Estate Flashcards
Defective trust for INCOME tax purposes
-trust income used to pay LI premiums
-reversionary interest exceeds 5% of trust at time of creation
-power to control beneficial enjoyment
Defective trust for ESTATE purposes
-revisonary interest exceeds 5% at time of death
-right to income/property
Simple trusts
Income is distributed
Income taxed to benie
No charitable gifts
Corpus distributed at termination
2503b QTIP QDT dynasty
Complex trust
Income may or must be accumulated
Taxed to trust
Income distributed is taxed to that benie
Charitable gifts permitted
2503c
Crummy trust
Simple or complex
Lesser of 18k or deposit into trust
Typically funds ILIT
Ascertainable standard
HEMS
Health, education maintained support
No estate or gift tax
5 or 5
Greater of 5k or 5%
After crummy
If you have 6%, the whole trust is in your estate-don’t want that
Bypass trust
B trust
Fill it first
Uses 13610000 exemption
First to die has power
Stream of income to spouse and or others
5x5 and hems
1st to die has other benies after wife dies
Qtip trust
C trust
Qualified terminal interest property
First spouse to die controls
Current income for lfie
Material deduction
In gross estate of surviving
LAME
lifetime income for spouse
Annual payments to spouse
Mandatory payments to spouse
Exclusively for spouse
Hems 5x5
1st to die has control of benjes
Marital trust
A trust
Martial deduction
All the wife’s
No postmortem control
Reverse QTIP
to grandchildren, not children
GSTT exemption isn’t lost
Qualified domestic trust
QDT QDOT
100k indexed to 185k this year
CRAT
income to donor until death
At death reminder paid to charity
NO additions
Fixed payment at least 5%
10% ending value
Payable to any charity
CRUT
Income until donors death
No gift tax
Remainder to charity after death
Additions allowed
Variable payment dependent on reevaluation each year at least 5%
CLAT/CLUT
income to charity
Income/estate tax deduction
Remainder to non charitable benie
Private foundations
30% income tax deduction
Payable to charity or person
Indefinite time period
5% distribution rule
Grant study fellowship price award talent
Rich bitches
Donor advisers funds
Poor persons private foundation
ILIT
wealth replacement trust
Installment sale
Sale of property at FMV
PV of remaining payments are included in owners estate
Property is secured
Gain is cap gain
DONT USE IF Depreciated
Self canceling installment note
SCIN
No value included in estate
Gain can be cap gain
Assets can be depreciated
Interest can be deducted
Higher payout than installment
Private annuity
Not used much
No value included in estate
Taxation to seller-all gain recognized in year it’s sold
GRAT/GRUT
Irrevocable trust that allow grantor to make gifts of property
Corpus is distributed to remainder person
Value of gift id discounted
Owner must outlive term or asset is brought back into estate
Best asset, likely to appreciate
GRIT
No family members
Gifting shares of partnership/S corp
Family member received conduit income (watch for kiddie tax)
Biz must be capital sensitive, NOT SERVICE
