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1.
Which of the following may be excluded from financial means testing?
Both life insurance cash values and supplemental needs trusts. Assets held in certain trusts or in life insurance cash values are usually excluded from means testing.
2.
By setting up a custodial investment account for your child, you can shelter a certain amount of its income from taxes.
True. The IRS allows you to shelter some of the income from taxes.
3.
After your baby is born, it is okay to stop contributing to your retirement plan.
False. These are prime years, and if you cease contributing, you will lose growth in your retirement plan. Also, you can't necessarily count on your children helping you out when you are old.
4.
You can select a person to act as guardian for your child after your death in your _______.
Will. Guardians for children are named in the parents' wills.
5.
There are tax breaks available to parents with dependent children.
True. The IRS cuts you several nice breaks every year.