with your actual wishes, and unmarried partners or friends receive nothing.

2. A durable power of attorney is important because it:

Replaces the need for a willAllows a designated person to manage your financial affairs if you become incapacitatedTransfers property ownership immediatelyOnly applies after death

A durable power of attorney remains effective if you become mentally incapacitated (unlike a regular POA which terminates at incapacity). Without one, your family may need court-appointed guardianship to manage your affairs, which is expensive and time-consuming.

3. Beneficiary designations on retirement accounts and life insurance:

Are overridden by whatever your will saysSupersede your will and transfer directly to the named beneficiary outside of probateAre only suggestions for the probate courtExpire after 5 years and must be renewed

Beneficiary designations are contract-level directives that override your will. If your will leaves everything to your spouse but your IRA beneficiary is still an ex-spouse, the ex-spouse gets the IRA. These designations must be reviewed and updated after major life events.

4. A healthcare directive (living will) specifies:

Who inherits your propertyYour medical treatment preferences if you cannot communicate them yourselfWhich doctor must treat youHow much to spend on healthcare annually

A healthcare directive documents your wishes regarding life-sustaining treatment, organ donation, and other medical decisions for situations where you cannot speak for yourself. Without one, family members may disagree or a court may decide for you.

Back to lesson Next lesson →