Which of the Following Situations Calls Especially for an Estate

question 24

Multiple Choice

Which of the following situations calls especially for an estate plan based on the people planning perspective?

• A) Working couple with handicapped child
• B) Married man with no dependents
• C) Single person,no dependents,some property
• D) Single person,no property
• E) Mother and daughter,independent,ages 65 and 43,share housing

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Definitions:

Interest Tax Shield

A reduction in taxable income that results from deducting interest payments, decreasing overall tax liability.

Debt-Equity Ratio

A financial indicator showing the relationship between borrowed funds and equity in a company's asset financing.

Taxable Income

The portion of an individual's or company's income used to determine how much tax will be owed to the government.

Interest Tax Shield

The reduction in income taxes that results from taking an allowable deduction for interest expenses.