Estate

Question 1

What would be the max amount which would have been transferred to a credit shelter trust upon death?

Answer 1

Credit shelter tryst = By-pass Trust

This should be funded with the full available exclusion amount of 11.7M if possible.

Question 2

Which of the following characteristics are found in both bequests and in gifts?

Unlimited marital deduction.
The use of the unified credit.
Unlimited charitable deduction.
The annual exclusion.

Answer 2

All but the annual exclusion applies only to lifetime gifts and not to bequests.

FIND OUT THE DIFFERENCE

Question 3

What is a 303 redemption?

Answer 3

Looking to add more to this but essentially it’s a planning strategy for someone in a pinch that can’t use the FLP to transfer part of the business to the family.

Must be at least 35% of the estate to use, and the stock must be closely held (can either be common or preferred).

Redemption amounts are determined by the payment of death taxes and estate admin taxes/costs

Earnings and profits of the account must be positive to use

Question 4

Which of the following are deducted from a decedent’s gross estate:

A whole life policy that he owned on his mother.
A mortgage on community property.
A credit card balance on a sole & separate account.
Income taxes paid earlier in the year.
Interest owed on the credit card balance.

Answer 4

Debts and obligations of the decedent are deductible from the gross estate. Only 1/2 the mortgage on community property is deductible.

So credit card and the int owed

Question 5

What is a revisionary interest?

Answer 5

At some point the gift will revert back to the original owner

Question 6

Terminable Interest

Answer 6

The right of ownership terminates at the passing of the owner