Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CFP > Estate > Flashcards

Estate Flashcards

You may prefer our related Brainscape-certified flashcards:
CFP® flashcards
1
Q

Quasi property

A

Property that would have been community property except that it was acquired while the couple was living in a non community property state

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Who can own community property

A

Only spouses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Can creditors sever tenancy by the entirety?

A

Yes, but only joint creditors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What techniques can be used to avoid ancillary probate

A

JTWROS
Revocable living trust
Tenancy by the entirety

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What kind of property does not go through probate?

A

JTWROS
TBE
revocable trust

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

When are survivorship annuities included in gross estate

A

Annuities full value is included if survivor has right to a lump sum

Present value of future payments is included if the survivor receives periodic payments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a life estate

A

Gives the owner the absolute right to possess, enjoy, or derive income from the property for life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Are life estates included in a gross estate

A

No, only a retained life estate is included

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Why is our transfer tax system considered cumulative

A

The calculation is based on cumulative transfers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

When will a general power subject the holder to gift tax liability

A

When there is a lapse

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is form 709

A

Gift tax form

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How do you calculate a taxable gift?

A

FMV-annual exclusion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are deductible/exempt gifts

A 
Qualified payment to an education institution for tuition
Qualified payment for medical care
Gift to spouse
Gift to qualified charity
Gift to political organization
Gift to president of USA
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

In tax year 2022, what is the max amount you can gift someone and not pay federal gift taxes?

A

12,076,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

In an inter vivos trust, who has legal title and who had equitable title?

A

Trustee holds legal title

Beneficiaries hold equitable title

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Simple trust keys

A

Income is distributed

Income taxed to beneficiary

No distribution of corpus

No charitable gifts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Complex trust keys

A

Income must or may be accumulated

Income accumulated is taxed to trust

Income distributed is taxed to beneficiaries

Corpus may be distributed until trust terminates

May make charitable gifts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is Distributable Net Income (DNI)

A

The accounting rule that limits the amount that trust (or estate) beneficiaries must report as gross income for income tax purposes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What are the purposes of DNI

A

Provide trust with deduction to beneficiaries

Limit the portion of distribution that is taxable

Ensure character of distributions remain the same

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

To be taxed as a separate entity a trust must meet what requirements?

A

Irrevocable

Grantor has not retained control

Income is accumulated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is a spendthrift provision

A

Prohibits the transfer of the beneficiaries interest and stipulates that it is not subject to the claims of the beneficiaries creditors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What are the other names for a bypass trust

A 
Nonmarital trust
B trust
Nonmarital b trust
Family trust
Unified credit trust
Applicable credit amount trust
Applicable credit amount shelter trust
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Other names for a marital trust

A

Power of appointment trust
Spousal trust
Marital “A” trust

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Other names for QTIP trust

A

Qualified terminal interest trust
C trust
Current income interest trust

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

QTIP KEYS

A

QTIP is LAME

Lifetime income interest for spouse
Annual payments to the spouse
Mandatory payments to the spouse
Exclusively for the spouse

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What is an estate trust

A

Marital trust that does not provide surviving spouse with income stream

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What kind of property can be held in a UTMA that cannot be included in a UGMA?

A 
Real estate
Partnership interests
Patents
Royalty interests
Intellectual property
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Sprinkling/spray provision

A

The power to direct/distribute INCOME at the DISCRETION of the trustee

Can be a provision in an estate or trust

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What is a dynasty trust

A

B trust that benefits multiple future generations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Uniform statutory rule

A

Trust can violate the rule against perpetuities by stating the number of years

31
Q

Is an irrevocable trust a gift of present interest

A

No, must have crummey provisions

32
Q

Can Simple trusts be irrevocable

A

Yes

33
Q

Required minimum gifting amount under a CLUT

A

None

34
Q

Who controls and funds a donor advised fund

A

Controlled by sponsoring organization

Funded by individual donor

35
Q

What is the typical use of a CLAT for?

A

Large donation

36
Q

Is there a required minimum distribution for a CLUT?

A

No

37
Q

What is the catch up provision for SIMPLE plans?

A

$3000

38
Q

Other names for a 403B

A

Tax deferred annuity (TDA)

Tax sheltered annuity (TSA)

39
Q

Is premium paying an incident of ownership?

A

No!!!

40
Q

What is a reverse gift

A

Wealthier spouse makes a gift of a low basis asset to the dying spouse

41
Q

For a reverse gift to work, how long must the I’ll spouse live after gift

A

At least a year

42
Q

Is being the insured an incident of ownership

A

No!!

43
Q

Can an s corp issue preferred stock

A

No

44
Q

When is a child no longer eligible for kiddie tax

A

The year in which they turn 24

45
Q

What are the duties of fiduciaries

A

Loyalty to beneficiaries
Duty to not self deal
Duty to preserve property and make it productive
Duty to be impartial toward all beneficiaries

46
Q

Example of self dealing

A

Trustee sells trusts assets to himself below FMV

47
Q

Taxable distribution

A

Trust has beneficiaries in 2 or more generations and the trustee makes a distribution to a skip person

48
Q

Taxable termination

A

Termination of a non skip persons interest in income or principal of a trust with the rest is the skip person becoming the only remaining beneficiary

49
Q

What qualifies as closely held?

A

Sole proprietorship
Partnership
Corporation

50
Q

Are taxable gifts included in a gross estate

A

NO-only gift taxes paid

51
Q

If on the exam the question says there is a QTIP trust that they want to go to their GRANDCHILDREN what is the answer?

A

Reverse QTIP

52
Q

If alternative valuation date was elected, can assets be valued at something other than the 6 month valuation?

A

Yes-wasting assets may not be valued at AVD

53
Q

Can contingent beneficiaries be listed for a disclaimer?

A
  • can have contingent beneficiaries if wanting to disclaim property
  • property with contingent beneficiaries cannot be listed for a disclaimer trust to work
54
Q

Causa Mortis

A

Gift conditional upon the donors dying

55
Q

What is added to the taxable estate to determine the tentative tax base

A

Taxable gifts

56
Q

Co-ownership discount

A

Is for real estate ownership with another person

57
Q

Key person discount

A

May be allowed for a business that lost a key employee who was responsible for its good will, administrative or management skills

58
Q

When is a reversionary interest tainted for income tax purposes?

A

When the interest exceeds 5% of the trust value at the time of creation

59
Q

Do TIC assets get a set up in basis?

A

Only a 1/2 step up

*this can be troublesome with spouses

60
Q

What operates under the conduit principle?

A

Simple trusts NOT complex trusts

Certain business entities (ex:LLC, sole proprietorship)

61
Q

Is a 2503C trust included in the trustees estate?

A

Yes!

*bc of this grandparents should not be trustees

62
Q

The RULE AGAINST PERPETUITIES allows a trust to last as long as what?

A

Lives of being plus 21 years and 9 months

63
Q

Examples of Income in Respect to the Decedent

A

Insurance renewal commissions
Monthly IRA payments
Taxable distributions from qualified plan
Partnership income of deceased partner
Gain still to be recognized on installment sale
S corp income of deceased shareholder
Business accounts receivable (not booked)
Dividends declared but not received

64
Q

Following the death of a grantor, what would reduce GSTT?

A

Reverse QTIP

*key here is the reverse QTIP can be used AFTER death

65
Q

What kind of property is land for a charitable contribution

A

Always considered use related

66
Q

Besides a qualified plan what else could a QDRO pertain to?

A

Child support
Alimony payments
Marital property rights

67
Q

What happens if you have a QPRT and die during the retained interest term?

A

It leaves the grantors estate with no greater tax liability than had the QPRT not been established

68
Q

In a taxable termination, who is liable for the GSTT due?

A

Trustee from the trust property

69
Q

What is an IRS section 2518

A

Disclaimer or disclaimer trust

70
Q

Are not-for-profits public or private charities?

A

Neither. They would need to obtain IRS approval to receive tax deductible contributions

71
Q

When can you file as a qualifying widower?

A

The year after your spouse died

*in the year the spouse passes: can only file as MFJ and MFS

72
Q

What must you have if your are going to file as a qualifying widower

A

Must meet at least 1 of 4 tests:

  • maintains a home
  • has a dependent child
  • filed a joint return the prior year
  • did not remarry
73
Q

Can you file head of household the year your spouse dies?

A

Only if there are children actually living in the home

CFP (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions