A finished FIN-440 Topic 7 death sequence stress test example, running one plan through three orders of death, finding grandchildren cut out and rerunning a repaired version. Searches like "fin 440 topic 7 assignment example", "fin440 topic 7 sample" and "fin-440 topic 7 example" land here.
What a finished FIN-440 Topic 7 death sequence stress test looks like
The parents, 74 and 72, hold an illustrative 2,000,000: a jointly owned 700,000 home, a 500,000 investment account and an 800,000 IRA naming the spouse and then the children equally. Both wills leave everything to the children who survive them. In the expected order, parents first, the son and daughter take 1,000,000 each. If the son dies first, his share may pass to his sister, depending on how state law reads the wills' survivorship wording, and the IRA's contingent line, with no per stirpes election, may pay her the whole account. His children, 8 and 11, could receive nothing. If both parents die in one accident, state simultaneous death rules settle who survived whom. The revised plan adds per stirpes language, a trust for grandchildren and a survival clause, and the failing sequence is run again.
How a FIN-440 Topic 7 example is structured
One plan, three sequences and a repair make up the test. The case section lays out the composite family, the dispositive wording of each will and every asset's titling and named beneficiary. A method paragraph explains why the plan faces orders of death the parents consider unlikely: documents drafted for the expected order are silent on the others. The first sequence confirms the plan works when the parents die first. The second, the son's death before his parents, traces each asset separately, since the wills, the joint home and the IRA form each follow their own rule. The third takes a shared accident and then a second death three weeks after the first, showing the double administration a survival clause avoids. A results table compares what the grandchildren receive under each sequence. The repair section rewrites the dispositive language and the IRA contingent line, then reruns the second sequence.
Three sequences, one set of documents
The same wills, titling and IRA form face the expected order, a child's early death and a shared accident, so every difference comes from sequence alone.
Each asset traced by its own rule
The wills, the survivorship titling on the home and the IRA's contingent line each decide separately, and the test follows them one at a time.
Survivorship wording meets state law
Whether the son's share lapses to his sister or reaches his children can turn on how the state's anti-lapse statute treats the wills' survivorship language.
Grandchildren who are still minors
Even a share that reaches the son's children arrives while they are 8 and 11, so the repair routes it into a trust with a stated distribution age.
Two deaths three weeks apart
Without a survival clause, property can pass through the first parent's estate into the second's and be administered twice within a single season.
The repair rerun against the hard case
With per stirpes wording and a new IRA contingent line, the son's early death sends 1,000,000 to a trust for his two children instead of to his sister.
Where marks go in FIN-440 Topic 7
Testing a plan only in the order the parents expect is the most frequent reason marks disappear, because the documents were written for that order and it tells the reader least. Papers that trace the wills and ignore the IRA form miss that 800,000 of this estate follows a contingent line the wills cannot touch. Stating one anti-lapse rule as national law misstates it, since states differ on whether survivorship wording defeats the statute. Letting a share reach minors outright puts it under court supervision or into a custodial account that ends when state law says, not when the parents would choose. A simultaneous death discussion that stops at the accident, with no second death weeks later, omits the case a survival clause exists to handle. Repairs proposed but never rerun against the failing sequence leave the fix unproven.
Get a FIN-440 Topic 7 example written to your instructions
Send the FIN-440 Topic 7 instructions and your classroom rubric, with the family and document facts your section supplies. We write a custom example to them, with the plan run through several orders of death, each asset traced by its own rule, state-law variation labeled and the repaired plan tested against the sequence that failed, in 24 to 48 hours. The first one is free.
FIN-440 Topic 7 questions, answered
What does per stirpes mean in a beneficiary designation?
It directs that if a named beneficiary dies first, that person's share passes down to his or her descendants rather than to the other named beneficiaries. Without it, many forms and some default rules divide the account among the survivors only. In the example, adding it to the IRA's contingent line keeps the son's half with his children. Forms and plan rules differ, so the wording on the actual form controls.
What happens when two spouses die at nearly the same time?
Many states have adopted rules requiring a beneficiary to survive the decedent by a short period, often 120 hours, to be treated as surviving, and wills commonly set a longer survival period. Without such a rule, property could pass from one spouse's estate into the other's for a matter of hours or days and then be administered again. Details vary by state, which is why the test labels its assumption.
Can the stress test show whether my parents' plan handles this?
Not for a real family. The ages, assets, wording and state-law assumptions are composites, chosen so each sequence produces a different result. How actual documents behave depends on their exact language, the beneficiary forms on file and the law of the state involved, all questions for an estate planning attorney. The test illustrates the out-of-sequence analysis FIN-440 grades and is not legal, tax or financial advice.