Which of the following are included in the gross estate:
A) Proceeds from a life insurance policy owned by the decedent insured that was assigned to an ILIT two years before death of the insured.
B) A secular trust where the only income beneficiary was th
D) Gift taxes paid two years prior to the decedent's date of death for gifts made four years earlier.
Lisa made the following transfers during 2019:
� $17,000 to her grandson's law school for his tuition.
� $1,000 to her neighbor to help him pay a hospital bill.
� A transfer of property valued at $100,000 to a GRAT. Lisa retained an annuity valued at $40,
B) $60,000
Brody and Tanya recently sold some land they owned for $200,000. They received the land five years ago as a wedding gift from Brody's Aunt Jeanette. Aunt Jeanette purchased the land many years ago when the property was worth $20,000. At the date of the gi
D) $148,000
Which one of the following transfers made this year by 85-year old Jennifer is not sooner or later subject to the Generation Skipping Transfer Tax?
A) A gift of a remainder interest in a trust just established which is paying an income interest to Jennife
A) A gift of a remainder interest in a trust just established which is paying an income interest to Jennifer. The remainderman is a grandson whose parents died in an auto accident earlier this year before the inception of the trust.
Colin would like to use his recent inheritance of $500,000 to establish a charitable remainder trust. Colin would like to have the flexibility to make additional contributions to the charitable remainder trust in the future. Which of the following would y
D) A Charitable Remainder Unitrust
whch of the following is an advantage of a revocable living trust?
A) Reduction in federal estate taxes.
B) Avoidance of probate.
C) Removal of asset appreciation from the grantor's gross estate.
D) Distribution of the trust assets according to the terms
B) Avoidance of probate.
Mary's husband, Patrick, died two years ago. Patrick's will included the following three testamentary trusts: a trust for the benefit of Mary's children, but giving Mary a general power of appointment over the trust assets for the remainder of her life (G
A) 1 only.
Hazel, a widow, died. She had made no previous lifetime taxable gifts and she died with a gross estate of $11,400,000, consisting solely of a diversified portfolio of publicly traded, income-producing stocks. Her debts were $75,000 and estate administrati
B) Deduct estate administrative expenses on the estate's fiduciary income tax return.
Ben is interested in using a Qualified Personal Residence Trust (QPRT) as part of his estate plan. Which of the following are false regarding QPRTs?
A) At the end of the trust term, the house will revert back to the grantor.
B) With a QPRT, the grantor mu
A) At the end of the trust term, the house will revert back to the grantor.
Robbie transferred $100,000 to an irrevocable trust for the benefit of his minor child, Dominic. The transfer was eligible for the annual exclusion. The trust requires the trustee to distribute trust income from the trust to Dominic annually. The trust do
A) 2503(b) Trust.
the best life insurance policy for the payment of federal estate taxes for a 55-year-old couple with illiquid assets is:
A) An individual whole-life policy on each spouse on a cross-ownership basis.
B) A joint first-to-die life insurance policy owned join
D) A joint and last-to-die life insurance policy owned by an irrevocable life insurance trust.
Use of an Irrevocable Life Insurance Trust can accomplish which of the following?
1. Create a vehicle to avoid Generation Skipping Transfer Tax.
2. Make proceeds available to the surviving spouse.
3. Ensure that proceeds will be included in the probate an
B) 2, 3, and 4.
In which of the following situations would the use of a marital deduction be allowed?
A) Tom dies and is survived by his wife, Tina, who is not a U.S. citizen.
B) Regina dies and is survived by her husband, Raul, who becomes a U.S. citizen two months afte
B) Regina dies and is survived by her husband, Raul, who becomes a U.S. citizen two months after Regina's death.
of the following, which is not a benefit of the unlimited marital deduction?
A) The use of the unlimited marital deduction can shelter future appreciation of an asset from estate taxes at the death of the second-to-die spouse.
B) The estate tax on propert
A) The use of the unlimited marital deduction can shelter future appreciation of an asset from estate taxes at the death of the second-to-die spouse.
Nate owns the following property:
� A personal residence titled fee simple valued at $500,000.
� A $500,000 life insurance policy on his own life. The named beneficiary is Nate's brother Jaime.
� A car valued at $15,000 titled JTRWROS with Nate's mother.
A) $500,000.
Assuming Kenny died today, calculate his gross estate.
A) $12,290,000
B) $12,500,000
C) $13,731,840
D) $13,897,440
C) $13,731,840
Assuming Kenny died today, calculate his probate estate.
A) $7,140,000
B) $7,260,000
C) $9,940,000
D) $11,731,840
D) $11,731,840
Assuming Kenny died today, calculate the Marital Deduction available for estate transfers to Melissa.
A) $0
B) $6,000,000
C) $7,000,000
D) $7,140,000
A) $0
Assume Kenny died today, and Kati is appointed executor. Unfortunately, Kati forgot to file an Estate Tax Return (Form 706) and pay the estate tax due of $580,896 until 68 days after the return's due date. How much is the failure-to-file penalty (reduced
C) $87,134.40
Assume Melissa and Kenny had their baby today and named him Kole. Which of the following individuals is a skip person in relation to Kenny?
1. Riley
2. Kole
3. Melissa
A) 1 only
B) 1 and 3
C) 2 and 3
D) 1, 2, and 3
B) 1 and 3
Regarding gifts made by Kenny, what is the total annual exclusion available for the Generation Skipping Transfers made in the current year?
A) $15,000
B) $18,000
C) $27,000
D) $32,000
B) $18,000
Which of the following is true with regard to Kenny's transfer to the trust benefiting the grandchildren?
A) When distributions are made from the trust, the distributions will be taxable distributions.
B) The transfer is a direct skip.
C) When the trust e
B) The transfer is a direct skip.
Kenny is thinking about transferring his Investment Portfolio and the Bungalow to a dynasty trust for the benefit of his natural heirs. Which of the following statements is correct?
A) Kenny cannot transfer the investment portfolio without Kati and Karli'
D) Because of the blended family, generational subtrusts may be appropriate
Assume for this question only, Kole was born today and Kenny was so excited after the delivery that he had a heart attack and died. Who would receive his probate assets under the will?
A) Liz
B) Melissa
C) Kati, Karli and Kole
D) It is unclear who would i
C) Kati, Karli and Kole
Assume, for this question only, that Kenny and Melissa were married today. They went straight to Kenny's lawyer's office to execute new wills. On the way home from executing a valid will leaving all assets to Melissa, Kenny and Melissa were in a serious c
B) No, this election would not be available
Assume, for this question only, that Kenny and Melissa were married today. They went straight to Kenny's lawyer's office to execute new wills. On the way home from executing a valid will leaving all assets to Melissa, Kenny and Melissa were in a serious c
A) Yes, this election would be available.
Assume, for this question only, that Kenny and Melissa were married today. They went straight to Kenny's lawyer's office to execute new wills. On the way home from executing a valid will leaving all assets to Melissa, Kenny and Melissa were in a serious c
B) No, this election would not be available
Assume, for this question only, that Kenny and Melissa were married today. They went straight to Kenny's lawyer's office to execute new wills. On the way home from executing a valid will leaving all assets to Melissa, Kenny and Melissa were in a serious c
B) No, this election would not be available.
Kenny is considering transferring his life insurance policy to an ILIT. Which of the following statements is true?
A) If Kenny included a clause that said, "Kenny can change the beneficiary of the trust at any time to any person other than himself" then t
A) If Kenny included a clause that said, "Kenny can change the beneficiary of the trust at any time to any person other than himself" then the assets would be included in Kenny's gross estate when he died.
Carrie would like to spend the few years she has left enjoying her life. She would like to use her life insurance policy to fund the remainder of her life. Which of the following statements is correct?
A) If Carrie surrenders her policy for accelerated de
B) Carrie could exchange the policy in a 1035 exchange for an annuity without being subject to income tax on the transfer.
If Kenny decided to sell the vacation property today for the Fair Market Value, what would his gain or loss be?
A) $40,000
B) $70,000
C) $75,300
D) $80,200
B) $70,000
Assume for this question only that Melissa has a healthy baby boy and they name him Kole. The stress of the new baby deteriorates their relationship and Kenny and Melissa break up 6 months later. Kenny is ordered by the court to pay $2,000 a month in chil
A) Gift: $0 Deductible: $0
Assume Kenny had charitable inclinations and decided he wanted to bequeath something to charity. Which of the following assets would be the most advantageous to leave to the charity considering the tax effects on other non charitable beneficiaries?
A) $60
B) $60,000 in qualified plan assets
Assume for this question only that Kenny and Melissa had the baby today. When Kenny returned home, Kenny's neighbor, Stue Farm, came over. Stue is the local insurance salesman and he immediately convinced Kenny he needed to buy a new life insurance policy
A) The interpolated terminal reserve plus any unearned premium will be included in Kenny's gross estate.
Assume Kenny and Melissa had Kole today and Kenny wanted to create a trust for Kole's future benefit. Kenny would like to create a trust that allows him to make use of the annual exclusion. He wants the trust to accumulate income until Kole reaches age 21
D) A section 2503(c) device
Kenny is considering running for governor but is concerned that managing the Bungalow and his portfolio will cause a conflict of interest. Which of the following trusts would be an appropriate device to mitigate against the conflict of interest?
A) A Tott
C) A blind trust
Kenny is considering changing his will today. He wants the new will to leave everything to Melissa. Which of the following statements is true.
A) A no-contest clause could be added to discourage Kati and Karli from contesting the will.
B) A simultaneous d
C) A guardianship clause can be used to identify Kenny's preferred legal guardian of Kole.
At Melissa's urging, Kenny contributed $25,000 in cash to a foreign charitable organization. At the time of the contribution, the organization told Kenny that his contribution was tax deductible for income tax purposes. Ignoring any income limitations, ho
A) $0
Kenny is confused about the rules relating to charitable contributions. He has asked you, his advisor, for more clarification regarding the issues to consider when making a contribution. Of the following, which is not an issue when considering whether to
D) The capital gains rate in effect at the time of the transfer.
Kenny is considering transferring the vacation property to a QPRT next year naming his two daughters as the remainder beneficiaries. The value of his retained interest is valued at $48,000. What would Kenny's total taxable gift be for this transfer?
A) $3
C) $52,000
Kenny is considering creating a testamentary trust. Which of the following is not a feature of a testamentary trust?
A) Creation under a last will and testament
B) Shifts an income tax burden to a lower-bracket taxpayer
C) Results in the inclusion of asse
B) Shifts an income tax burden to a lower-bracket taxpayer
Kati has decided that any inheritance she receives from her father will be used to establish a charitable remainder trust. Kati would like to have the flexibility to make additional contributions to the charitable remainder trust in the future. Which of t
B) CRUT
This year, Karli donated $30,000 in cash and provided services to the Red Cross valued at $10,000. Karli's AGI for this year is $40,000. What is Karli's charitable contribution deduction for the year assuming both are qualified charities?
A) $15,000
B) $2
D) $40,000
Kenny is concerned about protecting his assets in the event he decides to marry Melissa. He has asked you for more information on QTIP trusts. Which of the following accurately describes a QTIP Trust?
A) A QTIP is sometimes called a "B" or "Q" Trust.
B) T
C) The trust assets will be included in the gross estate of the surviving spouse.
Which of the following is not a requirement of the unlimited marital deduction?
A) In order to claim a marital deduction on the 706, the decedent must have been married as of the date of his death.
B) The surviving spouse must receive property through the
D) The gross value of qualifying property left to the surviving spouse is included in the marital deduction
Assume Carrie decided to transfer her life insurance policy to an Irrevocable Life Insurance Trust (ILIT) today for the benefit of Kati and Karli. She is concerned that the girls may not receive their fair share of Kenny's estate now that Kole and Melissa
B) $50,000
Kenny is considering selling the Bungalow so he can spend more time with Melissa. Allen, a customer of the Bungalow, has offered to buy the business for a price Kenny considers reasonable, but Allen does not have all of the funds necessary to pay for the
A) Grantor Retained Annuity Trust
Which of the following is a principal reason for establishing a revocable living trust?
A) Reducing the grantor's gross estate
B) Temporal Discounts
C) Probate Avoidance
D) Avoidance of the Rule Against Perpetuities
C) Probate Avoidance
Of the following statements, which is false?
A) The availability of the unlimited marital deduction merely postpones the potential estate tax due.
B) Property that is not included in the decedent's gross estate cannot qualify for the unlimited marital ded
C) The death benefit of a life insurance policy included in a decedent's gross estate is not eligible for the unlimited marital deduction, even if the surviving spouse is the listed beneficiary and receives the proceeds.
Assume Kenny dies and the estate does not have sufficient cash to pay the required taxes or expenses. Of the following statements, which is not true regarding selling an estate's assets to generate cash?
A) The estate may have income tax consequences.
B)
C) Any losses on the sale of the assets are deductible as losses on the estate tax return (Form 706)