Estate Planning Flashcards
Which of the following trusts can permit the trustee to invade the principal for health, education, maintenance, and support (HEMS) for all beneficiaries presuming each trust is structured the same way with the grantor the decedent, the spouse of the grantor the income beneficiary, and the children of the grantor the remainder beneficiaries?
- An ILIT.
- A bypass Trust.
- A GPOA (general power of appointment) Trust.
- 1 and 2 are the nonmarital trusts and therefore the trustee can have the power to invade for all beneficiaries.
- The GPOA trust is a marital trust and the trustee would be redirected to invade for the spouse only or the trust would not qualify for the marital deduction.
Which of the following is a deduction from the gross estate used to calculate the adjusted gross estate?
A. Last medical costs.
B. The gift tax paid on gifts made within three years of death.
C. The unlimited marital deduction.
D. The unlimited charitable deduction.
A. Last medical costs.
Deferred comp arrangement contributions are subject to _____ taxes.
FICA.
What’s the main benefit of a reverse or (reversionary) gift?
The gift is given with the intention that the donor receive it back with a step-up in basis.
A _____ substitute avoids public scrutiny, testamentary control, and cannot be overridden by bequests.
An example might be a contractual agreement as a life insurance beneficiary.
Will substitute.
A _____ will is also referred to as a sweetheart will where both spouses leave all assets to each other.
Mutual Will.
The unrestricted ability to name the ultimate beneficiaries of income and corpus of a trust is a _____ _____ __ _____.
General Power of Appointment.
Only the ____ ___ transfers property at death by contract.
ROTH IRA.
Only the _____ Trust permits income accumulation.
Estate Trust.
A _____ Trust permits income sharing.
Bypass Trust.
