Which term means a transaction in which there is no relationship between the parties?

Which term means a transaction in which there is no relationship between the parties?

• A. Incidents of ownership
• B. Arm's-length transaction
• C. Probate estate
• D. Dower

Answer: (B)

An arm's-length transaction describes a deal between independent, unrelated parties negotiating freely, so the terms and price reflect true market value without influence from personal relationships or fiduciary duties. This concept matters in estate planning and probate because it helps ensure transfers aren’t biased by family ties or other relationships, which could hide gifts or self-dealing. The other terms refer to different ideas: incidents of ownership are the rights that come with owning property, probate estate is the assets that go through probate, and dower is a spouse’s statutory right to a portion of the estate. Therefore, the term that means a transaction with no relationship between the parties is arm's-length.

An arm's-length transaction describes a deal between independent, unrelated parties negotiating freely, so the terms and price reflect true market value without influence from personal relationships or fiduciary duties. This concept matters in estate planning and probate because it helps ensure transfers aren’t biased by family ties or other relationships, which could hide gifts or self-dealing. The other terms refer to different ideas: incidents of ownership are the rights that come with owning property, probate estate is the assets that go through probate, and dower is a spouse’s statutory right to a portion of the estate. Therefore, the term that means a transaction with no relationship between the parties is arm's-length.