Estate

Question 1

Bypass Trust: Surviving Spouse’s Estate (4 facts)

Answer 1

Property “by-passes” inclusion in the surviving spouse’s estate.
The spouse can be given a limited power of appointment with an ascertainable standard (HEMS) to receive distributions from trust income and corpus.
The spouse can exercise a limited power of appointment to distribute assets to the beneficiaries.
The spouse can be given a 5 x 5 power of appointment over the trust corpus.

Question 2

Will substitutes allow assets to avoid the probate process. The three types of will substitutes are:

Answer 2

1. Trusts (Funded revocable trusts, irrevocable trusts, and property in a trust).
2. Operation of Law (JTWROS or Tenancy by the Entirety, joint banking accounts, POD/TOD accounts, life estate).
3. Contract (Named beneficiaries on life insurance, pension plans, IRAs, annuities)

Question 3

The federal estate tax is calculated in five steps:

Answer 3

Determining the value of the gross estate.
Arriving at the adjusted gross estate.
Determining the taxable estate.
Calculating the federal estate tax payable before credits.
Applying the allowable credits to arrive at the net federal estate tax.

Question 4

Certain depreciable assets must be valued on the date of death, even if an AVD election is made. Name 3

Answer 4

Copyrights, Patents, & Intellectual Property

Question 5

Estate Tax Formula

Answer 5

Gross Estate
Minus: Expenses, debts, taxes, losses
Adjusted Gross Estate
Minus: Marital deduction
Charitable deduction
Taxable Estate