Overview
Estate Planning is 10% of the CFP exam but has eleven Principal Knowledge Topics, G.54 to G.64, the most of any domain. The early topics cover how property passes: titling and beneficiary designations, lifetime and at-death transfer strategies, and the documents that handle death and incapacity. The tax topics cover gift, estate and generation-skipping transfer tax compliance and calculation, sources of liquidity to pay those taxes and other costs, the types and taxation of trusts, and the marital deduction.
The remaining topics are specialized: intra-family and business transfer techniques, postmortem elections, planning for divorce and unmarried couples, and planning for clients with special needs. Exemption amounts changed under 2025 legislation, so this guide describes how the rules work and leaves current dollar figures to CFP Board's testable-law guidance.
How it's tested
Estate questions often describe a family, a list of assets with titles and beneficiaries, and a goal. You decide how assets will pass, what is included in the gross estate, which document or trust achieves the goal, or which election to make after death. Separate probate questions from estate tax questions.
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How does it pass
Assets and their titling or beneficiary designations are listed and you determine who receives each asset and whether it goes through probate.
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Gross estate inclusion
A decedent's interests, gifts and policies are described and you decide which are included in the gross estate and at what value.
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Choose the trust or technique
A client's goal, such as control, tax reduction, creditor protection or support for a disabled child, is given and you select the trust or transfer method.
A widower owns a home jointly with his adult son as joint tenants with right of survivorship, and his will leaves everything equally to his three children. At his death the home passes to the son by operation of law, outside probate and outside the will. If he wanted all three to share it, the title, not the will, needed to change.
Topics 11
Official topics from the CFP Board outline, in outline order.
G.54 Property titling and beneficiary designationsForms of ownership and how designations override wills.
- What it means
- This topic covers how property is owned and how it passes: sole ownership, joint tenancy with right of survivorship, tenancy by the entirety, tenancy in common, community property, and contract-based transfers through beneficiary designations and payable-on-death or transfer-on-death registrations.
- What to understand
- Joint tenancy and tenancy by the entirety pass automatically to the survivor, outside probate. Tenancy in common interests pass through the owner's estate. In community property states, both halves of community property can receive a basis adjustment at the first spouse's death. Beneficiary designations on life insurance and retirement accounts control over the will. Naming the estate as beneficiary can push an asset into probate and hurt retirement account payout options.
- How it shows up
- Determine who inherits each asset and whether it passes through probate.
- Common confusion
- Thinking the will controls assets with a named beneficiary.
G.55 Strategies to transfer propertyLifetime gifts, sales, wills, trusts and other transfer methods.
- What it means
- This topic covers the ways property moves from one person to another: lifetime gifts, sales, will provisions, intestate succession, revocable and irrevocable trusts, and nonprobate transfers, along with the advantages and costs of each.
- What to understand
- Lifetime gifts remove future appreciation from the estate but give the donee carryover basis. Transfers at death can receive a basis adjustment. Probate is public, can be slow and costly, and is avoided by nonprobate titling, beneficiary designations and funded revocable trusts. Intestacy laws decide who inherits when there is no valid will, which may not match the client's wishes. Ancillary probate is needed for real property in other states unless it is held in a trust.
- How it shows up
- Choose the transfer method that best fits a client's goals for control, cost, privacy and tax.
- Common confusion
- Believing a revocable living trust reduces estate tax.
G.56 Estate and incapacity planning documentsWills, powers of attorney, health care directives and trusts.
- What it means
- This topic covers the documents that carry out an estate plan and protect a client who becomes incapacitated: wills, durable powers of attorney for property, health care powers of attorney, living wills and advance directives, HIPAA authorizations, and revocable living trusts.
- What to understand
- A will names an executor and guardians for minors and directs probate assets. A durable power of attorney remains valid after incapacity; a springing power takes effect only on incapacity. A health care power of attorney names someone to make medical decisions; a living will states end-of-life wishes. All powers of attorney end at death. Without these documents, a family may need court-supervised guardianship or conservatorship.
- How it shows up
- Identify the missing document that would have prevented a described problem.
- Common confusion
- Assuming a power of attorney lets an agent act after the principal's death.
G.57 Gift, estate, and GST tax compliance and calculationGross estate, deductions, unified credit, portability and filings.
- What it means
- This topic covers how transfer taxes are calculated and reported: taxable gifts and the annual exclusion, gift splitting, the gross estate, deductions, adjusted taxable gifts, the unified credit, portability of a deceased spouse's unused exclusion, the generation-skipping transfer tax, and Forms 709 and 706.
- What to understand
- The estate tax builds from the gross estate, minus debts, expenses, marital and charitable deductions, plus adjusted taxable gifts, then applies the rate schedule and credits. Life insurance owned by the decedent and gifts of policies within three years of death are included. Portability requires a timely estate tax return even when no tax is due. The GST tax applies to transfers to skip persons, such as grandchildren, beyond the GST exemption. Exclusion amounts are set by current law and indexed.
- How it shows up
- Compute or describe the steps of the estate tax calculation, or decide whether a filing is required.
- Common confusion
- Skipping the estate tax return for a first spouse and losing portability.
G.58 Sources for estate liquidityPaying taxes, debts and expenses without forced sales.
- What it means
- Estate liquidity is the cash an estate needs for funeral costs, debts, administration expenses and taxes. This topic covers how to estimate that need and the sources and techniques that provide cash, including life insurance, the sale or redemption of assets, and tax payment deferral.
- What to understand
- Illiquid estates, especially those holding a closely held business or real estate, risk forced sales at low prices. Life insurance held in an irrevocable life insurance trust provides cash outside the taxable estate. Section 6166 allows estate tax tied to a closely held business to be paid in installments when the business is a large enough share of the estate. Section 303 redemptions let corporations buy back shares to pay death costs with favorable tax treatment.
- How it shows up
- Identify the best liquidity source for an estate dominated by an illiquid asset.
- Common confusion
- Funding liquidity with insurance the decedent owned, which adds to the estate it is meant to pay.
G.59 Types, features, and taxation of trustsRevocable, irrevocable, grantor and specialized trusts.
- What it means
- This topic covers the trusts planners use: revocable living trusts, irrevocable trusts, grantor trusts, credit shelter and marital trusts, irrevocable life insurance trusts, grantor retained annuity trusts, qualified personal residence trusts, charitable remainder and lead trusts, and spendthrift provisions.
- What to understand
- Revocable trusts avoid probate but are included in the grantor's estate. Irrevocable trusts can remove assets from the estate if the grantor keeps no prohibited powers. Crummey withdrawal powers let gifts to a trust qualify for the annual exclusion. A GRAT returns an annuity to the grantor and passes growth above the IRS assumed rate to beneficiaries. A QPRT removes a residence at a discounted gift value if the grantor outlives the term. Spendthrift clauses protect beneficiaries' interests from creditors.
- How it shows up
- Pick a trust to meet a stated goal or determine whether trust assets are in the grantor's estate.
- Common confusion
- Treating any trust as removing assets from the estate.
G.60 Marital deductionUnlimited deduction for transfers to a spouse and how to qualify.
- What it means
- The marital deduction allows unlimited transfers to a U.S. citizen spouse free of gift and estate tax. This topic covers which transfers qualify, the terminable interest rule, QTIP and power of appointment trusts, the qualified domestic trust for non-citizen spouses, and how to balance the deduction with each spouse's exemption.
- What to understand
- Outright transfers to a citizen spouse qualify. A terminable interest that ends and passes to others generally does not, unless it is a QTIP trust, where the executor elects to qualify income-for-life interests and the first spouse chooses the remainder beneficiaries. A power of appointment trust gives the surviving spouse control of the remainder. A non-citizen spouse needs a QDOT for the deduction at death. Overusing the deduction can waste an exemption unless portability is elected.
- How it shows up
- Choose a trust that gets the deduction while controlling who receives assets after the survivor dies.
- Common confusion
- Assuming transfers to a non-citizen spouse qualify automatically.
G.61 Intra-family and other business transfer techniquesInstallment sales, SCINs, private annuities, family partnerships and loans.
- What it means
- This topic covers techniques for moving property, especially business interests, to family members: intra-family loans, installment sales, self-canceling installment notes, private annuities, family limited partnerships and LLCs, sales to intentionally defective grantor trusts, and recapitalizations.
- What to understand
- Intra-family loans must charge at least the applicable federal rate to avoid gift and income tax issues. A self-canceling installment note ends payments at the seller's death so the balance is excluded from the estate, but carries a premium. A private annuity pays the seller for life. Family limited partnerships can support valuation discounts for lack of control and marketability, though the IRS challenges abuse. A sale to a defective grantor trust freezes value with no gain recognized on the sale.
- How it shows up
- Choose the technique that freezes value or transfers a business to family on the client's terms.
- Common confusion
- Mixing up the self-canceling note, which pays for a fixed term, with the private annuity, which pays for life.
G.62 Postmortem estate planning techniquesDisclaimers, valuation elections and other after-death choices.
- What it means
- Postmortem planning covers decisions made after death that change the tax or distribution result: qualified disclaimers, the alternate valuation date, the QTIP election, the portability election, choosing the estate's tax year, and deferral of estate tax payments.
- What to understand
- A qualified disclaimer must be in writing and generally made within nine months, before the person accepts any benefit, and the property passes as if the disclaimant had died first. The alternate valuation date of six months after death can be used only if it lowers both the gross estate and the tax. QTIP and portability elections are made on the estate tax return. Disclaimers can redirect assets into a credit shelter trust.
- How it shows up
- Select the postmortem election that lowers tax or fixes a problem in the plan.
- Common confusion
- Thinking a disclaimant can choose who receives the disclaimed property.
G.63 Planning for divorce, unmarried couples and other special circumstancesUpdating plans for divorce and planning without marriage.
- What it means
- This topic covers estate planning when family structure differs from the traditional default: divorce and remarriage, blended families, unmarried partners, prenuptial and postnuptial agreements, and other circumstances such as nontraditional households.
- What to understand
- Divorce does not always update beneficiary designations, so they must be reviewed. Unmarried partners have no marital deduction and no intestate rights, so they need wills, beneficiary designations, titling and health care documents to protect each other. Transfers between unmarried partners can be taxable gifts. Blended families often use QTIP trusts to provide for a spouse while protecting children from an earlier marriage. Retirement plan assets divided in divorce require a QDRO.
- How it shows up
- Recommend the documents or structure that protects an unmarried partner or children from a prior marriage.
- Common confusion
- Assuming an unmarried partner inherits under intestacy.
G.64 Planning for special needs and circumstancesProviding for disabled beneficiaries and other special cases.
- What it means
- This topic covers estate plans for beneficiaries who need extra protection: special needs trusts that preserve eligibility for means-tested benefits, first-party and third-party trusts, guardianship planning, and plans for beneficiaries with substance abuse or spending problems.
- What to understand
- A third-party special needs trust, funded by parents or others, can supplement government benefits without a Medicaid payback. A first-party trust holding the disabled person's own assets must repay Medicaid at the beneficiary's death. Leaving assets outright to a disabled beneficiary can disqualify them from benefits. Letters of intent guide future caregivers. Discretionary and spendthrift provisions help with beneficiaries who cannot manage money.
- How it shows up
- Choose the trust type or bequest structure that protects a disabled child's benefits.
- Common confusion
- Expecting a third-party special needs trust to require Medicaid payback.
High-yield concepts
The terms, rules and formulas this domain turns into questions most often.
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Probate versus nonprobate
Court-supervised transfer versus transfer by title, contract or trust.
- Remember
- Avoiding probate does not avoid estate tax.
- Tested as
- How-it-passes questions.
- Trap
- Confusing the two.
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Joint tenancy with right of survivorship
Co-owners' shares pass automatically to survivors.
- Remember
- Overrides the will.
- Tested as
- Titling questions.
- Trap
- Expecting the will to divide the asset.
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Durable power of attorney
Agent authority that survives incapacity.
- Remember
- Ends at death.
- Tested as
- Incapacity planning.
- Trap
- Using it to manage estate assets after death.
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Gross estate
Everything the decedent owned or controlled at death, plus certain transfers.
- Remember
- Includes policies owned by the decedent and those gifted within three years.
- Tested as
- Estate tax calculation.
- Trap
- Excluding insurance because it avoids probate.
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Portability
Surviving spouse may use the deceased spouse's unused exclusion.
- Remember
- Requires a timely estate tax return.
- Tested as
- Married couple planning.
- Trap
- Not filing because no tax was due.
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Generation-skipping transfer tax
Extra tax on transfers to skip persons beyond the GST exemption.
- Remember
- Predeceased parent rule can move a grandchild up a generation.
- Tested as
- Gifts to grandchildren.
- Trap
- Forgetting the predeceased parent exception.
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ILIT with Crummey powers
Irrevocable trust owning life insurance with withdrawal rights.
- Remember
- Keeps proceeds out of the estate if set up properly.
- Tested as
- Liquidity and insurance cases.
- Trap
- Transferring an existing policy and dying within three years.
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QTIP trust
Trust paying all income to the surviving spouse with remainder chosen by the first spouse.
- Remember
- Requires an election; included in survivor's estate.
- Tested as
- Blended family planning.
- Trap
- Allowing distributions to others during the spouse's life.
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Qualified disclaimer
Refusal of an inheritance treated as if the disclaimant predeceased.
- Remember
- Written, within nine months, no benefits accepted.
- Tested as
- Postmortem planning.
- Trap
- Trying to direct who receives the property.
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Alternate valuation date
Valuing the estate six months after death.
- Remember
- Only if it lowers both gross estate and tax.
- Tested as
- Declining markets after death.
- Trap
- Using it just to raise basis.
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Self-canceling installment note
Note whose unpaid balance cancels at the seller's death.
- Remember
- Requires a risk premium.
- Tested as
- Business transfers.
- Trap
- Confusing it with a private annuity.
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Third-party special needs trust
Trust funded by others for a disabled beneficiary.
- Remember
- No Medicaid payback required.
- Tested as
- Special needs planning.
- Trap
- Leaving assets outright to the beneficiary.
Side by side
Concepts candidates mix up, compared on the point that decides the answer.
Forms of co-ownership
| Concept | Meaning | Key difference | Common trap |
|---|---|---|---|
| Joint tenancy with right of survivorship | Equal shares that pass to surviving owners. | Avoids probate; any owner can sever. | Assuming the will controls it. |
| Tenancy by the entirety | Spousal joint ownership in some states. | Cannot be severed by one spouse; may resist individual creditors. | Using it for non-spouses. |
| Tenancy in common | Separate, possibly unequal shares. | Each share passes through the owner's estate. | Expecting survivorship. |
| Community property | Marital property owned equally in certain states. | Both halves can get a basis adjustment at the first death. | Adjusting only the decedent's half. |
Intra-family sale techniques
| Concept | Meaning | Key difference | Common trap |
|---|---|---|---|
| Installment sale | Payments over time with interest. | Remaining balance is an estate asset. | Thinking the balance disappears at death. |
| Self-canceling installment note | Installment note that ends at the seller's death. | Fixed term with a premium. | Omitting the premium. |
| Private annuity | Lifetime payments in exchange for property. | Payments end at death; nothing left in the estate. | Expecting a fixed term. |
Exam traps
Each trap is an answer that looks right. Learn the clue that should change your mind.
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The will controls everything
- What candidates pick
- Assets pass equally under the will.
- Why it looks right
- The will states the client's wishes clearly.
- Why it's wrong
- Jointly titled assets and accounts with beneficiaries pass outside the will by law or contract.
Clue to watch for Asset titles or beneficiaries are listed.
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Revocable trust saves tax
- What candidates pick
- A revocable living trust to reduce estate tax.
- Why it looks right
- Trusts are associated with tax planning.
- Why it's wrong
- The grantor keeps control, so trust assets stay in the estate; the benefit is probate avoidance and incapacity management.
Clue to watch for The grantor can amend or revoke the trust.
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No tax, no return
- What candidates pick
- No estate tax return is needed for the first spouse to die.
- Why it looks right
- No tax is owed.
- Why it's wrong
- Filing is required to elect portability of the unused exclusion.
Clue to watch for The surviving spouse may have a larger estate later.
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Outright gift to a disabled child
- What candidates pick
- Leaving an equal share outright to every child.
- Why it looks right
- It seems fair to all children.
- Why it's wrong
- An outright inheritance can disqualify a disabled child from means-tested benefits; a third-party special needs trust avoids that.
Clue to watch for One child receives Medicaid or similar benefits.
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Directed disclaimer
- What candidates pick
- The heir disclaims in favor of a chosen sibling.
- Why it looks right
- It sounds like a flexible gift.
- Why it's wrong
- A qualified disclaimer cannot direct the property; it passes as if the disclaimant died first.
Clue to watch for The heir wants to pick the recipient.
Answer framework
Apply these steps to estate questions to separate transfer, tax and control issues.
- List each asset with its title and any beneficiary designation, and decide how it passes: by survivorship, contract, trust or probate.
- Determine what is in the gross estate, including policies the decedent owned, retained interests and certain gifts made within three years.
- Apply deductions, the marital and charitable deductions, adjusted taxable gifts and the available exclusion, including any ported amount.
- Match the client's goal to a tool: documents for incapacity, trusts for control or protection, transfer techniques for freezing value.
- After a death, consider disclaimers, valuation date, QTIP and portability elections, and liquidity needs before recommending a course of action.
Practice question
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Checklist
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Study strategy
Treat estate planning as two separate questions and keep them apart in your notes: how does property pass, and how is it taxed. Begin with titling, beneficiary designations and probate, practicing with asset lists until you can trace each asset to its recipient. Then learn the estate tax calculation as a sequence of steps, including what belongs in the gross estate and how adjusted taxable gifts, deductions and credits fit.
Next, build a trust table with each trust's purpose, who controls it, whether it is in the grantor's estate, and its income tax status. Add the transfer techniques and postmortem elections as their own lists. Because each of the eleven topics may carry only one or two questions, aim for broad coverage rather than deep detail. Use CFP Board's current resources for exemption figures, which changed under 2025 legislation, and focus your effort on mechanics that stay stable from year to year, such as inclusion rules and elections.
FAQ
How much of the CFP exam is Estate Planning?
Estate Planning is 10% of the exam, about 17 of the 170 questions, spread across eleven Principal Knowledge Topics, the largest topic count of any domain.
Do I need to know the current estate tax exemption?
Know how the exemption, portability and the calculation work. The amount was changed by 2025 legislation and is indexed, so check CFP Board's current resources for figures it expects.
Is state law tested?
General concepts such as community property, tenancy by the entirety and intestacy are tested, but not the specific rules of individual states.
Which trusts appear most often?
Revocable living trusts, ILITs, credit shelter and QTIP trusts, GRATs, QPRTs, charitable remainder trusts and special needs trusts are the most common.
How is estate planning different from estate tax planning?
Estate planning includes who receives property, how it passes, incapacity and family protection. Estate tax planning is the part that reduces transfer taxes.
Are postmortem techniques worth studying for so few questions?
Yes. Disclaimers, the alternate valuation date and the portability and QTIP elections have clear rules, making them reliable points.
Other Finance certifications
Where the same subject shows up in other exams. Cards marked "Same subject" open the matching domain.
Test your Domain 7 knowledge
Work a short estate quiz to check how well you trace assets, apply the estate tax steps and choose the right trust.